Onshoring Software Development – Good for Budgets, Good for the Economy

As the tech industry continues to boom, the demand for developers, IT staff and tech professionals isn’t slowing down any time soon. For decades, businesses tried to lower costs by offshoring their technology needs to other countries, however, they soon learned the unique challenges of offshoring such as time zone difference, language barriers, and cultural misunderstandings. These seemingly minor annoyances can cause some major problems: project delays, quality issues, headaches, and higher costs.

As businesses’ needs transitioned from lowest cost provider to a focus on quality and the need to develop software fast and “right the first time” (and still within budget!) – more and more businesses chose not to offshore and instead look for a better alternative.

Sparq understood these challenges and helped introduce a new way to outsource development that not only helped companies achieve their IT goals, but also helped local economies capitalize on and retain their best tech talent.

Onshoring Software Development Work to Help Businesses & Local Economies

Founded with the goal of connecting companies with talented, qualified IT professionals, Sparq has brought thousands of jobs back to the US in midsize cities across the country as part of its domestic sourcing model.

Not only does Sparq’s model bring tech jobs back to the United States, but it also does so in a way that supports small to mid-size local economies and creates opportunities for the tech professionals who call these places home.

Instead of building development centers in large metropolitan areas like Silicon Valley and Boston, Sparq establishes centers in smaller pockets across the country such as Alabama, Arkansas, and New Mexico, where the cost of living is less expensive and there’s a wealth of tech talent from universities and other businesses in the area. The opportunity to work at a Google-esque development center and with Fortune 1000 companies is incredibly enticing for tech professionals who have the skills to work in Silicon Valley or NYC, but prefer to live in a smaller area for a variety of reasons, including economic, family, or even just personal preference.

As a result, companies that work with Sparq benefit from high-quality services at affordable prices, and thousands of jobs are created that can have an enormously positive ripple effect on local economies. It’s a win-win-win for tech professionals, companies, and the cities our development centers call home.

Measuring the Economic Impact of Sparq on Communities

To figure out Sparq’s true economic impact, we reached out to the James M. Hull College of Business at Augusta University in Georgia. The team measured our economic impact by using an input-output model in IMPLAN software.

This model allowed Augusta University to examine the economic linkages within the economy that exist between businesses and other businesses, and businesses and the final consumers. In short, we wanted to know how much our development centers helped boost the economies where they’re located.

As a result, the team was able to provide a comprehensive assessment of our local economic impact, which considers the number of jobs created and sustained, as well as the total output, in dollars, that is contributed to the local economy.

The Results: Sparq’s Positive Economic Impact

The impact of Sparq on its communities is far more than just the number of jobs created. With more jobs in local communities, people have more disposable income to spend, which trickles into the economy and supports local businesses. When it comes to measuring Sparq’s total economic impact in just one community, the results are astounding.

The study found that Sparq had a total economic impact multiplier of 3:1. In other words, for every dollar put into the community in the form of payroll or capital expansion, that dollar gets multiplied by 3 times.

If we expand this economic impact to reflect each of the six development centers across the U.S., Sparq is responsible for contributing $100 million-$150 million annually to the surrounding local communities. Typically, Sparq agrees to ten year commitments for job creation so extrapolating today’s level of investment in these communities across the ten year commitment means we have a $1 billion-$1.5 billion impact on our selected communities.

Our Commitment to Creating High Quality Jobs in the United States

Sparq is taking huge steps to support the American dream. While other conglomerates have favored larger metro areas, Sparq has fostered innovation and growth in small cities across the United States. And we’re incredibly proud of the impact we’ve made: by stimulating job growth in America, we’ve helped local economies grow by more than $100 million.