Outsourcing is Good
Find a Conversation
Outsourcing is Good
| Sat, 01-31-2004 - 11:22am |
Some critics argue that "outsourcing" of service sector employment to foreign countries will lead to a serious decline in U.S. white-collar jobs. In reality, outsourcing will reshape but not undermine U.S. service sector employment, making companies more efficient. It will also benefit consumers and export businesses...

Pages
India readies its case
A recent poll suggests that 68 percent of Americans believe that American jobs and foreign competition will be a major factor in the November presidential elections. As such, suggest analysts (mostly American), India should lie low and ride out the outsourcing storm being whipped up in the US. In India, a more aggressive response is being formulated. - Sultan Shahin
http://www.atimes.com/atimes/South_Asia/FC02Df04.html
US and UK beg to differ
Politicians in the US are wading into the outsourcing debate with gusto, recognizing a good nationalistic issue when they see one. Across the Atlantic, the British are rather more sanguine about jobs going to India, with economics scoring over politics. - Siddharth Srivastava
http://www.atimes.com/atimes/South_Asia/FC02Df05.html
i work at Hurix Systems in bombay. Our company is a technical/content providing company. our clients are from the US. they outsource to us since we provide cheap labor.
i am not complaining...since the money we get is better than any GOvt. job ...hands down!
But i do see the critics POV.
Funny thing, when america was trying to enforce laws banning outsourcing in certain sectors, people in india were saying "its wrong ...its not free trade...". But in my very own state, the fishing industry people are complaining that their jobs are being encroached upon by people migrating from rural India to Mumbai.
So i guess, when you are the recipient of an outsourced job, outsourcing is good...but if you lose your job as a result of it, its bad.
--Zen
Hi Miz-zenobia
The part of this whole outsourcing equation that I don't understand is this - people say that when people in India or China have jobs that pay well (but still less than U.S. workers get) and raise their standard of living, then we are creating a new market for our goods. But wouldn't U.S. made goods be off-the-charts expensive in India? Just curious.
Again, thanks and welcome.
Tuesday, March 2, 2004 (New Delhi):
The percentage of jobs being outsourced is set to double in the next three years and 71 per cent of those not using the offshore model will double by 2005, according to a survey by Hewitt, a global HR outsourcing and consulting firm.
The study covered more than 500 senior finance and HR leaders in the US.
But the survey says there are a few things that companies will need to be careful about.
The Hewitt study finds that cost reduction is the primary driver for outsourcing as 92 per cent of those surveyed cited cost as the main factor.
But the report suggests that leaders are often overlooking many people-related costs when it comes to outsourcing.
Out of those surveyed, 30 per cent indicated a negative change in morale in the home countries while 19 per cent reported a negative morale in the new sourcing location.
According to Hewitt's survey, people-related expenses, including training needs and cultural issues are not examined when companies decide whether and where to source their work.
While, most companies evaluate labour costs and analyse potential return on investment, less than four out of ten analyse the local economic and political climate.
Fewer still look at the impact of employee union considerations at home or in the location to which they will be moving operations.
But the survey had good news for India. Sixty per cent of those surveyed consider India as the top location for outsourcing.
The survey puts India ahead of China, Mexico, Canada and Ireland.
http://www.ndtv.com/template/templatebusiness.asp?slug=Cost+reduction+spurs+outsourcing%3A+Survey&template=Bpobacklash&callid=5&id=17765
U.S. Considering Moving First Corps Headquarters to Japan
MARCH 02, 2004 23:04
by Hun-Joo Cho (hanscho@donga.com)
Kyodo News reported on March 2 that the U.S. administration has set down a measure that will move its corps headquarters out of the mainland to Japan and restructure the U.S. Army’s command in Korea and Japan, unifying its headquarters.
In accordance with its the worldwide reassignment agenda, the U.S. government has informed Japan of the measure to move the First Army corps headquarters which is currently stationed at Port Lewis in Washington State to the Jama military base in Kanakawa County, Japan last November at the working-group security talks held in Hawaii.
The First Army corps is in charge of Asia-Pacific region and consists of 40,000 military personnel including an infantry division. It is commanded by a lieutenant general.
Under the US-Japan security agreement, “For the sake of jointly securing the safety of Japanese territory and the peace and safety of the Far-East, Japan can offer the land necessary for the military base.” It has been known that Japan has passed on its negative standpoint as to the military force, which covers the entire Asia-Pacific region.
In addition, if the headquarters is moved to Japan, the U.S. military command in Korea will be unified with the command in Japan in order to be absorbed into the headquarters of First Army corps, reported this newspaper.
Despite disapproval from Japan, the U.S. continues to negotiate with working groups, that considering the reorganization of the First Army corps as critical, reported Tokyo Shimbun.
http://english.donga.com/srv/service.php3?biid=2004030390618
By Rene E. Ofreneo
America debates ‘offshoring’
A backlash against the global outsourcing of blue-collar and white-collar jobs is sweeping America, Europe, and Australia. But the shrillest noise can be heard in the United States, where the outsourcing of manufacturing and service work—now popularly labeled as “offshoring” (obviously to emphasize the movement of jobs out of the shores of America)—is now one of the major electoral issues this year.
Seeking the vote of American labor and the American middle class, Democratic presidentiables John Kerry and John Edwards have denounced the jobless war-based recovery of the US economy under the Bush leadership as a result of the exodus of manufacturing and IT jobs to China, India and other countries. The United States, they warned, is not only de-industrializing; its cutting-edge IT-based service sector is also “disappearing” with the unchecked offshoring of IT jobs.
How many American IT jobs are being lost? Unlike in manufacturing where American job losses are officially estimated to be around 2.5 million between 2001 and 2003, job losses in the IT sector are guesstimates. Newsweek (March 1) put the figure at anywhere between 300,000 to 600,000. In 2002, Forrester Research projected a job exodus of as much as 3.3 million up to 2015. However, a recent University of California study indicates that job losses can reach as high as 14 million.
The emotional American—and recently, British and Australian—backlash against the offshoring of IT jobs is heightened by the fact that many middle-class families in the West encouraged their children in the last decade to take up IT-related education and training because the IT sector then was seen as the winning economic sector.
Today, many American programmers, engineers, technicians, researchers, data encoders, call-center operators and other IT workers are threatened by job losses and reduced wages and benefits. According to Businessweek (March 1), American database engineers suffered a pay cut of 14.7 per cent in the last two years; application developers, 17.5 percent; and system administrators, 5.4 percent. It’s a “race to the bottom” for America these days.
In the United States, a typical IT worker gets roughly $50,000 annually, excluding benefits. In India and the Philippines, a newly-hired call-center operator gets a starting pay of $200 to $300 a month.
Where will the present backlash against offshoring of IT jobs end?
Bush economic advisers and other American mainstream economists, including Robert Reich, the former labor secretary of Bill Clinton, are against any efforts to curb offshoring by big American companies. They argue that job protectionism will kill American productivity. They cite the growth in American productivity and the expansion of the American economy, including the dramatic rise of the Silicon Valley, when the United States allowed in the l970s and l980s the outsourcing of low-technology labor-intensive manufacturing such as textiles and garments to other developing countries. Thus, their major recommendation is for America to continue upgrading its educational program and industrial base, expand the broadband architecture for the IT sector, and encourage the workers to focus on high-value careers based on greater IT specialization.
The problem is that such high-value careers in the new economy are now a rarity, as even complicated IT-based tasks are being outsourced such as engineering and architectural works. Hence, a more precise name for the IT-based service outsourcing industry is the ‘IT-enabled Service Market’ (ITES) for virtually everything is being outsourced—from simple customer service and airline ticketing to house designing and software programming. Under a global and outsourcing-oriented ITES, the future of America’s best educated work force is imperiled.
Another problem is that IT job losses are being incurred without any significant new jobs being created in other sectors. In the l980s and l990s, the job losses in the manufacturing sector were offset by the job gains in the new IT sector. But today, there is no job boom in any sector to compensate for the job losses in the IT sector. Since Bush’s inauguration, American joblessness was estimated to have jumped by 33 percent and that there are now 2.8 unemployed for every job opening.
It is obvious that the ongoing offshoring debate in America cannot easily be resolved. The debate is also a microcosm of a bigger debate—what should be the overall direction of globalization and the global economy.
Of course, the twin debates have also serious implications on the Philippines. Our emergent call-center industry is being hailed as India’s nearest competitor in Asia, although the truth is that the Philippine call center industry (employing 20,000 workers) is simply no match to India’s highly sophisticated and multilayered ITES involving over 200,000 workers, programmers and engineers. So far, we seem to be competitive mainly at the customer service rung, not at the middle- and high-end levels of business process outsourcing involving creative and engineering solutions.
Nonetheless, we need to monitor the outcomes of the debates as these will determine the job prospects for our own IT workers. Likewise, we need to monitor what other developing countries such as South Africa, Eastern European and other South Asian countries (Sri Lanka, Bangladesh and Nepal) are doing to attract ITES businesses.
In particular, we need to analyze what China is doing as it quietly prepares itself to be the alternative ‘backroom office of the world��, a title presently held by India. In recent years, China, the ‘workshop of the world’, has been successful in attracting a growing number of electronic assemblers in the Philippines to relocate part, if not the whole, of their assembly operations to China. With its increasing proficiency in English and much-improved IT infrastructures, China might also be poised to edge us out in the call center industry, an industry that still has to reach the level of success attained by India.
http://www.manilatimes.net/national/2004/mar/03/yehey/business/20040303bus4.html
protectionism of American jobs, you may be out of yours. The left-wingers in this
country don't care about people beyond our borders- it's all about them and their
greed to have more than the rest.
Excuse me?
Pages