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.
Tuay po schEE? I'm not calling for tarrifs. I'm not calling for restricting companies who want to move overseas. I'm calling for ending corporate taxation at home. I'm calling for offshore countries to pick up the bill for defending offshore interests. How is this restricting? Or do you mean controlling the borders in regard to legal vs illegal immigration? Is that the source of your angst?
I'm sorry... but it sounds like you're saying that you want the government even more involved in employment practices than they are now -- how welse would it be the politicians' fault?
Offshoring is a fad that will die soon as all of the so-called "benefits" wither fail to materialize or get cancelled out by the negatives. Involving the government would be putting in a (bad) permanent solution to a temporary problem.
So what?
Frankly, I don't care that the Germans (and the French: see Square D) are manufacturing here and selling in Europe.
Europe does NOT allow slave labor, which is the point of my posts about PRC.
I note that you've managed to avoid that topic.
Are you a PRC troller?
I haven't yet encountered the strong foreign accent, but in my experience all tech support is script driven. I would love to do buiness with a company that had a second tier of tech support for folks who build computers.
I built a server last year that included a $500 Adaptec Raid controller, which didn't work. I could tell from the symptoms that there was some incompatibity with the motherboard, but I had to go through three weeks of painful and repetitive diagnostics before the motherboard manufacturer agreed to take the whole bundle in house for diagnostics. Sure enough, the card and board wouldn't work together without slowing everything down.
But even at that level of technology, everyone insisted on working through the script. My complaint is that I had done the entire script before making the first call, and I had documented all my steps in an email.
That was tried -- with Ross Perot. Knock him as you will, the primary motivation for his supporters was to change the stranglehold of the two party system and how both parties had the same agenda to outsource American jobs. Ross had many union supporters who showed up at his rallies, who worked his rallies. Oh but I remember--we're not supposed to say anything positive about unions on this board. (/sarcasm)
Both Parties MUST GO!!!
2008?? 2012??
I would URGE Ralph Nader to run...he has been the ONLY one talking about this issue for years!!
The offshoring model in fact is the opposite of free trade. It is not trade at all but labor arbitrage. Unlike real arbitrage, the act of exploiting the wage differences is not ending the arbitrage opportunity. US companies create captive offshore centers in which the local employees are used to fulfill demand in the US while their wages are kept isolated from that same world demand.
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