MUMBAI: In 2004, at the height of the American presidential campaign dominated among other things by offshoring and a jobless recovery, HCL’s Vineet Nayar set off a firestorm with a comment that American graduates were not employable.As trade unions seethed and politicians fumed, two men looked at the reaction the comments had caused and wondered if there was a business opportunity. Since offshoring was considered a purely Indian phenomenon and sensing a backlash to the process in the years ahead, Debashish Sinha and Neeraj Gupta two IT industry executives in the US began quietly working on an alternative that would appeal to many companies and the political establishment.It took them five years to come up with a concrete plan and get investor funding. System In Motion (SIM), a Michigan-based start up, launched few months ago plans to challenge the traditional offshore outsourcing market leaders by delivering low cost services from locations such as Ann Arbor.With the Indian outsourcing industry still being viewed by some in the US as one of the reasons for the country’s ‘jobless recovery’ , this start up is promising to create more than 1,100 jobs over next five years in Michigan, home to Ford, General Motors and Chrysler-the Detroit’s big three.“With nearly 30% unemployment rate in the region, for every Java programmer advertisement we put, there are around 100 applicants, with many of them having a decade’s experience,” says Sinha. The company is backed by several angel investors including Preetish Nijhawan, the Akamai founder, has Michael G. Parks, the former CIO of Virgin Mobile and Wells Fargo on the board too.“I would agree that there will be more start-ups providing onshore services but it will remain a niche business and represents the ongoing evolution of outsourcing rather than indictment against offshore outsourcing. The bulk of new jobs in the US have long been created by small businesses and this is another example of that,” said Stan Lepeak, managing director of Equa Terra’s global research pravctice.The Michigan government has already assured tax rebates worth around $7.4 million linked to the job creation. In her ‘state of the state address’ delivered last week, Michigan governor Jennifer M. Granholm praised System In Motion for creating some 1,900 jobs in the Pittsfield township.Local outsourcing to low cost American locations is not entirely a new trend. Smaller US firms such as Rural America Onshore Sourcing and Xpanxion have been attempting to build a sustainable rural outsourcing model in the US at a time when offshore locations such as India are facing a backlash and unemployment rates have touched an all-time high.Xpanxion, an Atlanta-headquartered software firm, which shifted its software testing work from Pune to Nebraska a few years ago is among a handful of such firms seeking to create a more comfortable and cost-effective alternative to offshore outsourcing.NCR, Coca Cola and Goldleaf Financial Solutions are among customers outsourcing software projects to Xpanxion. Cost advantages of delivering a project from a location such as Corsicana, or Kearney (Nebraska) could be almost 20-40% cheaper when compared to Los Angeles.“In some ways Vineet’s comments (and the local reaction) were among trigger. The market also is beginning to see offshoring as a pure Indian phenomenon, but we launched System In Motion to leverage the American workforce,” says Sinha.