Posted on 02/17/2004 12:42:53 AM PST by sarcasm
BOMBAY, India -- The rising political reaction in the United States to the loss of some American jobs to workers overseas is creating a whiplash effect among India's leading technology companies.
"The dramatic buildup of opposition before the U.S. elections is disturbing," Jaithirth Rao, the chairman of a leading software and call-center company, MphasiS BFL Ltd., said in an interview at the three-day annual meeting of Nasscom, India's software industry trade association last week.
MphasiS, based in Bombay, has 6,000 employees, and its operations are spread across the cities of Bangalore and Pune. More recently, it has expanded to Shanghai, China and Tijuana, Mexico.
Companies such as MphasiS are the biggest beneficiaries of a movement among many of the largest corporations in the United States to shift certain white-collar work to low-cost India, where local companies are adding thousands of skilled, English-speaking employees every quarter to meet the increased demand. At the same time, companies such as General Electric and Microsoft Corp. are expanding their operations in India on everything from basic customer service to high-end research and development.
The political reaction in the United States against such outsourcing has built rapidly in the last year; nearly two dozen states have voted on legislation to ban government work from being contracted to non-Americans.
More recently, the Senate approved a bill aimed at restricting outsourcing of contracts from two federal departments. The House has not acted on similar legislation.
"We are concerned that this is federal legislation and that it is sponsored by a Republican," said Kiran Karnik, president of the software association. "Republicans are traditionally free-marketers."
Karnik, who has been vocal in promoting the cost-saving advantages of India's workforce, said he was perturbed that "all of the election-year rhetoric equates offshoring with job losses."
More than 70 percent of India's software export revenue comes from companies based in the United States, but less than 2 percent of India's export earnings comes from work for American governments, and the software and related service industries account for only 3 percent of India's economic output.
Still, the industry is increasingly associated with the Indian economy's upbeat mood, and its leaders are anxious. As fears of American white-collar job losses continue to rise, they say, the issue is expected to become a sticking point in trade negotiations between India and the United States.
Gartner, a technology research firm, predicts that the outsourcing reaction will continue to escalate at least through the fall.
"The aggressive campaign against moving work to low-cost destinations will become a political imperative for the presidential campaign," said Partha Iyengar, a Gartner vice president for research who is based in Bombay.
American corporate customers of Indian software companies were not conspicuous at this year's annual meeting. Corporations in the United States, and the Indian companies they contract with, kept a low profile.
However, Cognizant Technology Solutions, a company based in Teaneck, N.J., has 70 percent of its development operations in India and said it was still seeing five to eight customers and prospective clients from the United States every week at its offices in Chennai in southern India.
In a further indication that outsourcing is likely to be an increasingly touchy subject here, Robert Blake, the U.S. charge d'affaires in New Delhi, said last week that India's best response was to open its markets wider to help create other jobs in the United States.
Blake's remarks rankled India's government. "That is not the way to go," said Yashwant Sinha, the external affairs minister. "It smacks of retaliation that 'if you don't open up, we will impose restrictions,' " Sinha told reporters last week.
"The U.S. has to realize that by outsourcing, its companies remain competitive and save jobs," Sinha said.
Seeing that China is the biggest potential market for autos in the world, and foreign automakers are rushing to break into that market, I suspect that your economic analysis is lacking when compared to the folks actually making the decision to build there.
Keep repeating "potential, potential, potential, potential" as you make POTENTIAL payments to your POTENTIAL lender based on POTENTIAL profits derived from POTENTIAL sales.
Bet it doesn't work at your Bank...
Bet it does, as long as one ditches the loser-attitude.
Maybe because he doesn't want to lose his seat in Congress to someone else...
Hell, we need to do that with China and maybe a couple of other places, but China for sure.
Lets say you had a factory making wigits in Oregon. Right next door, you have your corporate office which employs the accounting crew and the sales dept. (about 100 people total)
If that company then decides to close the wigit factory and move in to China...
The statistics people will claim that "trade has created" every job left in Corp HQ.
Sometimes the more honest ones use the term "rely on" rather than "create", but most use the term "create".
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