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A Thoughtful Look at Indian Outsourcing
thefinite writes "This article needs to be read by anyone interested in the outsourcing of IT jobs to India, no matter your opinion of it. It dispels some rumors (for example, if Indian IT companies do such bad work, why are over half of Carnegie Mellon's highest-rated programming companies Indian?). It addresses all of the arguments. Perhaps most importantly, it adds faces to the problem. It not only tells us about the American programmers who are out of jobs, but also about the Indians who are getting them. In the end of it, this is what Free Trade is about: people. This article makes that clear."
Irregardless of the angle placed upon the situation or the people involved, the "outsource-to-India" thing is affecting more than a few American jobs. This is a global problem.
Realistically, IT workers (non-management) need to consider their jobs redundant and over in five years. Make sure you've got skills that require onsite presence, like cabling.
The industry is just about finished, people, and it's getting worse. Give it a little longer and we'll see the likes of Sun vanish, HP is exiting the Unix market and the Linux bubble will eventually burst.
Can *you* make coffee?
I find it rather ironic that so many people in America, the land of capitalism, hate outsourcing so much. This is simple economics right out of Adam Smith. People in India can do the same things as people here in the States, and at a significantly lower price. Therefore, they get the jobs, and rightfully so. One good benefit for Americans is that this allows their employers to use that money elsewhere. And yeah, IT job salaries might fall, and some people might have find jobs outside the IT field. But for the most part Indians need these jobs much worse than we do. I'm willing to bet that as far as possessions go, the average unemployed computer geek is significanlty better off than the Indian worker who "stole" his job.
That's one thing this is NOT about: free trade. Free trade is when an unemployed American computer scientist can go to India to get a job. Guess what? It's impossible for Americans to get work visas in India. Why? Because they are protectionist.
People need to realize that the exodus of jobs is a one-way ticket. Indians can come over here and work as programmers, but Americans can't go to India. This is really a story of the American worker getting shafted by the illusion of "free trade." So let's stop the propaganda and say what it really is.
... it's the white collar execs (and wannabe execs) here in Corporate America that we're mad at!
They get the nice fat promotions and bonuses, while our jobs go elsewhere. And we are the same people they praised just last year as invaluable assets to the company.
So what happened? They can't get rich pulling fancy accounting tricks, so this is what they've resorted to.
I seriously hope that I'm wrong when I predict that this whole thing will fail miserably (taking the off-shore jobs with it).
Funny, it also looks like it's in part about the poor getting richer.
Anything worth doing is worth doing badly -- G.K. Chesterton
The key word is not "better" but "cheaper", it happened with manufacturing jobs in the past 2 decades... it started happening with other jobs now. As long as executive positions are not being outsourced Corporate America could care less about who is doing the job, and the quality of it.
In some sense it is economic suicide, sure you produce cheaper goods, but those who are in this country to buy them are out of jobs. I.e. they have no money to buy those cheap goods, and the people who produced the goods are too underpayed to afford those goods. This is why MBA schools should be shut down once and for all, they have been produced miserable failures for the past 2 decades, a ton of greedy idiot savants who are unable to see the whole picture.
I could care less if Indian companies can do the same job better, or cheaper. If that was the case Indian corporations would rule the market, if there was indeed a perfect free economic system as the article sort of tried to hint.
Oh, we can bitch all we want about it, as we have the right to free speach.
Now, whether we have a good basis for our complaints or not is the real question.
They are efficient coders because of the relative cost advantage they have over US based coders. Probably related to there being 4 times as many. US didn't have a problem that needed 4 times as many coders.
being devoid of western egos
I don't remember any part of Hindu that promotes loss of ego. In any case Indians have their own impediments with caste and family ties that probably cause as much organizational difficulties as individualism does in western organizations.
Agree with the rest but then I'm not a coder so it's 'your' job not 'our' job.
Two wrongs do not make a right, but the USA, along with most Western nations have been taking advantage of other nations through trade with developing nations for years (sweatshops anyone?), unfortunately it is just the way the world works.
See,
most of the jobs that are moving out of the country are the type of jobs that are high profile. And therefor we hear a lot about it.
Typically, it is programming projects that require teams of 20 or 30 people (maybe) and that lasts for a year or longer.
But many programmers are employed where proximity is important and where the primary product isn't the software itself. Maybe it is a small financial institution or maybe a factory which needs a few programmers to build in house systems.
Sure, it sucks when HP, Sun and others move their big and fun projects to India, but many jobs will remain here, because it isn't cost effective to move them to India.
The Internet is full. Go Away!!!
We've already had the correction. When some schmuck finishing his sophomore year of college made $80,000 for making web pages with Frontpage, that was a bubble that needed correction. We're on the other side of that now - when reasonably skilled programmers out of top-tier universities can't get jobs that pay over $30,000 (and they're lucky to have that). It's obscene to say that someone who gets a four-year degree developing a fairly technical skill deserves to barely gets paid enough to get by and make payments on their university debt. There's something wrong with this picture. Quite honestly, we're crossing the threshhold where going to college may no longer be the financially "best" option out there - trade school and a good apprenticeship in auto repair gets you a more marketable skill that actually pays better, with far less education (and cost thereof.) Again - something is wrong with this picture, and it ain't that programmers are "overpaid".
Are you serious? Have you worked with a programming team from India before? Had anyone come over to your company on an H1B to assist you during busy season? If not, you have no idea what you're talking about. What the hell is "western egos"? Do you know anything about the different Sects in India, and which one most college educated Indian workers come from? Trust me, India has just as many egotistical programmers as any other country in the world - so don't go around assuming either side is more productive.
The problem is that Western Culture has generated most of the wealth in the world today because of the virtues of inventiveness and risktaking. I don't see Indians having those virtues.
Why don't Indians create rather than accept being cheap labor? Let's be honest, they are no different than Mexicans who come to California to pick grapes. They just have degrees.
A national economy cannot be sustained if it doesn't encourage the creation of local businesses. This is why Mexico's primary foreign relation impetus with the U.S. is making it easier for illegal Mexican immigrants to gain legal status -- They want the money these illegals send back to Mexico.
Why can't they create jobs for their own people?
India and other countries like it may enjoy the benefits of outsourcing for now, but in the long term they are suckling at a teat that is drying up.
-- You see, there would be these conclusions that you could jump to
When the loss of a job means suddenly having to wonder how food is going to get put on the table for a family that depends on that income, we have every right to complain that a job is gone. Keeping your spouse and children housed, clothed, and fed has nothing to do with ego. Ego doesnt get involved until you decide that you're above taking a reduction in pay or position in order to obtain new employment, even though nothing else is available.
How many loggers while you're at it? Face it--the fantasy world of overpaid IT jobs is gone forever. You have a skill that is basically fungible in today's world, and can be purchased at a lower price than would sustain or satisfy you. What IT people have been failing to understand for years now is that technology expertise is not as valuable a skill as it was once perceived. In fact, a lot of technology work is drudgery on the order of rivetting and lever-pulling. Too bad for those who were counting on making $300,000 a year. Time to reinvent yourself. The steelworkers did it. The loggers did it. Now it's your turn.
In any case us western countries have had the lion's share of the distribution of wealth for far too long at the expense of poorer nations. I don't think we have the right to complain if an Indian coder takes our job.
Well, forgive me if I'm not as self depreciating as you are, but I feel as though I have *plenty* of right to bitch about my job going over seas. What's with this hippy 'let the rest of the world succeed while destroying ourselves' attitude? Why must I sacrifice my job for someone from another nation?
"Ignorance more frequently begets confidence than does knowledge"
- Charles Darwin
In any case us western countries have had the lion's share of the distribution of wealth for far too long at the expense of poorer nations.
There are two types of wealth: natural resources, and everything else. You might argue that natural resources are "distributed" in some unfair way, but by far most of the wealth in this world is created by people. Emphasis on created.
If I mow your lawn, fix your car, or write some software for you, I've created wealth. In return, you give me money, which is a token of the wealth you created and gave to other people (unless you happen to own a lot of oil, timber, iron ore, etc., in which case you got the money by selling off this wealth that you "found").
The west didn't get all its' wealth given to it. The economic climate was designed to be (and lucky enough to be) the most conducive to economic growth. It encouraged people to create wealth because they get to keep some of it.
As more countries reform their economic systems, the populace will create wealth for themselves, and the other nations with wealth to invest will see these new markets as profitable, and do business there.
That doesn't stop you from making wealth for yourself, it just means that you have more competition.
I say, bring 'em on!
"I have never let my schooling interfere with my education." - Mark Twain
First of there's not just one IIT; they are a system of seven institutions of higher education (Kharagpur, Mumbai (Bombay), Chennai (Madras), Kanpur, Delhi, Guwahati and the newest Roorkee).
Second, it's important to realize that many of the students from India who do the best in their undergraduate class become graduate students at those American institutions you listed as well as other institutions (some not very impressive at all) in North America and Europe. It is still a big deal in India to go a major American university. I have a few friends who did their undergad at an IIT campus. All of them left India for graduate study, because the research opportunities there are just not as good as in the West (although the situation has been improving steadily over the years). I will grant that the undergraduate education there seems to be particularly strong though.
Furthermore, it's important to realize that just because IIT admits such a small fraction of its applicants does not necessarily make the educational opportunities there better. Selectivity does not always equal quality. If anything, it calls into question India's ability to offer access to quality higher education for its population.
Learning is a cultural thing. While many american kids are focused on TV, Britney Spears, video games, etc, these kids start training hard for school at a young age, in the hope of their families to be able to enter IIT years later.
I do have to agree with this in general. In America, there is a very anti-academic tone culturally (even in schools). However, you have to question the quality of a life where from the womb all you do is study in order to get into a good university where all you do is work in order to get a code-monkey job which is your life.
Even when I went to highschool, there were probably a couple kids in a graduating class of ~400 I'd consider truly gifted students. Often I'm seeing the gifted students were foreign born, because their parents don't indulge their children with crap culture, but expect them to start preparing themselves to be citizens at a young age. It's usually the second and third generation parents who fall into the typical american lack of concern and discipline.
For this, I think you have to look at what kind of people are first-generation Americans. It doesn't just take a lot of work and/or a lot of money to immigrate to a foreign country. It takes ambition as well. Immigrants are therefore more likely to be ambitious about themselves and their kids.
1) Game over! Manufacturing:
17-18 million Chinese will migrate *every year* to China's coastal manufacturing provinces and cities *for the next 18-20 years*.
2) Game Over! Software/Hardware Engineering:
*320,000 engineers graduated in the Pacific Rim in 1999 (excluding Japan, where wages are high)
*65,000 engineers graduated in the US in 1999 (80,000 - if you count graduate students)
[[*1999 National Science Foundation, audited numbers]]
3) Game Over! American Technology Services Sector (e.g. Accenture, IBM (consulting), etc):
Massive infrastructure shifts to the services sector in Pacific Rim countries who have lost manufacturing jobs to China
There is virtually nothing anyone can do about outsourcing - and the fast developing intellectual capital resources of the rest of the world - that will insulate American workers, with the exception of regressive protectionism (which will result in an even worse situation).
In fact, *anyone* who's occupation does not *require* face-to-face contact
is at risk of displacement, long-term.
The next big 'thing' will be social entrepreneurial plays that bring social
and fiscal efficiencies into mature capitalism, on a large scale. Also,
people will learn - in general, and long-term - to be happy with somewhat
more limited material horizons (and probably enjoy life more). This is as
plain as day, and already in the cards.
Politicians will not/cannot do anything to abate the outsourcing trend. Why?
Because capital is "on the wire", and doesn't know national boundaries any
longer. Corporations answer only to fiscal mandates, created by law. Game over!
So, say "ta-ta" to the gravy train; let's learn to optimize our intellectual and social capital, learn to cooperate (intra- and inter-nationally), and become creatively and commercially fierce (like the rest of the world).
There are *three* general solutions to this problem, with the third being social 'adjustment', made by Americans:
1) Unlock the potential of American economic diversity with aggressive public policy. This means mandating changes - in telecommunications, manufacturing, education, and other vital sectors - that enable Americans to take advantage of their enormous intellectual capital.
2) Encourage the growth of social entrepreneurial activity, with the goal of creating massive private and public efficiencies from the great wealth of intellectual, financial, and social capital held by Americans.
3) Social adjustment. Americans will learn to cooperate (among themselves, and with others) more - over the long-term - and realize that there are limits and consequences to great wealth.
All solutions are related.
Here's to making those solutions happen!
I know of many US companies who make a living teaching companies in other countries like India about quality control and the way that US Businesses do business. If Indian companies had good quality, these companies would be out of business and not have business booming. I shall cite some examples of the quality of offshoring below.
Thing is, most IT workers, such as me, do not blame the people taking our jobs, but the companies making the move to other countries and cutting us loose. This is a global trend that is not going to stop unless there is some law passed against it, which I doubt will happen.
First it was a Labor Shortage which was a big lie by the Corporations to get rid of US workers and replace them with H1B Visa workers or outsource to India. Now that there is a surplus of IT Workers, they still claim there is an IT shortage and need to move more jobs overseas.
Where is the beef? Where is the quality that Indian companies are supposed to have? Apparently they did not have Quality at Dell when they moved a Help Desk over to India. Where is the quality in programs written? Security issues are a big risk and we are supposed to trust someone we cannot even watch from half a world away that they will not harm source code or be a risk to security?
Of course there is always hidden Malware to consider. Really nice of them to put in a back door or virus or trojan to access the corp system after the Indian programmers are let go when the project is over.
Oh yeah, the myth that it is cheaper. Consider the Hidden costs of Ofshoring nothing like a project going over budget and full of bugs and needing US developers to fit it. Once again, where is the beef? That quality is just not there once again.
It seems that India is America's silent partner. We may not even hear about it during the election year. When a government is more interested in rewriting copyright laws so that the RIAA can sue 13 year-old girls and fair use is out of the picture, I wonder who our politicians really work for? Certainly not the US Citizens, only Corporations. So of course they support the wholesale slaughter of US IT Workers and the export of IT jobs overseas.
Ah but there is a big risk involved in Offshoring. Sort of like taking all the company stock to Las Vegas and betting it all on number 35 on the Roulette Wheel. :) Just ask those who craft the contracts about the risks involved.
Nice to meet the people that are taking the jobs moved to India. Also nice to know they are not concerned that US Workers are losing their jobs to keep the Indian workers employed. I'd think if I was given a job at someone else's expense that I would quote my religious or culutral references instead as well when asked to respond to that. :)
Maybe we should personalize the US IT Workers too. Here is Bob, he worked for a Fortune 500 company for the past 15 years developing award winning programs and his work gained the company many patents. Bob holds a Masters in Information Systems. Management decided that he earns too much, so he was terminated and his job was sent with many others over to an IT sweatshop i
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
While I take offense and you trying to rank IIT above Caltech (as I'm sure the many Nobel prize winners from Caltech would as well,) I think you hit on an important aspect of American culture. We have a culture that does not promote education. We ridicule our smartest people (look at how many words we have in our vernacular for making fun of smart people.) We praise athletes or singers or pleasant looking people, but not scientists or mathematicians...
Large corporations (HP and Intel immediately come to mind) are fond of saying that they 1.) have to offshore to stay compettitive but 2.) America needs better education system because they can't find quality engineers here. These two thing seemingly contradictory at first, but they're not once you realize that maybe Intel would outsource to Arkansas if it was possible. Don't you think that if Corporation XYZ could open a new office in Arkansas, or South Carolina, or Wyoming, i.e. a place with lower cost of living and lower pay scales, then they would've done that before they "sent" their jobs to India? For that matter, even here in California you'd have a hard time hiring 100 programmers in Fresno, which is only a few hours from Silicon Valley and has 500,000 people living there. Of course there's no shortage of programmers in Silicon Valley, all needing $70K just to pay rent, but you cannot go to less expensive parts of the country and find skilled labor.
You didn't sacrifice your job. Your job disappeared, and no amount of wishing, screaming, arguing, protesting, legislating, hoping, lobbying, letter-writing, bribing, petitioning, imagining, discussing, complaining, worrying, fretting, bothering, sign-writing, stalking, or planning will bring it back.
Your best bet is to find another job.
This is how it is; it cannot be otherwise.
"Why continue to argue about it, just don't do business with companies that outsource to India. "
t ml
You better stop visiting Slashdot then, because their parent company VA Software is a big producer of software that assists in "offshoring" of jobs.
Just see their recent press releases here:
http://www.vasoftware.com/press.php/2003/1164.h
Hell, just look at their home page!
Or, the problem will correct itself.
I hope that Americans are wise enough not to do something so foolish as to enact legislation to stop outsourcing. Unfortunately, people are that stupid.
"no amount of wishing, screaming, arguing, protesting, legislating, hoping, lobbying, letter-writing, bribing, petitioning, imagining, discussing, complaining, worrying, fretting, bothering, sign-writing, stalking, or planning will bring it back"
You are quite wrong. Much of the debate of the next Presidential election will focus on the "free trade" policies that are gutting the middle class in the U.S. to the benefit of U.S. Big Business. Many many middle class people who used to have decent jobs who now are out of work, or working at WalMart, are mad as hell. American workers are coming to realize that they cannot compete with overseas workers who earn a pittance. In the end, no amount of money from Big Business will keep the electorate from kicking the guilty parties out of office. Thankfully Indian programmers cannot vote for American congressmen and Presidents.
--Slashdot: News for Turds. Stuff that Splatters.
What is the cost of protectionism? How many jobs will be lost be preventing companies from outsourcing? The recent allegations that I've heard suggest the GWB's attempts to protect jobs in the steel industry through import tariffs has resulted in more jobs being lost in dependent undustries, such as the automotive one. You want to penalise companies that outsource, yet this cost will be passed on to their customers, who might not buy enough resulting in job losses anyway.
You may implement fair trade policies. You may implement trade restrictions. You can declare war on India. You can vote Democrat. You can vote Green. You can vote Libertarian. You can enact a law that forces all US companies to use only US Citizens for all software engineering labor, to force them to use only foreign labor, or anything in-between. You can make it all free, or all restricted.
The reason businesses choose to hire cheap programmers is because that is how much they are willing to pay. If you artificially try to raise that price, they will not hire programmers at the higher price; the projects will simply go away.
You will not make your job come back. It is gone FOREVER. It is a dead issue. Politics and greed are simply irrelevant; this is the reality you must face and deal with constructively, by looking for ways to adapt your skills.
A brief aside:
I have little sympathy for the millions of my fellow Americans who charged into the gold rush of computers in the 90's who now have no jobs. I did not choose this lifestyle because I had dollar signs in my eyes. I chose it because it is who I am and have always been.
I am fortunate that people are willing to continue to pay me to do something which I enjoy and do well. But I am not so naive to think that this will always be the case; I am mostly concerned with whether or not I am providing more value to my employer than I cost. If I fail to do so, then it is up to me to find new ways to be productive.
And I'm lucky in that my employer actually asked me to provide weekly status reports. Imagine that -- he actually ASKED me to do something which I really wanted to do anyway: Once a week, I remind my bosses how I am contributing more value to him than he is having to pay me. And by doing so, he is happy because he feels he is getting a bargain, and I am happy because I am well-paid, enjoying my job, and likely to keep it.
But there's more than that. I'm also keeping up on the industries we're in, and the trends in those industries. And I am using that to get advance warning of what skills I will need to brush up on, and the likelihood of my company succeeding in certain areas, and most importantly, when the project I am is in danger of becoming cancelled by the company.
My resume' is a marvel of marketing: It tells an employer not just that I have skills, but that I do this because I enjoy it, have always enjoyed it, and have a history of seeking to make value for my employers.
I don't have to like doing this. I just have to do it. That is part of being a professional. That is part of adapting to reality.
This is how you deal with a down job market constructively! You can go ahead and do your superstitious lobbying and your arcane petitions to the witch doctors in Congress to somehow magically summon your long-dead, buried, and decomposed job from the grave. There is no evidence that such mythical sorcery has ever managed to successfully resurrect a job, and it's not for a lack of trying!
Fuck politics. Instead, market yourself well. Learn about the industry you work in. Make your goal to produce more value than you cost. Do these things, and you never need worry about having a job, regardless of what you do or where you do it.
scripsit rmassa:
That's a somewhat misleading statistic. I assume you're basing that on median income or something similar rather than cost of living data (I didn't find where you got your figures on the site you cited). As someone who has lived and worked both in the States and in a developing country, I fully appreciate how much farther a dollar goes in a poor country. It is quite nice, for example, to be able to afford to eat out all the time, have a maid, etc., while making less than U.S. minimum wage. However, once you move beyond food, domestic servants, and (to a lesser extent) housing, you realize just how poor you are. Want a car? Those are quite a bit more expensive than in the States. Ditto for any kind of electronics (computers, stereos, TVs). Travel abroad? That costs you just as much as it costs an American.
Bottom line: That $11,000 may make you as rich, compared to other Indians, as making $700,000 does in the States, but it still makes you poor on a global scale. For a geek, that's significant: imagine how rich $700,000 would make you feel if the shiny new laptop you wanted cost $200,000, and if a compact car cost about $2,000,000!
In principio creauit Linus Linucem.
God save this country from busybodies and good-government types who want "mandates" and "aggressive public policy". That horse shit has been tried for years in Europe, with unsurprisingly poor results.
Keep taxes low, spending down, and government regulations minimized and predictable. Everything else government does is secondary, if not counterproductive.
-ccm
Too much Law; not enough Order.
You want to penalise companies that outsource, yet this cost will be passed on to their customers, who might not buy enough resulting in job losses anyway.
But the consumers won't have money anyways, because all their jobs were shipped to India.
Get it? That's the problem. It's called the "race to the bottom". In a world with totally free trade, wages would quickly become as low as possible. I'm talking "don't ever think about owning a car or buying a house" low. This is not a good thing. What you end up with is not this magic thing where "everyone gets uplifted". What you get is companies bargain-shopping for the hungriest people.
Sure, tariffs and such can hurt if relied on to much, be they exist for a very good reason.
If you want to know what you're talking about, you should do a little research on Flint, Michigan. Sure those cars got made cheaper, but do you think any of those new workers in Mexico could afford to buy one? And what about the total devistation of Flint? There's more to worry about that "costs being passed on to consumers". There are things like human costs.
Life is too short to proofread.
It's all very remeniscent of the early days of computing and submitting programs to be run and then receiving the output a week later to debug. As I said above my experiences may not be common. Also outsourcing hasn't completely killed recruitment at the company and to be honest can be an advantage as we can pick the best candidates who then get exiting work to do rather than testing or writing test suites and the like.