Outsourcing

Since many IITians are leaders in the field of outsourcing software jobs to India, this topic seems relevant. A few random notes.

Outsourcing-bashing in the West

Imagine you are a computer programmer in India who has worked hard to gain software skills and now can produce software for developed nations at one-fifth the cost of what engineers in those countries can produce. Then you hear about bills being introduced in the US Congress to stop outsourcing to you because it hurts their local software programmers. "Double Standards" is what comes to your mind as you rage against this new wave of protectionism. Why can't they understand that in this age of globalization, outsourcing in good for them. True, a few jobs would be lost there in the short-term but the global economy will be stronger and more efficient and these workers can learn new skills.

Luckily not everybody in those developed country thinks of banning outsourcing. Except for those disgruntled workers who are lazy and cannot compete in the global economy, it seems like the business and government leaders who come to India, are with us. Moreover great Indian thinkers like Infosys's Narayana Murthy and politicians like Vajpayee think the same. They tell us that those workers and trade unions are wrong and we must work together in this age of globalization for global growth. Outsourcing is good for India and it is good for them too.

A Plausible Future for India's Software Industry?

I feel that I have become a Yogi and can see future. I see that in about 7-8 years when China has developed its software talent and has started competing with India for those outsourced jobs, wages are falling because of the competition, and while current foreign operations are continuing in India, their expansions are all happening in China citing their competitiveness. When we complain the same businessmen tell us, " I can help it. It is a global economy and they are more competitive." Wages fall by 50-75% with 30-50% unemployment rate among those software engineers who go and strike outside outsourcing companies for jobs but it is of no avail. Scary thought.

Do Foreigners like India?

About fifteen years ago, when I used to read the Wall Street Journal, I happened to read the results of a survey conducted on American business executives. They were asked about their travel including international ones and the names of cities they loved to go to and the one they hated the most. Not surprisingly, European cities were near the top in the international category. New Delhi topped too - the list of cities these American disliked the most. I doubt much has changed since then. Recently I read about Bangalore airport described as a rundown bus station by a Western executive who was comparing China and India.

Selling of Blood in India

When I was growing up in India I heard about people who used to sell blood on a regular basis to support themselves. A saw just a few of them but from what I saw, these individuals didn't seem fit to be blood donors. They were extremely thin with almost no blood. Doctors and nurses too knew the situation. I heard that when some good-intentioned doctors with professional integrity would try to stop them from giving blood, it would be met with protest with these blood donors. Their reasoning was simple - there is a shortage of blood, they are the cheap cost and willing supplier of blood, and who are these doctors to stop them. Most doctors and nurses, who perhaps either got incentives for increasing blood supply in the system, or because of the bind these donors were in because of their financial difficulties, didn't make a noise and collected their blood.

Kauai island (Hawaii) and Bio-diversity

I have been to Kauai a few times. It used to be a beautiful island. Once I was driving through this small island, I saw miles and miles of pineapple trees. Heard another island is fully reserved for sugar cane production. They used to be tropical islands with lots of bio-diversity. It might become worse if price of these commodities fall. Just like islands, nations need development of diverse talents and skills if it has to survive long-time. And these developments should be linked to local needs and not to needs of nations half a world distant and who could change their minds in a second.

Indian Tradition and Advantage

People, especially who got some sort of degree in business, like to talk about terms like "comparative advantage," and "free trade." A free trade can occur between countries with comparable strengths, say between France and Japan where France supplies Japan with Champagne and Japan sells Kimonos to them. However relation between India and the economically countries is a "master-slave" relationship where Indians do - even change their careers aspiration and lives to fulfill the masters' need.

Now you are wondering - No, not in my case. Right from childhood I wanted to write software programs and that's what I am doing now. We Indians write software because we are good at it. We Indians always had strong tradition in mathematics.

My answer is that I am not sure that the fact you wanted to write software programs is because of your natural inclinations or because of society's expectations. In India it is common for kids to be told that certain professions are desirable for them. I wonder, if the developed nations, had sudden need for millions of Tango dancers, because of some fashion trend. I can imagine kids in India training to be Tango dancers because that is what they have always liked the most and besides India has a strong tradition of dancing going back thousands of years.

Now coming to natural mathematical inclinations - there is hardly any need for maths in the type of software most of us Indians will end up writing. Besides, even if mathematical skills were needed, there is absolutely no evidence that we Indians are better than others. East European countries and far eastern countries are ahead of us. And even though it might be hard for some Indians to believe, an average American is better than an average Indian in terms of abilities in mathematics and sciences. In international comparisons of high schools in terms of science and maths achievements, East Asians lead followed by Europeans and Americans. India is nowhere because Indians schools are not included but my belief is that if they were included, they would fare worse than average.

What about our excellent English language abilities that give us lead over Chinese? I will repeat the arguments similar to I gave for mathematical abilities. Software writing for most part does not require excellent language skills and even if it did, Indians don't stand out on average.

Conclusions

When countries and people do what comes naturally to them and then because of their natural advantages if they can produce certain things more efficiently and sell to others, that's fine with me. However, this software outsourcing is a quite different ball game. It didn't come about because of some sort of inherent advantages Indians have. It happened because the West had the need for it. Indian talent should be used for developing India as a nation. Instead it has become just a cheap labor source for the economically advanced countries thus shortchanging India's future. Software jobs might be more prestigious than the cooks and drivers' jobs in the middle-east but come to think of it both are the same.

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