Africa Enters Global Market For IT Outsourcing

nusratt writes "MarketWatch reports that many organizations 'are moving away from India as the place to outsource, because of the labor churn, and Africa supplies the highest rate of return on investments. New York's parking ticket system is managed from Ghana, Nigeria has an entire ministry for ICT, and Mauritius is building its own CyberCity. Gartner predicts that up to 25 percent of IT jobs today will be moved to emerging markets by 2010'."

Comments

ummmmm.... security?

[JeanBaptiste]

Would you trust any sensitive customer data in Nigeria? Im not being racist, just that they dont exactly have a glowing track record.

Re:ummmmm.... security?

[Gannoc]

Just so ya know, you would have sounded less racist if you had mentioned the Nigerian scam

Jesus Christ, he didn't say "How can you trust blackies with sensitive information", he said "How can you trust Nigeria with sensitive information".

You can criticize a country, environment OR EVEN CULTURE without being "racist". I don't like beheadings in Saudi Arabia, human rights in China, or cutting off a girl's clitoris in India, but that doesn't mean I don't like Arabs, Chinese, or Indians. So everyone stop being so fucking sensitive.

Re:ummmmm.... security?

[drooling-dog]

I don't think that embezzlement is a primarily a crime of the desperately poor. Greed knows no bounds whatsoever, and there are plenty of well-healed corporate executives who are happily ripping off their shareholders big-time in spite of their wealth.

Re:Keeping Wages Down

[_Sharp'r_]

What this leads to over time is people in these third-world countries, as well as the people who are hiring them from around the world, gradually having a better life than they did before.

As one country develops to the point where it's workers are efficient enough to be able to charge more for labor-intensive work like a call center, they move on to higher-paid work and the call center work gets moved to yet another country.

You don't pay a backhoe operator to dig ditches by hand when you have a backhoe handy and it's not because you want to keep from paying the backhoe operator too much.

There is a reason for this, it's called comparative efficiency and it's why trade between individuals exists in the first place.

What you are missing is that in order to "outsource" work to any country, a company must pay the people who work there more than they were being paid already, otherwise they wouldn't work for them, would they?

The U.S. outsources to Canada

[otisg]

I read an interesting article the other day. This article was describing Canada as a great place for the U.S. to outsource its jobs, because:

1. same time zone
2. same language
3. similar work ethics and culture
4. lower wages
5. highly educated
6. geographically closer ...
Makes sense, eh?

Re:Its not racism...Nigeria has a problem

[bcrowell]

I have to agree. I run a small internet business selling my own physics textbooks, and recently I got a $1300 order from someone in Lagos, Nigeria. Ran the transaction on her credit card, and then waited for the money to hit my account before I shipped the order. My merchant service provider called me up, and explained that they were holding the money because there was a high probability of fraud. Contacted the customer. Her response: "Oh, if that credit card number didn't work, that's no problem. I'll give you three more, and one of those will work for sure."

The weird thing about it is the lesson it teaches about the banality of crime. I mean, c'mon, using a stolen credit card number to buy physics textbooks?? There must actually be students in Lagos who want to buy the books, and I suppose this is simply her way of increasing her profit margin.

Reminds me of China, where all these U.S. businesses tried to move into the market, and then found out that the whole country was basically run by Communist Party gangster-officials. India may be screwed up in many ways (population, children's lack of access to education, ...), but they are at least a more-or-less functioning democracy with a more-or-less functioning court system.

Same old corporate welfare

[danharan]

It is also vital that African countries nurture tertiary education, customizing tertiary education courses to capture the market and produce the needed skills to be attractive to investors.

Yay, let's encourage corporate welfare for foreign corporations!

In this tested and failed system, multinational corporations no longer need to pay training costs for their workforce. Governments also compete by subsidizing infrastructure - and sometimes by direct cash subsidies too.

God forbid we actually train Africans in IT so that they could deal solve their own economic challenges.

WorkForce Strength

[Greenisloved]

Reasons why India is better to Invest:

1.Upcoming Youth workForce:

I would like to remind everyone, that 50% of indian population is below 25 years of age and only 54% of popuation are literate.Slowly this is improving , people are imbibing english into their lifestyle more.After Bangalore, New Delhi ,Mumbai Hyderabad ,Chennai there are other cities like pune,Ahmedabad , Coimbatore ,Mysore coming up big time to meet up the standards.upLittle towns have already become better.Villages are improving etc.Looks like workforce is improving

2.Upcoming alternative IT workforce:

Already there are overwhelming amount of indians whose undergrad major is mechanical or electrical or some other non comp-sci degree but still they are seduced for quick bucks in IT.Honestly if u have good aptitudde and some basics of programming, one can sustain in IT field with hardwork.I was thus saying there is an upcoming workforce there.

3.upcoming Quality English Workforce:

Importance of english is overstressed in schools.Indians watch a whole lot of English movies , listen to Music and its almost a status symbol if you are good with english.And besides , Nerds are the heroes in India.You would watch Indian heroes in movies are projected to have a strong academic background .Anyone who can bring big bucks to the family is hailed and treated like a hero.So English workforce is improving tremendously.India has 18 official languages.Jus imagine if People in US speak so many languages.Languages come with diverse culture,customs etc.And English is undoubtedly the uniting factor among diverse Indians.All Work is documented in English becuz most of them dont know many regional languages.

4.Content with Salary
:
Most of the people with non comp sci majors who work in other areas earn half as comp sci workers.And if an IT employee asks for more money , that reform would not be easy cuz there are so many talented Indians wthout jobs stalking streets day and night to bring themselves and their families to a decent existence.Btw , The salaries provided to many IT people are very high already.They enjoy superior life style.The point is "Salary increase is minimal and would not be a burden to investros".So in the long run, they are stable and cheap.

I would still invest in India , cuz

1.Abundant and still latent talented English speaking IT workforce
2.Upcoming Quality of workforce
3.Democracy and approachable govt policies.
4.Already Established.
5.Investment cost is low and not likely to grow higher and would propagate to different unexplored places.

Sorry for the long Article , couldnt condense..

Equalization means down.

[Anonymous Coward]

The US standard of living is based on cosuming 60%of the worlds resources. So there is a problem bringing everybody up to that level.

US: Our Race to the Bottom

[reynolds_john]

If Gartner says it, It MUST BE TRUE (tm). Clowns.

The essence if stupidity is this - the more we "compete" with third world countries, the more we as a nation are going to lose. Third world countries don't have our living standards, our infrastructure, or many other opportunities we have worked for for so many years. They don't require benefits, which thanks to our broken healthcare industry (read insurance racket) eat up huge portions of company dollars. They don't require fair living wages, benefits, any kind of job security. So how do we compete globally? Do we push our standards into the toilet in order to accomodate corporate greed and government corruption?
We have two options - force our standard of living down to the early 1900s level in order to "compete" (what we are doing now), or have a US-based revolution that redefines America as a self-sustaining entity - reliance on our own farmers, manufacturing industry, service sectors, etc. In this mode, we refuse to give up the quality of life we have built for ourselves, and start requiring other countries to come to our level playing field if they wish to participate.

What amazes me is that with America's huge installed base of great programming and IT knowledge, there is no influx of jobs coming from the other direction.
Are we SO overpaid that our economy must first experience a massive depression in skills, education and fair wages in order to "compete" (artificially) with the rest of the world? Do other countries' people actually believe that somehow they won't experience the same problems and that they will all become rich and famous; their management won't outsource back to America if the wages are cheaper?

Say what you will about Unions, but my friends, America's Corporate Greed is ready and willing to exploit you, and teach your management the tricks of the trade. If you think we're overpaid over here, then check our statistics on labor at the department of labor and statistics url:BLS. Note that union workers on average get a few $ more per hour than non-union. And yet, people still believe they are evil. This is typical claptrap from businesses that don't wish to impact their profit margins in order to "compete". How soon we forget the awful abuse our parents and grandparents experienced at the hands of large business - and the need that created unions in the first place - it hasn't even been a hundred years.
Remember that everything over here costs a LOT MORE than in India or other countries, even if the vast majority of crap (and I do mean CRAP) we buy comes from China (hello, WalMart).

So, anyone care to speculate where the bottom is, and when we'll reach it?

Re:US: Our Race to the Bottom

[Corpus_Callosum]

The essence if stupidity is this - the more we "compete" with third world countries, the more we as a nation are going to lose. Third world countries don't have our living standards, our infrastructure, or many other opportunities we have worked for for so many years. They don't require benefits, which thanks to our broken healthcare industry (read insurance racket) eat up huge portions of company dollars. They don't require fair living wages, benefits, any kind of job security. So how do we compete globally? Do we push our standards into the toilet in order to accomodate corporate greed and government corruption? We have two options - force our standard of living down to the early 1900s level in order to "compete" (what we are doing now), or have a US-based revolution that redefines America as a self-sustaining entity - reliance on our own farmers, manufacturing industry, service sectors, etc. In this mode, we refuse to give up the quality of life we have built for ourselves, and start requiring other countries to come to our level playing field if they wish to participate.

There is one other alternative - the most practical one - make best use of our position as leader of the first world to innovate and bring new industries into existance (such as biotech, nanotech, advanced computer technologies [ AI, etc.. ], space tech, etc..) and allow the third world to commoditize the jobs that we cannot compete for anyhow. Allow them to take the jobs so that we can focus on doing what needs to be done anyway.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Political stability anyone?

[spurious cowherd]

I don't think you have a grasp on things
Africa, like most other coninents, has stable (very) and unstable countries

Senegal seems to be more stable than just about any South American country & can give some European countries ( think the Balkans) a run for their money

'Tis no wonder then that French Call Centers are focused there