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For
over a century now, the New York Times has been printing
“All the news that’s fit to print,” and is
widely admired for its “integrity and sound judgement.”
But on 13 February 2003, in Section W, Page 1, Column 3, appeared
an article titled Software Success Has India Worried.
The article contended that the Nasscom software conference,
being held that week in Mumbai, was dominated not so much
by concern over economic downturns and threats of war but
mainly by “worry” about “the growing threat
of a political reaction against outsourcing.”
“Is
the United States going to start turning its back on outsourcing,
the lifeblood of India’s software and services industry?”
boomed the NYT article in its opening thunderclap.
Huh!!??
I must have really, really, really missed something at the
conference, because most all that I have been hearing and
seeing everywhere around me, are energetic projections on
the heights to which the Indian ITES-BPO sector is headed;
serious debates and workshops on how to get there quicker;
reports of new multimillion-dollar contracts being bagged
every other day; and a thriving sector that seems set to catapult
India forward into economic ecstasy.
The hook being used by the NYT writer was of course the pending
New Jersey legislation that, if passed, would restrain government
agencies in that state of the US from farming out state contract
jobs offshore to persons other than US citizens. Scary? Hardly,
when you consider that US government contracts have anyway
accounted for way less than five percent of business to the
Indian IT services/BPO industry.
The issue has been blown up by the Indian general and financial
press too, as the harbinger of a desolate morrow for India’s
BPO ambitions, wherein the US private sector too would follow
its public counterpart and toe the patriotic line, if only
to cosy up to government agencies for smooth and favourable
treatment.
Get serious, guys! Business does what business has to do,
in order to remain competitive, cost-effective and profitable.
Private enterprise is in the game to make moolah, and will
do what it takes—mostly by honest and ethical means—to
make more and more moolah, local unemployment concerns notwithstanding.
And although the US may have double standards on everything
from global warming to nuclear disarmament, its industry—and
the government it controls—is very well aware that outsourcing
and offshoring, especially to countries like India, is probably
the greatest thing to happen to its economy since, well, Alan
Greenspan.
The rationale behind outsourcing was never more clearly stated
than by Hewlett-Packard’s services head Ann Livermore
when she said (quoted by CNET’s News.com):
“We think customers are going to put a lot of pricing
pressure on the consulting and integration market. We are
going to aggressively move everything we can offshore.”
Similar logic has been prompting global giants like GE, American
Express, Standard Chartered, HSBC, Delta Air Lines, America
Online, and some 300 others from the Fortune 500 list, to
do business with Indian IT services companies, and that’s
extending to BPO as well. Why, the Indian offshore development
model is so attractive that even the big boys of consulting,
including IBM, EDS, Accenture, KPMG, etc, are expanding their
facilities in India, just to remain cost-competitive with
the likes of TCS, Wipro and Infosys. When you have a company
like GE stating that it saved $500 million last year because
of its ITES set-up in India, that’s very compelling reasoning
indeed for myriad others to follow suit.
Nevertheless, the so-called BPO backlash because of unemployment
concerns remains a very real issue. The New Jersey legislation
move has reportedly already triggered similar initiatives
in other parts of the US. In Europe, several more companies
might well follow the lead of British Telecom’s employee
union, which is resisting the setting up of a BT call centre
in India. Weighed against the flood of outsourcing that’s
coming our way, the protests seem trifling.
Complacency or smugness would however be suicidal. That’s
why it’s heartening to note the mature and impressive
way in which things are being handled by Nasscom and the Indian
software industry, which in fact has all along been indirectly
helping the American economy get back on the fast track. Nasscom
has been trumpeting that the American banking and finance
sector alone has saved $8 billion in the last four years due
to outsourcing, and that Indian companies and their affiliates
contributed $215 million as taxes in the US last year. In
the next few weeks, expect to see strong lobbying against
shortsighted legislation, through Nasscom’s global PR
agency Hill & Knowlton. It would be unfortunate if we
have to go even further and take up the cudgels at the World
Trade Organisation’s redressal disputes forum to protest
that the Great Promoter of Free Trade is now contemplating
potentially restrictive trade practices.
Anyway, self-preservation being a natural human trait, it’s
not surprising that there are vociferous protests from all
those losing their jobs to the offshore shift. Yet that’s
the inevitable fallout of this next wave of globalisation.
It’s happened so many times before in the history of
the world—the manufacturing shift that took place a few
years ago being just the most recent in a long string of periodic
upheavals. This is the first time, though, that India is going
to be the major beneficiary.
While that happens, I’ll end with this message to the
New York Times: Yes, we definitely sympathise with
the 3.3 million Americans who will lose their jobs by 2015
as a result of the offshore shift, as estimated by Forrester.
But no, we’re certainly not worried about the
future of our IT services and ITES-BPO industry. Got that?
-
Val Souza, Editor
valsouza@expresscomputeronline.com
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