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November 09, 2005

Looks like companies that jumped on the "outsource to India" bandwagon might be facing a little trouble.

The incessant rains that submerged vast swathes of Bangalore in the last week of October couldn't have come at a worse time. The rains came on the eve of Bangalore's annual information technology exhibition - BangaloreIT.in, billed as one of Asia's hottest IT events.

Not only did the rains swamp the technology fair, but worse, they laid bare Bangalore's crumbling infrastructure at a time the city, India's hi-tech hub and capital of southern state of Karnataka, was preparing to showcase itself as the country's most attractive investment destination for IT.

Snarkiness aside, Bangalore is facing some serious problems.

Posted by AnneZook at 08:47 AM


It's important, I think, to make clear that you take no pleasure in the fact that one of the world's poorest countries is having some trouble lifting millions of its citizens out of poverty. Anyone who cares about the poor of the world should be saddened by setbacks such as the one that India has experienced over Bangalore. Only a raving American nationalist could take pleasure at another country's misfortune.

However, its also true that events such as this reveal why the rich nations tend to stay rich and why the poor nations tend to stay poor. It is very difficult to summon the political will to overcome all the technological/environmental/financial/human needs hurdles and develop to the status of wealth.

Posted by: Lawrence Krubner at November 11, 2005 02:53 PM

On the contrary, I think there's probably a complicated relationship between our desire for "cheap labor" and the kind of poverty that allows India to provide us with a high- and middle-tech workforce while most of it's population lives in mud huts or cardboard slums.

My snarkiness was directed at the USofA corporations.

For the people of India, no matter what their level of education or what their job might be/have been, I have nothing but sympathy. Were I not enjoying (hah) my first week of unemployment at the moment, I'd be donating generously.

Posted by: Anne at November 12, 2005 11:08 AM

George Bush has made it difficult to argue in favor of open trade, because wages in America have been stagnant since he took office. I think if Gore was in office, I'd have an easier time making the case for open trade. During the 1990s wages rose in America and rose even faster in places like Korea, Taiwan, China and India. It was a race to the top, with all nations doing better. There was no race to the bottom, with wages falling everywhere.

I suspect that we are still in a race to the top, with wages likely to rise everywhere, although Bush's tax cuts are hiding that fact by concentrating all prosperity in the hands of a few. I suspect that if Gore was President we'd see clearly that, rather than a world where competition drives down wages everywhere, we still live in a world where wages are likely to rise everywhere.

Personally, I do computer programming, mostly for the web. I am, therefore, in the industry that is facing the most direct competitive pressure from Bangalore, India. Maybe I'm blind, but I don't see the programmers in Bangalore as creating any kind of threat to me or my job. Rather, my boss is thinking of hiring some programmers in India, but only so they can help me. Hiring Indian programmers will save the company some serious money - you can hire top flight Indian programmers for as little as $10 an hour. But my boss, for now, needs someone in America whom he can talk to, who can explain the technologies evolution. The brainstorming sessions are, for now, going to remain in America, and there needs to be a programmer there, in the room, during those brainstorming sessions (but if the company I worked for wanted to do brainstorming sessions in India, would that be a bad thing? I bet there is a lot of untapped creativity in India.) To whatever extent what I do can be done in Bangalore, it seems to me that it should be. It's all the other stuff that can be done and should be done in America. The more creative stuff. The routine stuff can all go to India, and I doubt anyone will lose out in the process.

I realize that your mildly snarky tone is aimed at big multinationals that are fleeing America to get away from annoying workers. You are not necessairly aiming your ire at tiny companies with 6 employees. But that is the perspective that I see things from (the tiny company with 6 employees) and so I thought I'd voice the way I see it from where I am.

Posted by: Lawrence Krubner at November 15, 2005 05:13 PM

"On the contrary, I think there's probably a complicated relationship between our desire for "cheap labor" and the kind of poverty that allows India to provide us with a high- and middle-tech workforce while most of it's population lives in mud huts or cardboard slums."

Can you go into any detail about the "complicated relationship"? I'd like to hear your views on that.

As to India's poverty, I should think India's own misguided industrial policies are somewhat responsible for that.

I recall reading in the late 1990s that India was the only country in the world where its expatriates earned more than the GNP of the country they were from. At the time, India had a little over a billion people, and a GNP of $350 billion. It also had 15 million expatriates, who earned a little more than $350 billion.

I don't know if this pattern is still true.

Posted by: Lawrence Krubner at November 15, 2005 05:19 PM

Lawrence, I expressed myself poorly in that sentence. What I was meaning to say was that corporations want a highly educated but inexpensive workforce. I think the USofA population finds itself torn ("complicated relationship") when the country to which we're told are jobs are moving appears in the news as the victime of a natural disaster and our humanitarian impulses demand that we offer help.

Posted by: Anne at November 18, 2005 09:00 AM

And? For what it's worth? Outsourcing hasn't hit me and it's not really likely to. Nor do I (entirely) blame the Bush Administration for the practice, since they didn't actually invent it.

Beyond that, my thoughts on the relationship between corporations and employees and corporate profits and employee pay and benefits are almost incoherent, at least at the moment.

Posted by: Anne at November 18, 2005 09:03 AM