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deepasri
09-22-2004, 05:23 PM
Is Job Outsourcing from the developed countries to developing countries (Call Centers, Software Developement, Medical Transcription, Back office Management etc.,) good for the Developed countries economy? or Bad?

Priyanka
09-22-2004, 06:11 PM
It is definitely good for the developed countries.

vasan
09-22-2004, 06:15 PM
Don't really know..

There are advantages and disadvantages to this for individuals.. But for the whole nation's economy.. I don't see any clear cut adv or disadv..

Too many things are involved, and I know too little to be a spokesperson.

v-

Priyanka
09-22-2004, 06:19 PM
பணத்தை அதிகம் விரையம் செய்பவர்கள ் யார்? m/f?

goodcomplanboy
09-22-2004, 06:35 PM
Theriyalaye'pa is my answer.

I dont know, whether it is good or bad for the developed country. But it is really good for the company which receives the project :ee: and the developing country

vasan
09-22-2004, 06:47 PM
But it is really good for the company which receives the project and the developing country


Short term.. quick money.. okie.. But for the country?!!

Not better than 'low paid' slaves for some other country, GCB. Its one thing to have development centers etc move to other countries and where intellectual rights and revenue belong to that country.. But you study, develop, and make all sorts of progress, GE & Microsoft holds all the patents and generate the revenue.. How is India going to benefit?

Its another form of the much berated brain drain, except that this time, it happens inside your own country and not even enough forex revenue to go with it.. India & other countries would become (potentially) like the sweatshops in the East making millions of Nike's..

Tell me flat out.. Is there any difference between that and call centers?

I agree with short term benefits. Few more jobs and some more money.. But I don't know too well, and I am doubting that it will benefit india's economy much.

If Indian companies take projects and earn revenue (like TCS or Wipro) or make their own software, cars, high-tech or low-tech stuff, and sell to other places -including developing countries to at least equal amount of trade, then thats a good thing..

v-

deepasri
09-22-2004, 06:59 PM
When I talked to some of my American friends, they feel that they don't have problem for people coming from other countries to US and work here. Because they feel that we are paying tax, and in turn we are spending our money here.

Whereas when they talk about outsourcing they feel that their jobs are going offshore and their fellow citizens are loosing their jobs just because of that. They feel that the big Corporations are cutting their expenditure by sending the jobs offshore.

My point is if a Big corporation has to exist and to retain their employees then they have to make profit first. To make profit they identified certain areas (here comes the outsourcing) and fired :( SOME :( of their own employees here in the developed countries. This is a bitter pill they have to swallow.

Think what happens if the Big corporations go bankrupt. Then the entire work force has to loose their jobs. Then it will be a big blow to not only the Economy of the Corporation but the entire nation.

So I feel, Outsourcing is good for the Developed Countries Economy!!!

Anybody buying my idea???

madhu_aish1
09-23-2004, 12:17 AM
An intersting article related to this topic http://www.bpowatchindia.com/msn/focus5.htm

Madhu

anainar
09-23-2004, 12:52 AM
Outsourcing ***** is not really good for any country. But becoming globally competetive is always challenging and good. The revenue per employee of companies lik TCS, Infy are in the range a $25000-30000 and mostly it is in the bottom of the value chain. This does not help India or any developing country at all in long term. But this can be used as a spring board to go up the value chain. Some companies like Infy are in the right track now having realised this. BPO is generally in the bottom of the value chain and hence helps the developed countries definitely.

There is another spin to this also. Business processes normally in the US employs not necessarily graduates. It requires some basic academic qualification. Of late it has been observed that college dropouts in the US are in the rise. The reason is employment. If it comes to that they have to get a college degree to get employment which is higher in the value chain, as BPO takes the bottom part, the overall education levels of the developed countries goes up. This might look convoluted, but it is a straight forward logic.

So it helps the developed countries in the short term by saving money and by making people/govt make substantial investments in education and keep the high value jobs in the US itself.

Cheers

RaasuKutty
09-23-2004, 01:25 AM
It is definitively good in short and long term...

One of the main reason for poor research and development, Product Development was ppl's buying power.. Till mid-90's, ppl weren't spending too much... Outsourcing has created a lot of jobs in India and hence will increase the purchasing power of ppl... Once there is a market, local ppl will try and win in competition... In another 5 years, we will see some more companies entering into new segments..

Take TATA motors for example in car segment.. They know that they dont have the tech nor the money like GM, Toyota or Hyundai but still the are improving their product daily and has come out with a good car (Indica V2) and they are able to maintain a good position in the industry.. Like this, we will see more ppl coming...

Key is how the Indian companies with stand competition... we can learn from Japan.. Once upon a time, even they were entirely dependent on America and later created a market in america and now, they r the number 2 economy in the world.. We have a good system, ppl and everything.. Its just time..

dinesh
09-23-2004, 08:56 AM
Outsourcing is definitely good for developing countries. There are several reason for this.

Not better than 'low paid' slaves for some other country, GCB. Its one thing to have development centers etc move to other countries and where intellectual rights and revenue belong to that country.. But you study, develop, and make all sorts of progress, GE & Microsoft holds all the patents and generate the revenue.. How is India going to benefit?

India is going to benefit in several ways. The first reason is that the people who are working in India will get exposed to the way these successful multinationals work, and it is just a question of personal initiative how these people will be successful. For example, if this person works as a developer for a financial institution, then after say 5 years he will know the intricacies of the trade. Then he/she can set up a company of his own to directly provide services/solutions to the financial organisations. Or he/she can set up a financial organisation based in India themselves, and using the technology can operate globally. How would these person have acquired this knowledge without outsourcing?

It is true that all the intellectual property rights will be with the parent companies, but you have to sacrifice a certain ammount to gain something. If you are not prepared to do that, you will never be able to compete globally. Every giant step is composed of severtal smaller steps. This is such a smaller step.


Its another form of the much berated brain drain, except that this time, it happens inside your own country and not even enough forex revenue to go with it.. India & other countries would become (potentially) like the sweatshops in the East making millions of Nike's..

Tell me flat out.. Is there any difference between that and call centers?

There is a very big difference. Sweatshops don't provide a stable job under more than decent working conditions in develoiping countries. Call centres and software outsourcing do exactly that. Remember the rampant unemployment during the 70s and 80s. Remember the disillusioned youth struggling to find a purpose of their life. Compare that situation with nowadays where a degree can get you a job in numerous outsourcing ventures. And that is jobs provided under western standards, because the companies which are providing these opportunities have a commitment towards their workers, unlike local companies, under which opportunities for development were far limited.


If Indian companies take projects and earn revenue (like TCS or Wipro) or make their own software, cars, high-tech or low-tech stuff, and sell to other places -including developing countries to at least equal amount of trade, then thats a good thing..

Yes, but this will not happen overnight. A software startup cannot produce a bestselling operating system within 6 months of startup. The capital and expertise to achieve this will come to these companies gradually. And they need to be around for such a longer period to achieve this. That is where outsourcing helps. It provides the companies with a steady revenue stream and also gives them experience in what the user needs. That is something no university can provide, even IITs. So in the long term these companies have the potential to become another Microsoft or another Citigroup. Surely this presents a far brighter outlook than the non-outsourcing world, where the graduates struggle to make a living and end up in local scoped companies with no experience in how the developed economy works.

Also on the developed country's side, outsourcingn contributes positively towards the economy by reducing the cost of a n end product. It increases the profit margins of corporations and make them more stable in the long term as pointed out earlier. People who complain about outsourcing in developed countries must understand one thing. Outsourcing is just another part of the international trade. You import a service from a nother country and pay for it. If you are not prepared to import from a country, then you should also be prepared not to export any products to that country and not make money out of that country. How many companies in the US will voluntarily reject exporting products/services to India and make money out of the people there? If they are prepared to that it is only just they do the trade the other way as well. Somehow the people moaning over outsourcing conveniently forget about this. Several companies will go bankrupt if they stop trading with developing countries (especially pharmaceuticals and defence firms).

In the long term outsourcing will lead to a global equilibrium. It will force the developed countries to reduce their cost of living to compete with emerging market countries and they will also provide greater spending power to the consumers in the developed countries and hence making the industries in the developing countries more profitable.

deepasri
09-23-2004, 01:34 PM
Well said dinesh!!!

Comenaughty
09-23-2004, 09:56 PM
well, outsourcing is good for the country which does the outsourcing as well as the country to which it is outsourced.... long term, short term, benefits are there for both eht sides..... according to me, outsourcing is a fine example of "Economies of scale"..... which means that, the parties specialize in what they arte good at and what can be done economically, so that the overall efficiency improves.....

simply said, cheap literate labor is available in india......but india does not have the money or resource to make use of it..... developed countries have got loads of $ and they r trying to make their cost structure economic to improve the bottom line (net income)..... cutting cost is the mantra in the big comapnies, outsourcing is the solution..... ppl who talk against outsourcing, dont understand one very important implication of cost cutting..... if the companies generate more profits, they will tend to invest more in US, which is good as this will definitely create jobs locally..... so in the end, one can understand that an "Economy of scale" is created!

naughty

vasan
09-23-2004, 10:13 PM
outsourcing is good for the country which does the outsourcing as well as the country to which it is outsourced.... long term, short term, benefits are there for both eht sides..... according to me, outsourcing is a fine example of "Economies of scale".


Not even logical Naughty.. :P

Why don't we then advocate every country outsourcing all their work to some other country?? :ahha:

There are other serious flaws too.. Cutting costs might be good for Dell's wallet, how is that going to improve US economy? Michael Dell might be richer, but hundred other low paid employees of his company lose their jobs. And there is NO measurable relief for their company.

Out sourcing only helps earn more profits. Just like sweat shops.

And to answer Dinesh, the only difference between Indonesian sweatshops making Nike and Bangalore call centers for Dell and CitiBank is that to do Nike's work, you don't have to speak english. Thats it.

There is NO job security in these companies either. All that they wanna do is hire people right out of colleges, use them up until burn out, and thats it. Thats the sole reason why labor is cheap in India - no medical coverage, no nothing like their US counter parts, apart from getting paid only 1/20th or so of their salaries.

Wasn't there an article in Geetham about these call center employee burn out and suicides and so on.. There is no provable longterm benefits to the current style of job out sourcing. Not to developed countries nor to countries like India.

Vasan

Comenaughty
09-24-2004, 01:20 AM
well vasan, i can only pity your ignorance..... do u know how much india has benefitted from this this outsourcing thingie? outsourcing to india has got 2.2mn jobs in india, which means upwards of $5billion in revenue/year..... well, thats the benefit which india's got from Foreign invesmsnt jus coz of outsourcing (call centres, sweatshops, watever).... now had this been not there, who would have got these fellows the jobs? not 1000 or 2000 itS 2MILLION jobs!

well, regarding dell, there are many thing u have got to understand and read the points below one by one....in the end decide, how the economy improves.....

1) its Dell Inc., which means it a publicly listed company and its not Michael Dell's alone!!
2) if a company's profits rise, the shareholder's benefit a lot and people would be bullish on the company's prospects....
3a) Dell is a growth based company....which means that the extra revenue genrated would be invested back in US. Every company here would look for future benefits with the extra $1 earned today so that they can grow and stay in business.
b) The cosumer sentiment on companies which do outsourcing improves coz of a real positive result generated by dell. this makes people spend and this in turn makes lots of comapny benefit as consumer spending rises.
4) Finally, GDP is a measure of economy. and invesmtnet and revenue generated by companies are part of it. this means, the GDP of the country increases.

finally you are talking abt 100 jobs being scrapped..... im talking abt 1000 jobs being created on the other side due to extra money being invested back in US (may not be call center, but other jobs)....

you are talking abt job security being bad of call center ppl..... well, all i got to tell is, competition is everywhere. if the call center ppl do the job well, they wont lose their jobs. customer service is becoming very important in US. so call centers will definitely exist....but if the call center ppl aren't competent enuf, the jobs will simply go to some other country like brazil or mexico or china.....

for a nation like india, which has 30% of the people below poverty line and 60% of the people without a TV or a telephone, its a boon!

naughty

dinesh
09-24-2004, 09:47 AM
Why don't we then advocate every country outsourcing all their work to some other country??

Because that's not the point of outsourcing. You only outsource if you can find people with a required level of skillset and also if the venture would provide cost benefits. That is why meny operations are still non-outsourcable. What most of the people who predict doomsday scenarios fail to grasp is, that only a very small proportion of a country's workforce can be realistically outsourced (actually this is the most logical statement you can get from anywhere - If you find a person can do a better job at a lower cost, you go there, even thirukkural endorses this)



There are other serious flaws too.. Cutting costs might be good for Dell's wallet, how is that going to improve US economy? Michael Dell might be richer, but hundred other low paid employees of his company lose their jobs. And there is NO measurable relief for their company.

Dell as a company will get richer. True. Dell's shareholder's(which will include its employees) will get richer. True as well. Since Dell gets richer it will invest the money in more areas/more technology. More people will get jobs. And Dell can reduce prices since it can subsidise the prices with profits. More people will be able to afford technology. More people will get interested in technology and more ventures in this area. Since Dell products are now cheaper, the companies using Dell stuff will expand creating more jobs, or be able to reduce their prices, again the consumer will benefit. This is just one scenario. Any more questions?


And to answer Dinesh, the only difference between Indonesian sweatshops making Nike and Bangalore call centers for Dell and CitiBank is that to do Nike's work, you don't have to speak english. Thats it.

There is NO job security in these companies either. All that they wanna do is hire people right out of colleges, use them up until burn out, and thats it. Thats the sole reason why labor is cheap in India - no medical coverage, no nothing like their US counter parts, apart from getting paid only 1/20th or so of their salaries.

Okay here goes.
1. There is more job security compared to having no job at all or working in a temporary underskilled job.
2. It is true that these companies expect their employees to work hard. But that is not just in India. Their direct employees are expected to give the same level of commitment too. Furthermore, you can only work hard when you are young, so if you are committed towards your work, I don't think anyone has reason to complain. If you don't like to work long hours then why do you go to a call centre. No-one is forcing you. You could instead work as a peon in some government office. But then you shouldn't complain about not earning much money or poverty.
3. The benefits are low. That is true. But isn't it better than the companies based in India itself? And the 1/20th of the wages are still better than the wages you get working for a local company.

It is easy to blame call-centres for the stress, but in reality no one is forcing anyone to do anything, you are not being sold to call-centres like sweatshops. If you cannot survive in such an environment then it is not for you. You cannot get the best without sacrificing something.