Archive » United Kingdom » THE FLIGHT TO INDIA
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| Thorsten von Thyssen Member Member # 4397 | Posted October 21, 2003 08:51 AM If you live in a rich nation in the English-speaking world, and most of your work involves a computer or a telephone, don't expect to have a job in five years' time. Almost every large company which relies upon remote transactions is starting to dump its workers and hire a cheaper labour force overseas. All those concerned about economic justice and the distribution of wealth at home should despair. All those concerned about global justice and the distribution of wealth around the world should rejoice. As we are, by and large, the same people, we have a problem. Britain's industrialisation was secured by destroying the manufacturing capacity of India. In 1699, the British government banned the import of woollen cloth from Ireland, and in 1700 the import of cotton cloth (or calico) from India. Both products were forbidden because they were superior to our own. As the industrial revolution was built on the textiles industry, we could not have achieved our global economic dominance if we had let them in. Throughout the late 18th and 19th centuries, India was forced to supply raw materials to Britain's manufacturers, but forbidden to produce competing finished products. We are rich because the Indians are poor. Now the jobs we stole 200 years ago are returning to India. Last week the Guardian revealed that the National Rail Enquiries service is likely to move to Bangalore, in south-west India. Two days later, the HSBC bank announced that it was cutting 4,000 customer service jobs in Britain and shifting them to Asia. BT, British Airways, Lloyds TSB, Prudential, Standard Chartered, Norwich Union, Bupa, Reuters, Abbey National and Powergen have already begun to move their call centres to India. The British workers at the end of the line are approaching the end of the line. There is a profound historical irony here. Indian workers can outcompete British workers today because Britain smashed their ability to compete in the past. Having destroyed India's own industries, the East India Company and the colonial authorities obliged its people to speak our language, adopt our working practices and surrender their labour to multinational corporations. Workers in call centres in Germany and Holland are less vulnerable than ours, as Germany and Holland were less successful colonists, with the result that fewer people in the poor world now speak their languages. The impact on British workers will be devastating. Service jobs of the kind now being exported were supposed to make up for the loss of employment in the manufacturing industries which disappeared overseas in the 1980s and 1990s. The government handed out grants for cybersweatshops in places whose industrial workforce had been crushed by the closure of mines, shipyards and steelworks. But the companies running the call centres appear to have been testing their systems at government expense before exporting them somewhere cheaper. It is not hard to see why most of them have chosen India. The wages of workers in the service and technology industries there are roughly one tenth of those of workers in the same sectors over here. Standards of education are high, and almost all educated Indians speak English. While British workers will take call-centre jobs only when they have no choice, Indian workers see them as glamorous. One technical support company in Bangalore recently advertised 800 jobs. It received 87,000 applications. British call centres moving to India can choose the most charming, patient, biddable, intelligent workers the labour market has to offer. There is nothing new about multinational corporations forcing workers in distant parts of the world to undercut each other. What is new is the extent to which the labour forces of the poor nations are also beginning to threaten the security of our middle classes. In August, the Evening Standard came across some leaked consultancy documents suggesting that at least 30,000 executive positions in Britain's finance and insurance industries are likely to be transferred to India over the next five years. In the same month, the American consultants Forrester Research predicted that the US will lose 3.3 million white-collar jobs between now and 2015. Most of them will go to India. Just over half of these are menial "back office" jobs, such as taking calls and typing up data. The rest belong to managers, accountants, underwriters, computer programmers, IT consultants, biotechnicians, architects, designers and corporate lawyers. For the first time in history, the professional classes of Britain and America find themselves in direct competition with the professional classes of another nation. Over the next few years, we can expect to encounter a lot less enthusiasm for free trade and globalisation in the parties and the newspapers which represent them. Free trade is fine, as long as it affects someone else's job. So a historical restitution appears to be taking place, as hundreds of thousands of jobs, many of them good ones, flee to the economy we ruined. Low as the wages for these positions are by comparison to our own, they are generally much higher than those offered by domestic employers. A new middle class is developing in cities previously dominated by caste. Its spending will stimulate the economy, which in turn may lead to higher wages and improved conditions of employment. The corporations, of course, will then flee to a cheaper country, but not before they have left some of their money behind. According to the consultants Nasscom and McKinsey, India - which is always short of foreign exchange - will be earning some $17bn a year from outsourced jobs by 2008. On the other hand, the most vulnerable communities in Britain are losing the jobs which were supposed to have rescued them. Almost two-thirds of call-centre workers are women, so the disadvantaged sex will slip still further behind. As jobs become less secure, multinational corporations will be able to demand ever harsher conditions of employment in an industry which is already one of the most exploitative in Britain. At the same time, extending the practices of their colonial predecessors, they will oblige their Indian workers to mimic not only our working methods, but also our accents, our tastes and our enthusiasms, in order to persuade customers in Britain that they are talking to someone down the road. The most marketable skill in India today is the ability to abandon your identity and slip into someone else's. So is the flight to India a good thing or a bad thing? The only reasonable answer is both. The benefits do not cancel out the harm. They exist, and have to exist, side by side. This is the reality of the world order Britain established, and which is sustained by the heirs to the East India Company, the multinational corporations. The corporations operate only in their own interests. Sometimes these interests will coincide with those of a disadvantaged group, but only by disadvantaging another. For centuries, we have permitted ourselves to ignore the extent to which our welfare is dependent on the denial of other people's. We begin to understand the implications of the system we have created only when it turns against ourselves.
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| User Member Member # 3726 | Posted October 21, 2003 12:01 PM Hi TNAVON, Your points are right... but there is nothing to worry about for those people who have strong expertise in IT, specialising in - 1. Enterprise application design/Analysis, All high level application design and analysis jobs (which are the most important in Software devept. life cycle) will remain in UK and USA (the project source countries). All of the final programming/coding jobs, day-to-day technical support, call centre, and Busines process outsoursable jobs will probably go to India and elsewhere - where you have low cost on salaries and overheads. If one is in IT, and has advanced expertise in Application design and analysis in various technologies with Project management and leadership qualities, the he/she WILL NEVER HAVE TO WORRY. Your jobs are safe here in UK and USA... these jobs (atleast most of them) will never be outsourced. If you are a "hard core developer or tech. support" guy, then you may have to worry, not otherwise. regards. |
| Cosmopol Member Member # 7165 | Posted October 21, 2003 04:02 PM quote: And even then, in tech support there is often a need to physically visit the machine or the server, which can only be done locally (until they invent teleportaion) |
| gn Member Member # 7170 | Posted October 22, 2003 04:40 PM quote:
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| Cosmopol Member Member # 7165 | Posted October 22, 2003 05:41 PM quote: Well, you better believe it, and... get connected yourself before dispensing unpleasantries... If you think that companies with thousands of machines and servers running in the building are going to routinely rely exclusively on tech support from overseas and "fly people in" in an emergency, there's something missing in your experience. There is plenty of opportunities to provide remote IT services and that market is certainly growing, but there is no way in the world it can replace local support completely, just like internet mega-shops will never drive away physical stores, from big to small. Tech support in a real company does not mean OS or app troubleshooting only; it means much more. |
| Kayalami Member Member # 5984 | Posted October 23, 2003 09:02 AM Hear hear -------------------- ---audi alteram partem--- |
| Thorsten von Thyssen Member Member # 4397 | Posted October 23, 2003 03:58 PM The future is in India. -------------------- ----------------------------------- |
| gn Member Member # 7170 | Posted October 24, 2003 07:44 PM Why only India - please do not forget Malaysia, Singapore, Taiwan, China................ |
| Monty Member Member # 5325 | Posted November 05, 2003 03:24 PM gn's last point is very valid, how long will it be before the jobs that are being exported to India move to China, where wages are even lower.....? |
| Kayalami Member Member # 5984 | Posted November 05, 2003 07:26 PM Where to after China - is it Africa's turn do you think? -------------------- ---audi alteram partem--- |
| Cosmopol Member Member # 7165 | Posted November 05, 2003 08:54 PM Or maybe, peaceful artificial intelligence will be in full swing; everything we need will be self-maintained, so we'll just enjoy our long and happy lives !.. Imagine all the people... |
| gn Member Member # 7170 | Posted November 07, 2003 11:53 PM The global IT sector turns another corner as poor countries queue to handle India's ever-growing workload. But as rates decrease with every deal, where does the buck stop? European and Asian trade delegations vied with one another at a technology fair in Bangalore on Sunday to lure Indian firms to open offices in their countries. Although the official blurb promoted BangaloreIT as a meeting to "curb skills shortages", market watchers will know it better as yet another step in the transition of Western IT jobs to the Indian sub-continent and beyond. "Many of European nations face shortages of skills in the IT area and they see this as an organised way to get in expertise as well as investment," said Kiran Karnik, head of the National Association of Software and Service Companies (Nasscom), as he opened the conference. "It is a better way to create local employment. Getting companies from India will help," he added. UK push Britain and Germany were at the forefront of proceedings, showcasing their economic strengths and describing themselves as a "gateway to Europe". Both countries had sent large delegations to participate in the fair hosted in India's technology capital, Bangalore, home to more than 1,000 foreign IT companies including Cisco, Dell, General Electric, Hewlett-Packard, IBM and Oracle. Britain's Deputy High Commission Stuart Innes said India already had a "major share" in the UK's £20bn a year computer software market. "Equally important is to maintain the United Kingdom as a prime destination for Indian companies in Europe. Over 450 Indian companies, many of them software companies from Bangalore, are already in the United Kingdom," he said. The Western companies' interests were plain to see. About 250 global corporations outsource their software from India, where engineers work for one-tenth the salary of their Western counterparts. Business sent to the Indian sub-continent is paid for at Indian sub-continent rates. Business sent to the Indian sub-continent and transferred to a foreign post of an Indian outsourcing company, closer to the client, is still paid for at Indian sub-continent rates. The loss to the Western IT professional is, of course, "attributable to global market conditions". Cost-cropping fight But this practice is on the verge of fragmenting yet again as other developing countries who have prepared a high-tech workforce slowly move in for the kill. This week, Chinese IT companies invited Indian software professionals to expand their businesses in the hi-tech zone of Chengdu, a province the country says is equipped with "an ideal environment for the software industry." Over the last 10 years, the economic growth rate of Chengdu's IT park has been 70 per cent and exports from its technology-industry and trade operations stood at $33m. India has already decided to invest $17.75 million in a cheap assemble factory in Chengdu. But a raft of investment in a new base for software developers and the wooing of Indian programmers demonstrates the area is looking to catch a slice of India's burgeoning workload from the West. "We are here to explore the opportunities to co-operate with the Indian companies to broaden overseas co-operation," Mr Zhanwegi, the general manager of Chengdu Summit Software told Indian IT professionals in Bangalore city on Monday. On an official visit to China next month, German Chancellor Gerhard Schroeder has already pencilled in a Chengdu stop to talk business with suppliers. The Chancellor's interest in German IT fixing is well-known. Just last month he opened a Siemens office in Abu Dhabi, UAE, and scheduled talks with local IT leaders both there and in Dubai's Internet City. Meanwhile John Rutherford, associate director of a government-run investment promotion cell in Hong Kong, said his city was "uniquely positioned" to handle any of mainland China's overflowing work due to its "multi-lingual skills and experience of doing business with China." Everyone is out for a slice of the cake, it seems. What does it mean? In short, consolidation. David Tapper, an infrastructure manager for International Data Corporation (IDC) says the global outsourcing industry will consolidate leaving behind a few large players in a market expected to touch $1 trillion within four years. "Consolidation is expected to continue, leaving behind but a handful of large global players that have a global outsourcing model and which can provide a full breadth of business services," he said. According to Mr Tapper, existing offshore firms will migrate from consultancy to utility computing, driving down costs as there is a shift towards on-demand services, he said. "Offshore providers such as Infosys, Wipro and TCS will also have to increase their presence in the United Sates to get more projects," he added, explaining the looming exodus of Indian businesses from the sub-continent to the West, as seen at Bangalore’s IT fair on Sunday. The consequence could soon mean out of work Western IT professionals living next to IT professionals from India (until clients move their work to Chinese companies) doing their former jobs for a fraction of the cost in the same Western cities. |
| Cosmopol Member Member # 7165 | Posted November 08, 2003 09:13 AM It would be nice to know where this is coming from... Thanks! |
| gn Member Member # 7170 | Posted November 17, 2003 08:43 PM SPECIAL REPORT ON THE U.S. ECONOMY Where Your Job Is Going A visit to Bangalore, India, a city where tech is hot, the drinks are cold, work is plentiful, and the salaries are a lot lower than yours. By Justin Fox
That was the genesis of the Indian IT services industry—now led by Tata Consultancy Services, Infosys, and Wipro. Foreign multinationals also eventually saw the wisdom of tapping into Indian talent in India at Indian salary levels: Texas Instruments led the way when it opened an R&D center in Bangalore in 1985. The rise of big India-based tech companies, though, has had special significance in a country that has long associated foreign investment with imperialism (understandably so, as the British Raj began as a purely commercial venture). Software exports may directly account for only about 200,000 jobs in a country of one billion people, but the Indian leaders of the software industry have become hugely influential in the nation's political and economic life. Their message: Economic openness is good for India, because India is perfectly capable of competing internationally. TCS, Infosys, and Wipro now each boast revenues of about $1 billion a year. That's still tiny in comparison with competitors like IBM's global services division ($40 billion) and Accenture ($12 billion), but it's clear that the Indian pipsqueaks have caught the attention of the big guys. Accenture now has 4,000 employees in Bangalore and Mumbai, up from just a couple of hundred a year ago. "They have the advantage of stronger brands," says Wipro chairman Azim Premji of his foreign competitors. "We're working on that. They have no experience with the global delivery model. We're masters at it." Premji, whose 84% stake in Wipro makes him the richest man in India, has a habit of making such bold, almost smug pronouncements. "U.S. society is not being reskilled and retooled to stay on top of the emerging environment," he tells me during my visit to Wipro's headquarters southeast of Bangalore. "You need to retool your educational system." A few miles away, on the sprawling Infosys campus, CEO Nandan Nilekani has no such harsh words for the foreign competition. But he, too, exudes confidence. "There's a sense that the worm has turned and our time has finally come," he says. "A lot of people tell me that the air here is like the Valley in 1999." Ah, the Valley. The world is lousy with places claiming to be another Silicon Valley. But in Bangalore the claims have an eerie ring of truth. For one thing, as in Northern California, the climate is a big draw—Bangalore is 3,000 feet above sea level and thus has the most bearable summer weather of any Indian metropolis. What's more, like the San Francisco area it boasts fine educational institutions (foremost among them the Indian Institute of Science, founded in 1909) and an openness to outsiders—born of the city's status as a big army garrison since colonial days and as the home of India's defense and aerospace industries since independence. There's even a wine country (okay, one winery) north of town. The real clincher is that despite constant complaints about the city's insane traffic, skyrocketing real estate prices, and fickle workforce—and constant efforts by other cities, especially Hyderabad and Chennai, to get in on the action—companies and people keep coming to Bangalore. Which, of course, sounds exactly like Silicon Valley in the late 1990s. And while Bangalore was a graveyard of failed startups in 2001, just like the Valley, the very corporate cost cutting that has meant continued lean times in California has brought tons of new business to South India. India is a developing country, and for all its affluence Bangalore is still a city of power outages (all office buildings and many homes have backup generators), inadequate roads, a third-rate airport, over a million slum dwellers, and lots of wandering cows. But it's become attractive enough that Indian expats are moving back. "In 2002 I thought, 'It looks like India is the place for global IT,' " says Sean Narayanan, an India-born U.S. citizen whose siblings live in the U.S. and whose parents spend six months a year there. "I had to get experience here." So he left a job with Booz Allen in northern Virginia to work in Bangalore for Cognizant, a Dun & Bradstreet software services spinoff. Narayanan and his wife are clearly ambivalent about the move—they live in a gated community east of town that appears to have been airlifted straight from Florida and are currently planning to stay only a couple of years. But still, they're here. "It's no longer considered hardship duty," Narayanan says. For another bunch of Bangaloreans, the call-center workers, the very idea of hardship is so, well, dated. In the late 1990s, GE Capital pioneered the practice of putting Indians on the phone with Americans. This first call center was in Gurgaon, then an obscure Delhi suburb. Now Gurgaon is bursting with glass office towers and glitzy shopping malls, and call centers have spread to every major Indian city—including Bangalore. In the process, they've spawned a consumer generation unlike any the country has ever seen. Indian call-center workers may make a lot less money than Americans (salaries start at about $2,000 a year), but they make a lot more money than fresh-out-of-college Indians who aren't computer geniuses have ever made before. My first encounter with this new India is at the Bangalore offices of Msource, which runs call centers for financial institutions in the U.S. and Britain. I tell the six young Msource employees gathered around me that I've heard call-center workers are materialistic, brand-crazy sorts who drink and smoke a lot. That's right, they tell me. I ask about their aspirations, if they hope to own a house and a car by the time they're 40. Most nod. "I want it by the time I'm 28," says Anshul Pathak, 23. Actually, although Pathak still lives with his parents, he already has the car. He joined Msource a year and a half ago and proved so good at cajoling American deadbeats into paying off credit card debt that he now trains new hires to do the same. Along with his Maruti Suzuki 800 subcompact, he has a Bajaj Pulsar motorcycle. His mobile phone is a Sony Ericsson T610 with a built-in camera. He banks with Citibank. On nights off he hangs out with friends in bars where he favors the local beer, Kingfisher, but others go for foreign concoctions like Bacardi mixed with Sprite. Or they go to Starbucks-like coffee shops where a cappuccino costs $1—an absurdly large sum to older Indians. Pathak watches American movies, That '70s Show, MTV. He brushes his teeth with Colgate. He owns a pair of Nikes and a pair of Reeboks. While much has been made in the U.S. media of how Indian call-center workers are trained to sound more American, the best "training" of all is simply the lives they lead. It's not all slavish imitation, either. India at its best is a lot like the U.S. at its best—a nation of staggering ethnic and religious diversity that somehow holds together by dint of tolerance and a sense of shared destiny. And now that India wants to join the material world, it seems churlish for Americans to begrudge it entry. "For the last 20 years, you've been telling countries like India and China to adopt free markets and join the global economy," says Nilekani of Infosys. "Now that we're doing it, you can't just say, 'Stop it!' " In fact, we probably really can't. India and the U.S. are already entwined in an economic embrace far more intimate than that which has traditionally linked trading partners, one that could be exceedingly painful to get out of. These guys know what we owe on our credit cards, after all. |
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