| ||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
NOVEMBER 2003 |
IN THIS ISSUE
MAIN FEATURE The Outsourcing Boom : What It Means for India, U.S. By Ashok Deo Bardhan & Cynthia A. Kroll REPORT Indian Healthcare : Next Big Thing after IT? By Siddharth Srivastava OPINION Outsourcing Irony : Payback for the British Raj? By George Monbiot Publisher’s Note • Infotech India • Super Cheap Supercomputer NCM Awards & EXPO • White House Honor • Choosing a Trustee NeoCenter Opens • XOOM: New Money Transfer Service Finance: Securing Your Future • Diwali 2003 at Sunnyvale Auto Review: 2003 Pontiac Vibe • Bollywood • Tamil Cinema A Different Diwali • Recipe: Dhokla • Abhinaya Concert Sikh Community Center • Horoscope |
||||
|
Publisher's Note
The big buzzword today is outsourc-ing, and India has become one of the key beneficiaries. What started with information technology has spread into a wide range of fields—from call centers to accounting to medical transcription to state-of-the-art animation—as the West passes on services, India is looking at a possible exponential boom of opportunity and jobs. However, misgivings are already being voiced in the West that includes bitter criticism from the British trade unions, irate complaints from white collar IT professionals in the U.S. Could this pose a political challenge to the outsourcing bonanza? Ashok Deo Bardhan and Cynthia A. Kroll are economists at the University of California at Berkeley who have looked at the phenomenon and its possible ripple effect. They dwell on this issue in their forthcoming book, “Globalization and a High Tech Economy,” co-authored with Dwight Jaffee of the UC Berkeley’s Fisher Center for Real Estate and Urban Economics. In our cover story, they present a detailed look at what outsourcing could mean for India and the U.S. MAIN FEATURE
It’s not rocket science. As newspaper reports and economic news highlight the layoffs of thousands of people in U.S. high-tech, software and service sector companies, practically simultaneously, seemingly coordinated establishment of offices and development centers, most often in India, are resulting in hiring of thousands of new employees in that country. Worried folks are putting two and two together. We tabulated reports in Indian newspapers and business journals for the month of July 2003 alone and found 25,000 to 30,000 new outsourcing related jobs announced by U.S. firms. In the same month, there were 2,087 mass layoff actions carried out by U.S. employers resulting in a loss of 226,435 jobs. The jobs being created in India and elsewhere are in a wide range of services sectors, such as geographic information systems services for insurance companies, stock market research for financial firms, medical transcription services, legal online database research, and data analysis for consulting firms, in addition to customer service call centers, payroll and other back-office related activities. In addition to cost advantages similar to those offered by the manufacturing centers of East Asia, the ongoing outsourcing of business services jobs to India, Malaysia, Philippines and South Africa is also due to the widespread acceptance of English as a medium of education, business and communication in these countries; a common accounting and legal system (at least in some of the countries), the latter based on the common law structure of the Anglo Saxon world; general institutional compatibility and adaptability; the time-differential determined by geographical location leading to a 24/7 capability and overnight turnaround time; simpler logistics than in manufacturing, and a steady and copious supply of technically savvy graduates. India’s information technology enabled services (ITES) sector, the primary destination of business services outsourcing from Western countries, now directly employs over 200,000 people with around $2.3 billion in exports, of which over 70 percent are to the U.S. While the sector is still small, it is growing at a rate of 60 percent per annum. The software services sector overall has exports of approximately $9.5 billion, of which over $7 billion are to the U.S. India’s National Association of Software and Service Companies forecasts that exports would hit the $50 billion mark in the next five years. By that time, the business process/ business services outsourcing segment would employ over 2 million people, and the total exports of the IT industry would support over 8 million jobs. The growth of the IT sector in general and the BPO segment in particular is not confined to India. Firms involved with software services outsourcing and BPO are rapidly gaining ground in Philippines and Malaysia (call centers and other back-office BPO), China (embedded software, financial firm back-office BPO, some application development), Russia and Israel (high-end customized software and expert systems), and Ireland (packaged software and product development). Tentative evidence suggests that business process outsourcing and software outsourcing have together generated at the very least over a million jobs in the 1990s and hundreds of thousands more since the turn of the century. Between 1987 and 1997, the share of imports in inputs used in U.S. manufacturing increased from 10.5 percent to 16.2 percent and in high-tech manufacturing, such as computers and electronics, from 26 to 38 percent. This continues a long history of foreign outsourcing in U.S. manufacturing and the associated loss of blue-collar jobs in many industrial sectors. The motivation, on the part of U.S. firms, has been driven by the low costs of manufacturing abroad, primarily in the East Asian countries, such as Taiwan, China, South Korea, Malaysia and others, as well as the availability of skilled labor, the promotion of a business-friendly environment and the existence of production and supply networks in those countries. At the same time, the higher value-added, better paying jobs in management, finance, marketing, research and development have been retained in the home country. Most of the job loss is due to the technology downturn, the dot-com bubble, and the cyclical downturn in the U.S. economy. However, outsourcing that began as a response to very tight labor markets in the U.S. in 1999-2000 has continued, becoming a factor in the “jobless” or “job-loss” recovery of 2003. As in the last downturn in the early nineties, recession-based cost cutting by firms may end up as the permanent loss of jobs that remain abroad even during the subsequent recovery. The laid-off U.S. workers must then be absorbed either in new sub-sectors, brought about by innovation, or in other lesser-paying non-tradable services jobs. Vulnerability to outsourcing extends well beyond these sectors. The employment services sector, for example, lost over 300,000 jobs between June 2000 and January 2001 and over 150,000 between January 2001 and June 2003 (again a mix of recession-based losses and outsourcing). Links to outsourcing in this sector come through temporary employee agencies, which provided short-term employees to many of the industries. Outsourcing also has the potential to affect diverse segments of retail and wholesale trade, utilities and healthcare, to the extent that record keeping, accounting, sales, and information aspects of these sectors can be performed separately from other functions. The three major emerging market economies—China, India and Russia—have a sizeable higher education sector. While Russian expertise in many basic sciences and engineering subjects has been justly famous for decades, both the annual output and quality of science and engineering graduates from India and China have been increasing rapidly and are now comparable to the advanced countries. These countries face some constraints in exploiting this ongoing opportunity. India’s inability to provide education at the basic school level could stifle further growth in highly trained graduates. Russia faces growth constraints from a combination of institutional underdevelopment, erratic reforms and the gradual deterioration of the higher education system. The overpowering Chinese success in manufacturing may well be replicated later in the services sectors, but as yet business services outsourcing faces heavy language, institutional and cultural barriers. Rising wages and costs in these countries may spur secondary outsourcing to still less developed countries, but from the point of view of the U.S. labor markets that is no consolation. One possible scenario is that services job outsourcing proves more costly to the economy than the earlier round of manufacturing outsourcing. As centers of skilled high-tech professionals build up in other parts of the world, the U.S. and California may no longer dominate the next wave of innovations, and we would observe slower growth of high wage jobs within the U.S. and California. In this extreme situation, economic adjustment, in the absence of continuing innovation originating in the US, first might take the form of prolonged unemployment. Then, workers losing their jobs to outsourcing would finally be absorbed in lesser-paying services jobs. Alternatively, there could be a downward adjustment of salaries and wages, making the outsourced occupations internationally competitive again. As an alternative to this troubling scenario, a backlash against globalization could occur, both worldwide and within the U.S., slowing down the process of business services outsourcing. Opponents of globalization are already discussing protectionist measures and regulatory roadblocks in the form of restricting the kind of jobs that can be outsourced. If successful, this kind of protectionism, although inefficient from the point of view of the economy, may result in the retention of some of the outsourceable jobs. In the short run, this would moderate the negative impact on the real estate sector. A third possibility is that the industry shrinkage may come in part from domestic outsourcing. Instead of Bangalore or Beijing, jobs may move to Atlanta or Austin, thus avoiding a net loss of U.S. jobs. Finally, the most positive scenario is that the U.S. and California economies continue to fashion their outsourcing activities in light of the new production paradigm, keeping the “cream” of the new development at home, while the more routine activities are outsourced. Under this scenario, innovation would lead to a continuing stream of new service and manufacturing activities, and hence new jobs and occupations, while competition and the need for lower-cost supply would force more mature services operations overseas. Depending on their education and skills, individual workers might still find it difficult to find replacement employment at similar wages, but overall, the jobs lost to outsourcing would be replaced by higher wage jobs in the new sub-sectors brought about by innovation. But it is by no means clear that this will happen, so fasten your seatbelts for a bumpy ride. Further in formation on outsourcing trends in high-tech nonmanufacturing sectors and more generally on globalization and the high-tech economy is available in Bardhan and Kroll’s forthcoming book, “Globalization and a High Tech Economy,” co-authored with Dwight Jaffee of the Fisher Center for Real Estate and Urban Economics. - Ashok Deo Bardhan is senior research associate and |TOP| INFOTECH INDIA “We are expecting a 30 percent to 35 percent growth in exports over last year. The growth is above the national average and indications are it is on an upward swing,” Naidu told reporters here at the curtain raiser of Bangalore IT.COM 2003, to be held here between November 1 and 5. Attributing the growth to increased interest by foreign firms to leverage IT skills in India for improving their efficiency, he termed this as a “second IT wave”. Naidu said 44 of the 66 IT firms started since April this year were with foreign equity and had invested over Rs. 6.42 billion, a 44 percent jump over last year. “This year, we did not need to hard-sell Bangalore as earlier. Bangalore has become the chosen destination for global corporations who want to improve their efficiency from India,” he said. He said the software exports in the first six months this year were over Rs. 72 billion, a 65 percent growth over the same period last year. Bangalore, India’s Silicon Valley, has about 1,186 IT and BPO firms and employs 110,000 software professionals and 55,000 in the BPO sector, Naidu said. “We have taken an aggressive step towards branding our company to comprehensively differentiate ourselves in the marketplace,” Caritor global head of group strategy, marketing and products, Phani Nagarjuna, told reporters in Bangalore. “While our initial thrust in India was on offshore development, we are now looking at significantly increasing our marketing presence in India. To this end, we are investing in people and infrastructure,” he said. U.S.-based Caritor, which has five development centers in Chennai and Bangalore, plans to open one more in both the cities and add new sales offices in metro cities in addition to the existing offices in Mumbai and Delhi. “This will strengthen Caritor’s initiatives to target large Indian corporates in the healthcare, education and retail verticals,” Nagarjuna said. The company has among its Indian clients Metro Cash and Carry, EID Parry’s, TVS Motors and Sundaram Clayton. “The new systems provide what today’s data-intensive enterprises demand from their storage systems: affordable reliability, centralized management, simplified backup and disaster recovery capabilities, scalability and serviceability—and starting at a price point around $10,000,” the company said in a statement. The new systems also feature a unique approach hardware design that puts the massive power of NetApp into a 3U form factor fully integrated within the disk shelf unit, while retaining classic NetApp simplicity, the statement said. These features translate into low total cost of ownership and high flexibility, enabling customers to quickly and easily deploy the new systems pervasively throughout their organization (even in remote locations with little or no IT support) and to seamlessly upgrade to additional and/or larger NetApp storage systems as their data needs change without migrating their data, the company said. Infosys was first assessed at CMMI Level 5 for its onsite and offshore operations in June 2002, the company said in a statement. “The appraisal, conducted by Edward Weller, lead appraiser of U.S.-based Software Technology Transition, is yet another step in a journey of continuous improvement and global benchmark,” it said. The appraisal was conducted from Bangalore, New Jersey and Chicago, covering projects from 14 client locations in the U.S. and seven Infosys development centers. The appraisal, mainly conducted at onsite locations, is a one-of-its-kind for the industry, Infosys said. CMMI is an enhanced version of the Capability Maturity Model that integrates various other frameworks created by the Software Engineering Institute. CMMI enables not only the strengthening of software engineering processes, but also risk management and structured decision-making. It also facilitates the effective integration of people capability maturity aspects with software engineering discipline, the statement said. Revenues in the July-September 2003 quarter went up by 30.5 percent to Rs. 367.6 million from Rs. 281.5 million, the company said in a statement. On a sequential basis, the company’s net profit and revenues increased by 106 percent and 8.4 percent respectively, it said. Company CEO Madhukar Dev said it witnessed significant growth in software development and services in the quarter during which it added more than 10 clients in this segment. Suggesting a single license for basic landline and cellular telephony, TRAI said Reliance should pay additional penalty over and above the entry fee for already offering mobility services almost similar to cellular mobile services. TRAI Oct. 27 suggested to the government a single license for basic and cellular telephony services. While the cellular telephony service providers are not required to pay any additional license fee for acquiring the single license called unified license, the basic operators would have to pay the difference of fee they paid and that of fourth cellular operator. The penalty on Reliance would be over and above this entry fee, TRAI said. Announcing the quarterly results in Chennai Oct. 29, company director Gopal Srinivasan said the total revenue rose to Rs. 676.1 million as against Rs. 575.4 million in the same quarter last year. With the range of products for printing, computing and power management, the company was positioning itself to emerge as a dominant player in providing products and solutions for automating the point of retail transactions, he added. India, China to Lead Brahmos Test-fired The missile roared into the sky at 11:20 a.m. The Defense Research and Development Organization sources said that this flight had the primary objective of establishing precision guidance capability in surface-to-surface version. The flight trial had met all the mission objectives, they said. The ground range instrumentation from ITR and ships located near the impact point tracked the mission trajectory and monitored all the missile parameters from launch to impact, the sources said. The missile, jointly developed by India and Russia, was test fired to a range of 290 km with precision impact on the desired target point. This flight was intended to evaluate the precision guidance system and improved fire control system, Dr A S Pillai, chief controller, R&D, DRDO, and CEO, Brahmos, said after the test-firing of the missile. Though it was primarily an anti-ship missile, it also had the capability to engage shore-based radio-contrast target, they said. Brahmos could be fired from multiple platforms which included ship, land, submarine and air. President Dr. A.P.J. Abdul Kalam and Defense Minister George Fernandes had congratulated the scientists of DRDO and participating agencies on the successful test firing of the missile, the sources said. While multinationals look to India as an outsourcing hub, citizens of advanced countries are increasingly making this country their medical destination of choice. The reasons are the familiar buzzwords: high quality, whether in terms of people, expertise or state-of-the-art equipment. And, cost which could work out to be a tenth for similar procedures abroad. Medical experts have been talking of India as a major health-care destination for quite some time now. Long queues of patients from neighboring countries like Bangladesh, Pakistan, Malaysia and Middle East and Africa are a regular affair. The recent past has seen a sudden burst of patients from Western countries. A delegation of Indian doctors was recently invited to London to brief Tony Blair’s medical advisors about India’s healthcare advantages. The British government is desperate to break the logjam of over a million National Healthcare Service patients on waiting lists. One solution is to fly them over to Indian mega cities, Mumbai or Delhi with quality hospitals. At the Apollo Group of hospitals, one of the best in the country with 30 hospitals across the country, over 60,000 foreign patients from 34 countries have been treated in the last decade. Half have arrived in the last few years. Over 70,000 visitors arrive annually to India from the Gulf countries. “India has truly emerged as a healthcare destination of choice,” says Pratap Reddy, chairman of Apollo Hospital, which is negotiating with NHS to treat exceptional cases. Two areas in heart-care—angiography and angioplasty—are keenly sought. In the last year more than 60 foreigners from the U.S. and U.K. were treated at the Escorts Heart Hospital in Delhi. Lasik laser eye surgery, a popular area, costs almost six times abroad. Cosmetic dentistry, kidney transplants, bypass surgery and cancer treatment are the other areas of interest. Indeed, it has been a multitude of factors that have combined to make India, labeled as a third world developing country, as an attractive destination. The foremost is the proven record of Indian doctors abroad and adequate supply of similar brains here. There are more than 35,000 highly sought doctors in the U.S., which has strengthened Western confidence in the Indian medical system. An equally important facet is cost. Private sector specialty-hospitals in India offer treatment and facilities that meet international standards at 10 to 20 percent of the cost of treatment abroad. The average cost of a cardiac surgery at the best hospital in India is $4,500, with a success rate of 98.5 percent. Open-heart surgery in the U.K. can cost more than $20,000 and double that in the U.S. A single tooth filling costs $10 here against $300 in the U.S. Further, there is no waiting period for major medical procedures. In keeping with their international clients and big business, corporate hospitals have adopted the latest medical technology in order to plug the gap vis-à-vis the rest of the world. According to Gurmit Singh Chugh, marketing manager, cardiology, of Boston Scientific International BV, a subsidiary of the $3 billion Boston Scientific Corporation, “Medical technology used to be a differentiator between us and the developed countries. But this gap doesn’t exist anymore today because corporate hospitals in India offer the same technology as their counterparts in the rest of the world.” The Indian government has recognized the enormous potential of the global health care industry. A series of tax concessions and incentives for private investment in private hospitals have been announced. Import duty on life-saving equipment has been reduced from 25 percent to five percent to encourage hospitals to import the latest equipment The government estimates that the Indian health care industry is valued at $17 billion, which is 4 percent of India’s GDP and growing at over 10 percent every year. It is expected to reach $60 billion by 2012. A study by CII and McKinsey said that by 2012, India can earn over $2 billion a year from healthcare tourism alone “Like information technology, this sector will create millions of jobs and will earn huge foreign exchange,” says Reddy. However, experts also warn that a majority of the Indian population does not even have access to basic medical facilities which is a cause for concern. “It is important that a section of the money earned by the private hospitals be channelized into building infrastructure which will benefit the poor and the downtrodden,” says Arvind Bhardwaj, a physician who works for the Naz Foundation. The real face of Indian healthcare is pitiable. Villages and entire districts often don’t have primary healthcare facilities. According to the latest Human Development Report 2003, public health expenditure as a percentage of GDP stood at a paltry 0.9 percent. High-end hospitals should be nurtured not just to satisfy the health and lifestyle needs of a privileged few but ultimately there should be a discernible trickle-down effect on healthcare for the masses. - Siddharth Srivastava is a freelance journalist |TOP| INNOVATION  (Inset, top): Srinidhi Varadarajan (l) and the supercomputer cluster. Bang for Your Buck: Super Cheap Supercomputer – By Deepak Goyal Researchers under Srinidhi Varada-rajan at Virginia Tech have used off the shelf compo-nents and 1,100 Apple G5 computers to build the world’s fourth fastest super-computer, writes Deepak Goyal. Fancy a supercomputer? Many universities would love to have the heavy duty computing power that a supercomputer brings, but at $100 million a pop, it isn’t as if you can go to your local grocery store and pick up one. What if somebody slashed the price to $5 million? If you are doing a double take, you are in distinguished company. In a development that has stunned the entire computer industry, Virginia Tech computer science professor Srinidhi Varadarajan and his team have joined together 1,100 Apple G5 computers, and created a “home-built” supercomputer which could be the fourth fastest in the world, according to the New York Times. It is capable of 17.6 trillion floating point operations per second, with a combined storage capacity of 176 terabytes. The network is linked using 2,900 cables and runs at about 100 times faster than an average corporate network. Research areas that can benefit from the heft of a supercomputer include nanoscale electronics, quantum chemistry, computational chemistry, aerodynamics through multidisciplinary design optimization, molecular statics, computational acoustics, and the molecular modeling of proteins. Linking computers is the easy part, what’s hard is to ensure the computer cluster is stable. Varadarajan wrote a special program called Deja Vu to ensure that if an individual computer crashed in the middle of a calculation lasting weeks, if not months, another computer would take over seamlessly. “This is pretty much like open heart surgery because you’re working on a computer and moving an application while it still continues to run,” Varadarajan told the BBC. “You cannot stop the program, actually, and that’s the specialty of this system.” So now Varadarajan has one hot computer on his hands. Literally. Running 1,100 computers in a 3,000-square-foot area sends the air temperature well over 100 degrees Fahrenheit. The heat is so intense that ordinary air conditioning units would have resulted in 60-mph winds. Specialized heat exchange cooling units were built that pipe chilled water into the facility. Then there was the challenge of power supply. The supercomputer uses the same amount of electricity as 3,000 average sized homes. The guys who have done this also have a sense of humor. They have christened the supercomputer—unofficially, of course—Big Mac. It was built from scratch in three months, racing against a National Science Foundation deadline. Missing that deadline would have meant automatic disqualification from the NSF’s global supercomputer rankings, and the college would lose any chance of competing for top scientific research projects worth hundreds of millions of dollars per year. In early September, as G5s started arriving by the truck load, technicians rushed to install the hundreds of computers. “We did 238 machines in little under two hours, so we were humming along as an assembly line,” said Jason Lockhart, director of high performance computing, told the BBC. In techie jargon, what they have created is a world-class 64-bit InfiniBand supercomputing cluster using existing, off-the-shelf industry components. “The Virginia Tech team of engineers, computer scientists, and officials selected Apple’s new Power Mac, the G5, as the framework for the cluster,” the university said in an announcement. “For months, the university worked with Apple to purchase and adapt the new machines, the world’s fastest personal computers, as they rolled off the manufacturing line in August. “As they waited for the machines, the team identified Mellanox, the leading provider of the InfiniBand semiconductor technology, to supply the primary communications fabric, drivers, cards, and switches for the project. The university asked Cisco Systems to join the enterprising effort. Cisco’s Gigabit Ethernet switches were the choice for the secondary communications fabric to interconnect the cluster. Cisco provided a significant educational discount to support the project.” Weekly conference calls between the various players were organized in order to build the supercomputer at a record pace. Geographically, the operation was international in scope, with experts as far away as Israel and Japan taking part in the project. Varadarajan and Jason Lockhart, director of the College of Engineering’s High Performance Computing and Technology Innovation, initiated the venture at Virginia Tech. Varadarajan is an expert in reliability, a key issue in successfully exploiting terascale computing. “A system of this size generally sees its best application in what is known as big science research; massive simulations, models, computational engineering systems,” said Varadarajan. “Examples of these include things like nanoscale electronics; if you’re trying to invent computer chips 30 years from now you’re looking at atomic levels with a single atom acting as a switch.” Terascale computing—what a supercomputer does—is motivated by the needs of problems too large to be solved by any individual computer. The majority of these problems arise in the context of computational science. Until recently, progress in science and engineering has relied on a combination of theory and experiment. In recent decades, however, a third paradigm has emerged, namely computational science. The idea of computational science is to use computers to simulate the behavior of natural or human-engineered systems, rather than to observe the system or build a physical model of it. “Arguably Virginia Tech has revolutionized the world of supercomputing with a simplistic setup that can be duplicated around the globe by other institutions,” said BBC’s Ian Hardy. “It has documented how it did this from start to finish so if others want to follow suit, they can send off for a kit that tells them how to do it.” - Deepak Goyal is a freelance writer |TOP| OPINION 
Britain’s industrialization was secured by destroying the manufacturing capacity of India. In 1699, the British government banned the import of woolen 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 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 300 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 is 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 centers 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 labor to multinational corporations. Workers in call centers 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 centers appear to have been testing their systems at government expense before exporting them somewhere cheaper. It is not hard to see why almost all 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 centers moving to India can choose the most charming, patient, biddable, intelligent workers the labor 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 labor 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 U.S. 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 globalization in the parties and the newspapers which represent them. Free trade is fine, as long as it affects someone else’s job. So an 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 $17 billion 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 dependant 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. Interested readers can find more information about George Monbiot at www.monbiot.com This article originally appeared in the London Guardian.
© George Monbiot. - George Monbiot is a columnist for the London Guardian. He has taught at the universities of Oxford (environmental policy), Bristol (philosophy), Keele (politics) and East London (environmental science). His Web site is www.monbiot.com. |TOP| EVENT:  Celebrating Ethnic Media: 2003 NCM Awards & EXPO – By Rama Mehra The New California Media Expo will showcase immigrant and minority media in all its rich diversity, writes Rama Mehra. The New California Media Expo and Awards Nov. 18-19 will be headlined by “the first hip-hop media mogul” Russell Simmons, founder of Def Jam Music Group, San Francisco Mayor Willie Brown, |
