Outsourcing

Outsourcing from the Indian side

In North America, "outsourcing" has recently become a code word for IT jobs fleeing to low-cost countries like India. But it is instructive to look at outsourcing from an Indian point of view.

India is a large country, with several natural resources, including the worlds fourth-largest reserves of coal. But surely among India's strongest resources is its 1 billion people. While education is not evenly spread, there is a large segment of society that is well educated and fluent in English for business and cross-community interactions. It only makes sense to put that asset to work

So India has become "backoffice to the world". It takes on roles such as business process outsourcing, call centres, and software. It can even do remote radiology, where an xray image is sent to India via a network, and Indian radiologist there diagnoses the condition, and reports back to the North American office.

From an American perspective, this kind of outsourcing delivers the benefit of lower prices. Debate rages over whether this benefit matches the disruption to local employment when jobs move to India.

From an India perspective, however, the picture is much more clearly favourable. Outsourcing allows Indians access to jobs which are by Indian standards high-paying. From this wealth flows benefits to other people and businesses around those employees. In addition, the demands for reliable electricity and other infrastructure to keep the outsourcing offices productive, can lead improvements in that infrastructure more broadly.

An Indian executive with a subsidiary of a US high-tech company put the appeal this way: "[In North America,] working with a software firm is a regular job. In India, it's a means to escape from one level of society to another."

There are some downsides to accepting outsourcing business, too. Especially in call centre field, it may lead to night shift work. Some of the work is all relatively low-status, without clear opportunities for promotion. And some workers report feeling a strain of having to keep up North American accents and use North American names through an entire shift.

In looking at what lies ahead for India, it becomes clear that the opportunity now confronting India is for a limited window of time only. Other countries with educated, English speakers -- such as the Philippines and Russia --- are probably gearing up to compete for the same backoffice opportunities. India's challenge is to take advantage of the wealth coming in today and use it to move up the value chain onto more solid ground, before their competitors leapfrog them.