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Why Apple Backed out from India?
rmunaval writes "BusinessWeek reports an interesting article on why Apple might have backed out from India. The prime reason being, India has grown at a much more rapid rate than expected and is no longer the cheap destination for the companies. It grew at an astonishing rate of 9.3% last quarter."
"The turnover is high, and the competition for good people is strong."
My company is currently using Indian developers to augment our in-house staff. Every time the offshore company presents someone to us that cuts the mustard, we end up having to rotate someone else on after that person bolts for another company in India three months later. We keep getting told that demand is so high for QUALITY Indian developers that no one can keep them. They keep bouncing from outfit to outfit, getting salary bumps with each move. It's second hand information obviously, but it certainly does synch with what we've experienced.
Not sure how the subscription model for time.com works, but I have been able to access all stories in the Cover article without a subscription:
Bombay's boom
Hooray for Bollywood
India Awakens
My lost world
Worth a read.
An Indian-American Hindu committed to non-violent thought/speech/action alarmed by the global explosion of radical Islam
India is going through a tech boom similar to the U.S. tech boom in the 90's. Qualified computer-related experts are demanding higher and higher salaries and jumping to whatever company is the current high bidder. As the wages go up, the rest of India's economy booms. India is beginning to take on many of the good and bad aspects of the U.S. economy. With most of its over 1 billion people in povberty, China can out compete India easily on wages. Training just 1% of that number with technial support produces a 10,000,000 strong workforce. The process of U.S. jobs migrating to India will happen to Indian jobs over the next 5-10 years as China becomes the outsourcing destination of choice.
What are the major requirements for locations to which you want to outsource tech jobs?
- A stable power grid (if it's not there, build a small one yourself)
- An oversupply of labor with high population growth (to keep that oversupply rolling)
- A sufficient percentage of English-speaking workers.
The rest is training and, for large companies, will pay off quickly. I'm sure I've left off a couple items, but African countries, Indonesia and other PacRim countries, and SE Asia are where tech labor outsourcing is heading next.
This is a positive for these countries (standard of living will increase) and, in the long run, a positive for the US and other western powers (greater influence in those areas, long-term economic benefits).
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Yes, making money is obviously important, but it doesn't preclude doing the right thing.
As an example, the Fortune 500 electronics company that I work for does most of its R&D in the US, but there are also R&D centers in other countries, mostly from acquisitions. It does most of its manufacturing in the US as well, even though it could get away with doing the job much cheaper in emerging countries, particularly China, where environmental rules are pretty slack and labor costs are much lower.
We've got at least one fab in China, true, but it meets US safety and environmental standards. I'm sure that the pay is not what it is in the US, but if the pay there is like the pay here, it's above the national average for the job.
Here in the US, we regularly win awards for going well above and beyond governmental requirements for environmental safety. We've got a fairly green operation, as much as possible, considering what it takes to do what we do.
The company has established a well-funded charitable foundation that supports education and arts in the community and around the country - and even in the big tech downturn when we were losing billions of dollars a year, it was able to give away millions of dollars each year.
And the thing is, we're not particularly different from most other large companies. So the "make money at any cost" mantra is getting pretty tiring.
-h-
The cost of living and the wage are only one factor of the cost of an ousourced worker.
This is a very important point.
We have a lot of people in India doing contract stuff for us where I work. The price for the contractors is relatively low, but there is a *huge* infrastructure cost required to let them do the work. There's the data connection costs that you mention, but also things like VPN gear, terminal servers, MS CALs (our enterprise agreement only covers employees, not contractors), plus all of the staff work here to ensure that everything can be done reasonably securely.
That's just the concrete costs. There are additional ones that are harder to measure. Things like the potential costs related to misuse of our data by people in a foreign country, or the costs of supporting applications that may have been written by a completely different team or outsourcing company.
I have seen some good work come from the contractors, but IMO they don't provide any savings worth the effort of sending the work to another country. It seems mostly like another big corporation Monopoly money game where they make it look like saving money by transferring the cost to another division.
"...always new atoms but always doing the same dance, remembering what the dance was yesterday." -Richard Feynman