Slashdot Mirror
BusinessWeek on Outsourcing
hotsauce writes "BusinessWeek has a couple of stories on the outsourcing of white collar jobs to India. One is a cover story on GE's fundamental research lab in Bangalore where scientists work on everything from the aerodynamics of turbines to plastics' molecular structure. The other is commentary on "America's worst-kept secret", and the effects of the upcoming elections on it."
Only jobs that gives a high revenue can be done by people with high salaries (US&EU for example).
When the price drops on, for example, software is has to be done by a lot cheaper labour.
There will not be many software engineering or consulting jobs in the US in ten years or so.
This can't be a surprise to anyone knowing what open source is all about.
I've already planned my exit strategy. I am getting out of information technology next year. There is just no future in the US. Either you work for a small company and risk getting laid off due to the lack of profit or you work for a Fortune 500 company and risk getting laid off for no reason other than some Gold Collar worker thought it was a good idea.
This will not stop until we have leadership in this country that actually seems to care. Until then, I am leaving IT professionally and making a career switch into one of my hobbies, which is something that cannot be outsourced to India.
The U.S. is heading straight towards becoming a land of a permanent serf class, a sort of neo-fascist aristocracy ruling body over a nation of paupers.
(* Too lazy to look up which century it was !)
Don't go to a brothel if you want to buy broth
Funny how they never talk about outsourcing the CEOs or board members. You'd think you could get the most bang for the outsource by outsourcing the people whoe make the most, but do the least amount of the work.
The loss of jobs overseas isn't going to stop until someone makes a stand that having skilled Americans working will matter more than the bottom line of any company. Unfortunately, it's likely to get worse before it gets better.
2 ideas that spring to mind here:
One: What happens if this rush to off shore "skilled" starts to succeed? We (the US) is the largest consumer of products from around the world, but if skilled labor follows blue collar labor, the amount of people left to spend money on anything goes down. Even though moving that labor forces off shore will increase the purchasing power of the people in the country where the labor went to, their combined purchasing power and demand to purchase anything will not be anywhere close to what the same jobs in the US could produce (at least short to mid term). Judging by what happens to the world economy when the US economy suffers, just how much outsourcing is a good idea? When does it stop benefieting the companies and starts hurting them because they can't sell their products in a poor economic climate?
Two: In the US the commonly held belief is that if you want to get ahead, you get an education, and your hard work and academic achievement will be the keys to your success (Unlike India or China where there are relegious and other cultural pushes for education). If the people stop believing in that, and an education isn't seen as a step up, or providing an advantage less people will pursue it. In an information age isn't one of the most important factos in the labor pool is it's education and technical skill?
It's all about global competition - or so they say. I wonder what the ROI is long term. Since more and more companies are only looking ahead a quarter at a time, just to satisfy the wall street pundits, I bet the ROI is pretty good short term. So how do Western Europeon and American workers compete? Our salaries are higher, and our standard of living is higher. Eventually with enough investement and time India will be a developed nation and these differences will slowly dissapear. Jobs will also probably leak back to the US - but how long do we have to wait, and how do we survive?
In the end the US worker has to offer something that his/her indian counterpart can't. Language, proximity to the project, and superiour skill and/or inovation are just some advantages that people might leverage.
AngryPeopleRule
"Science is about ego as much as it is about discovery and truth " - I said it, so sue me.
I dont know why Slashdot is repeating this topic so very often.
It's a reaction to ESR meddling with the jargon file and putting in that rubbish about a strong libertarian element in the geek crowd. We're reminding the world that when we say "I'm a libertarian..." we mean "Please government save my job, more trade barriers, more tariffs, more protectionism!"
I'm currently two years into a degree in CompSci, and I have no intention of switching, despite the grim job outlook. I have tried other jobs before, and I came to realize that IT is the only thing I will be happy doing. This is the problem with the whole "retrain" argument. When those factories workers in manufacturing lost their jobs, they were retraining and trading in a menial, low skill job that was basically about a paycheck. If they retrain, they get either another equally dull job, or maybe a more interesting one. That is good. If I have to retrain, I'm losing a career that I really wanted and would have enjoyed, and I go into what, business management (yuck)? Or trades? I think trades is a really secure field right now, but there are two problems: I have limited practical trades skills, and there are lots of guys who are the trades equivalent of geeks who were programming in junior high. You can't teach a 20 something carpenter to be a better programmer than a lifelong nerd, and neither can you teach a computer nerd to be a better carpenter than a trades nerd. I have tried working trades jobs, and there are guys my age who are at skill levels that I won't reach for 8 years! A retrained programmer cannot compete in trades. To some extent, I think retrained workers cannot compete very well in their new fields period. Again, compare the lifelong computer geek to 2 year technical school grad riding the IT goldrush; 2 years of training does not give you the necessary skills.
Perhaps India will enjoy the same evolution. Maybe in ten years well-engineered software, etc. from India will have the same esteem which we hold Japanese products. Every industrial toddler country entering the world of business has to find its feet. Japan did--so will India
Harpo Tunnel Syndrome--my wrist feels funny.
I'm an AMerican and a former IT guy who does factory stuff now.
I like my new job. I'm actually in shape now, and last night a waitress threw herself at me.
I was shocked. I was a fat computer worker, now I'm muscular and all the girls are smiling at me. I walk past all the fat-assed, goofy Indians in the parking lot, and just scratch my head and wonder about this crazy, fucked up world we live in.
Yeah, but I think the next thing after the running robot is a burger flipping robot.
Is anyone else really hoping for a nuclear war between India and Packistan or is that just me. Bye Bye outsourcing if that happens. :-)
I worked for GE for well over a decade. I have dealt with the very people at GE-Wipro in Bangalore that this article glows about. My experience differs from that of the author.
In the beginning, the helpdesk was manned by GE employees, at the HQ of the business I worked in, in the US. Helpdesk is a hard position to keep staffed with quality people, for the reasons we all know. But, those pesky GE employees were _expensive_, so they walked the helpdesk out the door one day, and brought in an outside contractor known for doing helldesk outsourcing. And there was much rejoicing (at the VP level). Problem is, helpdesk quality fell drastically, as there was a crop of new people who didn't know the intricacies of the systems they were supposed to be supporting.
Soon, (coinciding, I suppose, with the end of the contract with Keane), it was noticed that the helpdesk was sucking. Rather than acknowledge the mistake, they decided to compound it. With great fanfare and jubilation, they were pleased to announce that the helldesk was being reworked. Oh, by the way, it's being run by a company called "Wipro" in Bangalore, India.
Initially, there were many problems. Eventually, it got worse. Helpdesk analysts who could not be understood by a western ear, utterly wrong advice, that sort of thing. One coworker of mine, having a bad battery (the Dell explode-o-cell model), called to get a new one. He was told to delete his hardware profiles and that would take care of it. Not just wrong, but damagingly wrong, and not even vaguely logical. Yeah, a battery is "hardware", but that's pushing it. The analysts would identify themselves as "Jim" and "Bob". Just this is insulting - as if we can't learn how to pronounce or recognize the name of someone from a different culture than ours? It's just a sign of not understanding the needs and/or culture of the clients.
A final note - the article seems to be holding this up as a glowing success. I think it's more than coincidence that GE stock has been consistantly underperforming the market for many years - since the day Jack Welch announced his replacement, in fact. GE was succeeding because of Welch, not because his replacement is sacrificing quality for cost, calling it a "Six Sigma quality initiative", and ignoring the failures that result.
Hopefully, business executives who read this article, will do a sanity check & see how GE is doing these days, before deciding to emulate a formerly glorious company's unproven CEO's failing strategy.
If you properly understand all this as a move towards a new feudalism, then it makes more sense. They are thinking things through jut fine. You just make the mistake of thinking that your interests and the interests of the folks perpetrating this crap connect at any point.
Stop laying there on your collective asses and do something about it. Contact your congress critter in your home state and bitch until ledgislation so that state and federal contracts can't be giving to companies that outsource overseas.
Supporting World Peace Through Nuclear Pacification
I am posting from China and I can second this. /.ers consistly cite that can't be outsource to either China or India. With the rapid econemy growth in China and India and sliding econemy in the US, more of those perspective innovative workers may not choice to go to US after they graduate and instead of staying home. Same innovative jobs are done by the same group in much lower cost.
Foreigner born Chinese and Indian take home 36% doctoral degrees in the US (20% Chinese and 16% Indian) and work on those innovative jobs
As long the CEOs for these companies are based in the west prices will stay the same and executive management will reap the benefits of higher profit margins.
Correct me if I'm wrong but haven't software prices basically stayed the same since 1983? Software for my C64 was about the same price as software for my PowerBook...
As long as I have mouths to feed and a mortgage to pay, I need my IT job to stay in the US.
Right now, our government is too concerned with a worthless war and lining the administration member's own pockets to even pay attention.
Perhaps we should outsource them...
There are other, just as valid points of view that see this hot new offshore oursourcing trend with a more skeptical eye. It's true that globalization is inevitable, and that means there is simply more labor to compete for (at present) fewer jobs. But everything is'nt all wine and roses with offshore outsourcing -- the start-up costs aren't trivial, there are time and cultural differences to overcome, and even when all this is done, sometimes the results are not satisfactory: Dell, for example, recently relocated some call centers back to the US after a raft of complaints about poor service.
If India is really going to be competitive, a lot of things are going to have to be upgraded there -- just an educated labor pool is not enough, you're going to need major infrastructure improvements to sustain these sorts of activities. This isn't free, and over time the cost of relocating labor there is going to go up -- either in terms of problems, or in terms of actual money invested in telecommunications, power, etc.
There's no question that India is going to become a major IT player over time. But let's not make more of this than what it really is.
Taiwan became big in semiconductor manufacturing because over the course of three decades of private and government research and experience they were able to become very good at it, producing high yields that made them competitive with US producers. It wasn't because of cheap labor. Taiwan's workers aren't that much cheaper than in the US, and Taiwan's per capita income is over 10X that of India.
Japan's car industry became big because of quality, not lower cost. The first incarnations of their vehicles decades ago were cheap crap, but they didn't get anywhere in the market. Their eventual success came from producing high-quality vehicles that were able to sell for MORE than US-made vehicles of equal size and engine power.
Steel workers in the US lost jobs not because of labor costs, which make up a very small portion of steel manufacturing, but because other countries were able to produce higher yields per ton of raw material.
However the current trend of outsourcing software development to India is a management fad in pursuit of cheap labor, for a type of work that does not lend itself to cheap labor en masse. The real savings really aren't that great -- you're lucky to save as much as 25%. The quality isn't very good, and there are many risks including budget overruns due to miscommunication, intellectual property and privacy infringement which are practically impossible to enforce in India (you're lucky if the courts will see your case in 10 years), and the costs of paying people to cleanup the junk that comes back.
If outsourcing brings real net savings, we'll see the benefits in other aspects of the economy, like cheaper goods and services and increased profits that boost the stock markets. However, there is a very real danger that it is likely to materialize as another "gold rush" like the dotcom boom, only that this time the corporations and investors are chasing after imaginary savings instead of imaginary profits. And when the reality hits and they can't deny it, there will be another economic meltdown.
---------
There is inferior bacteria on the interior of your posterior.
The analysts would identify themselves as "Jim" and "Bob". Just this is insulting - as if we can't learn how to pronounce or recognize the name of someone from a different culture than ours? It's just a sign of not understanding the needs and/or culture of the clients.
Speaking of that, one of the more popular activities these days for people doing a gap year or just looking for adventure abroad, is not just teaching English abroad, but accent coaching in places like India and China. To get them to speak English like Americans or Brits.
People say I'm crazy, I got diamonds on the soles of my shoes...
Second, recall little twenty year old quote on the US public education system:
"If an unfriendly power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war."
The US has reduced its public school system (with a few exceptions) to a public babysitting service.
Fundamental research is starting to be outsourced as well.
/ 10 /13/daily30.html
Well, not really. What is described in these articles is applied research. Fundamental research is still primarily the domain of the large research university. When you start seeing people working in India winning Nobel Prizes at rates competitive with people working in North America, that will be a sign that fundamental research is being done in India.
As this situation improves, it greatly decrease the barrier to entering the IT workforce in India and will continue to bring in an army of new workers for years to come
What we have now is an temporary imbalance because India's own economy cannot consume the talents of its own educated people to serve India. The fact that these people now stay in India to work rather than migrate to the US is a great thing for India. After a decade or so 10%/year economic growth India will start competing for the services of its own people. When that happens the cost advantage will disappear. We are already seeing Indian companies outsource or subcontract service sector jobs to lower cost countries.
This is exactly the same scenario that has happened with low value manfacturing. For a couple of decades offshore manufacturing of goods like athletic shoes has chased the lowest wage. As local economies grew when the manufacturing jobs were added to local economies the wage rates went up - along with education - higher value jobs moved in. Now there are no real low wage places left for manufacturing to move to, and it has become more cost effective to invest in automation and similar improvements. The result is that worldwide the number of manufacturing jobs is decreasing. The past few years China has been losing more manufacturing jobs at a higher rate than any other country because wages have gone up, and China has not modernized relative to the rest of the world making their unit costs uncompetitive.
http://www.bizjournals.com/buffalo/stories/2003
While these dislocations are very painful on a temporary basis, it is important to recognize that this is a temporary situation. Things equalize, and the jobs often do came back once the economics equilibrate. Most Japanese cars sold in the US are manufactured in the US, and in fact some are exported to Japan.
Fundamentally as worker productivity increases businesses will find it more and more attractive to hire people because their contribution to a company's profits is greater. Everywhere, on a global basis.
In another news to retailiate against the outsourcing backlash from US India has decided to ban US companies from selling cellphone equipment/chips/software in their market, which is expected to reach 100 million in next two years (another url says The user base is growing at about two million a month and is expected to cross 100 million by 2005.)(US market is about 110 million for comparison) and 500 million by the end of the decade. . Similar huge numbers are expected for PC and car markets. Also, they have decided to ban the cars companies like GM, ford and other US companies like Mcdonalds, Pepsi,coke and Hoolywod movies etc. from selling in India. The govt. of India said that the local people are losing jobs because of this trade.
P.S. in case you are clueless this story is made up. I just wanted to make a point that trade is benefitial to both US and India. So, it is stupid to put barriers against outsourcing/trade etc.
That's a good idea! Note to Indian coder types: Start saving all the money you can so you can start your own company. Trust me, within five years your job will be outsourced to Haiti or Madagascar, because our multimillionaire CEOs have decided that paying you $4000/year USD is too large a burden on their wealthy shareholders.
Also, invest in your parent company. That way, when they drive up stock prices by announcing your outsourcing, you can cash in.*
Seriously, take advantage of this while you can. If these corporate types have so little loyalty to their own people, imagine how loyal they are to you.
[I wish there was a +1, Drunken, incoherent rant]
* Actually, this is bad advice. It's generally a bad idea to invest exclusively in the company that cuts you a paycheck. If things go bad, you take a double whammy because you're not only out of a job, your investments are in the toilet as well.
You want the truthiness? You can't handle the truthiness!
What, you think that the people with Dubya's ear don't gain from this? Outsourcing ensures that everyone will work cheaper, which means the cheap labor conservatives on top get to keep even _more_ of the profits from our toil.
As opposed to wasting money on unemployment insurance, and the other "costs" that those former "expensive, overpaid" Americans will bring forth (1)
Or were you under the impression that the world is consequence free? Greed costs everyone, but mostly the one's least able to defend themselves against it. Welcome to corporatism, rhymes with "new world order".
(1) Also you assume that sending the jobs overseas is really benefiting Americans in general, instead of the top 5% that are engaging in it.
When I look at the companies most heavily involved in government subsidized H-1b/L-1 Visas and outsourcing these are universally _closed_ source companies that just can't compete with what the Open Source community is doing. Seriously: Compare the junk the Oracle and BEA are selling compared to what www.jboss.org _gives_ away.
Such a huge cognitive dissonance between the /. crowd and the Indians in India....
Igniting India's mind
Our lives are about to become *very* interesting. Thank you very much for everything in the last century, Americans : we Indians and chineses willl take it from here.
US is *so* 1999.......
However this place was an elite institution. There is a wide spread in the levels of Indian universities. The goverment wants to concentrate the money in the places where they make a difference, so some of the poorer universities cannot afford to buy the right journals. This means that they cannot keep up to date. The access to internet (and specificly www.arxiv.org) is a great help, but it is still difficult to do proper research if you do not get to go to conferences and talk to a wide range of fellow researchers.
My conclusion is that the current pool of able research labor big yet limited. The spread of internet cannot create an instant increase increase of this pool.
I wish India the best of luck :)