Slashdot Mirror
How India is Saving Capitalism
alphakappa writes "Salon goes onsite to Chennai (Madras) in India to investigate the whole offshoring phenemenon (free daypass) and comes up with an interesting series of stories. Katharine Mieszkowski starts with a company CollabNet which creates collaboration software for teams to work together on projects from locations all over the globe, and has centers in Brisbane (CA,US) and Chennai (India) - a company that would not exist if they didn't have access to engineers from India. She makes the case that in most cases, it is the necessity to survive, rather than greed that has fed the offshoring process. As Behlendorf from CollabNet puts it - 'We saved the jobs of the people who are employed in San Francisco by hiring people here [in India],' he says. 'I don't know that we would be around as a company if we hadn't done that. What was the right thing to do, morally?'"
The NY Times Tom Friedman has written many articles arguing a similar point.
- A Chennai resident
The wages paid to Indian workers are actually considered very good. The difference is in puchasing power parity dollars, and unadjusted rates. As more jobs are created in India, there is more competition for skilled workers and their wages increase. As the gap between US and Indian wages decreases, they will need to find other ways to compete than price. This is much like Japan did in the past 50 years: going from competition on price of good such as electronics and cars, to competing on innovation and quality. A good outcome for all concerned.
The only reason that the US dollar has any value overseas is that it can eventually be redeemed in the US. Someone has to eventually spend it here (although not necessarily the someone that you initially gave the dollars to). Otherwise it's just a piece of paper. The situation is the same with international banks - sure they convert currencies, but they do it in accordance with an exchange rate that is rooted in what a given currency will buy in its country of origin.