January 26, 2006
Written by C.N.
As part of their feature on emerging trends in corporate outsourcing, BusinessWeek Magazine has one particular article entitled “Angling to be the Next Bangalore” that summarizes how rising wages, a growing shortage of skilled workers, and desires by companies to diversify their outsourcing options are all likely to lead to a decline in India’s share of the total outsourcing pie. With that in mind, several countries are positioning themselves to be viable outsourcing options in the future:
China leads the pack, thanks to its huge human resources and success attracting manufacturing work. Already a force in writing software built into other products, China is now chasing India’s lucrative IT and business services work. Russia, Brazil, and Mexico are likewise piling in, offering costs and skills often on par with India’s, plus advantages such as closer proximity to U.S. and European markets.
Even tiny countries such as Nicaragua, Botswana, and Sri Lanka are trying to grab the brass ring. To lure clients, they’re sending trade missions to outsourcing expos, subsidizing training and office parks, and offering tax breaks. . . . To compete, countries often must improve their telecoms, airports, and even business laws — moves that pay long-term dividends. Clean, well-paying service jobs boost demand for educated workers, an impetus to improving schools and training. . . .
Egypt is selling itself as a low-cost specialist in European language call centers. Singapore and Dubai say their safety and legal systems give them an edge in handling high-security and business-continuity services. The Philippines, a former U.S. colony, draws on long-standing cultural ties and solid English skills to snare Anglophone call-center work. And Central and South American countries use their Spanish skills to grab call-center contracts for the Hispanic market in the U.S.
You should definitely read the article to get the full story — it’s very descriptive and easy to digest. I don’t have too much to add here except to say that although India is likely to lose some of its luster as the international king of outsourcing, I think this trend toward greater outsourcing options is a positive development — in one key aspect. That is, as more countries get outsourced labor, the hostility and anger that many Americans have toward Indians who they accuse of “taking over their jobs” is likely to decline.
In other words, the “blame” will be spread around the world more uniformly, instead of being almost solely concentrated on India, as is the case now. Being the anti-capitalist liberal that I am, I’m still not a big fan of outsourcing in general. But if any good is coming out of these trends, hopefully it will make Americans see that their jobs are being outsourced to plenty of other countries, not just India.
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Suggested reference: Le, C.N. . "The Future of Outsourcing" Asian-Nation: The Landscape of Asian America. <http://www.asian-nation.org/headlines/2006/01/the-future-of-outsourcing/> ().
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