Outsourcing
I was in Bangalore earlier this February, testing the job market. Within just two weeks of posting my resume – phones were ringing off the hook with calls from recruiters for Amazon, Google, HP, Nokia, GE, Microsoft, Goldman Sachs, Mahindra, Accenture, Convergent, Honeywell, Keane, Intuit,… I can’t imagine that many calls after posting my resume in the USA (even after a month; let alone from name brand companies). Shows where all the jobs have gone. They were all very highly paid positions as well.
Why are the jobs going to India?
- The higher standard of education. To illustrate: the calculus that is taught in final year of undergraduate in the USA, is done by the average Indian kid in 10th grade. The Indian education system is by no means perfect, but one thing it does, is that it builds a solid amount of mental stamina, diligence, and discipline. Thus, with very little training or ramp-up time people are full swing into it, with a very high productivity rate.
- Indians have a strong command of the English language compared with most other non-native English speaking countries.
- India is second to the USA in terms of the amount of intellectual capital, churning out sheer numbers of electrical and computer engineers, doctors, scientists, journalists, and business graduates each year. If the number of patents is any measure: of the 5,401 patents in the year 2004: 2,375 were from Asia, out of which over 1,000 were from India alone, and 1,524 from Eastern Europe (speaking of which Eastern Europe is another rising star that is starving to take over American jobs).
- Finally, add to that the much lower cost of labor and cost of living.
Who moved my cheese?
For those who complain about their jobs being taken, my philosophy is that, it’s not that somebody’s taken your jobs – it’s just that the jobs have moved elsewhere (India, China). It’s like in that book “Who moved my cheese”. The cheese has moved – go where the cheese is. Go to India, China, other South-Asian countries. And hot on the heals is Eastern European and South American countries. For decades people from different parts of the globe have been coming to the USA. Globalization and the internet has made the world flat, and people don’t find the need to migrate to the USA. People will tend to remain in their native countries. This time, it’s time for Americans to follow the cheese and migrate to other countries. It may even help everyone in the world to understand each other better as well. Globalization is no longer a one-way street, but a two-way street, as it should be.
I’d like to add one more point to that: moving outside the USA to where the jobs have gone or blaming out-sourcing is not the solution. The USA needs to a) improve the educational standards dramatically, b) needs more peer pressure – which can start by removing all the distractions kids in the USA face. Compared with any country the amount of distractions kids face here is beyond pale. Ranging from video games, internet, dating, gossip, television, cell phone culture, pop-star role models, etc., and c) needs to cultivate a culture which has more respect for teachers, the learned, and the wise (than for rock stars, movie stars, and sports stars). A respect for knowledge is where aspiration to learn comes from. My vote will go to anyone who promises that rather than blaming outsourcing. Outsourcing will continue to happen as long as the source of the problem is not addressed.
“…if you want liberalization, you have to appreciate that liberalization is a two-way traffic. It cannot be a one-way traffic. If you want access to markets, you have to give us access to your markets.”
- Azim Premji (founder of Wipro, and India’s richest person), see video Charlie Rose Show interview with Azim Premji and Nandan Nilekani (founder of Infosys).
See Also:
- “Several decades ago, my parents told us to eat [not waste food] because the children in China and India are starving. Today, I tell my children to learn because the children in China and India are starving for their jobs.”
- Thomas Friedman (author of NYT bestseller, “The World is Flat”), see video: The other side of outsourcing - European workers fill call centers in India.