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."

Comments

Oh crap. . .

[Who235]

We have to pay them close to a living wage?

That wasn't part of the deal.

Forget it, we're out of here. . .

Re:Oh crap. . .

[MBCook]

They were paid a living wage (or something close to it). The only difference is that a living wage in Cupertino, CA is WAY higher than one in Calcutta or Bangledesh. Heck, the living wage in Cupertio is WAY higher than one in Kansas City, MO or De Moins, IO.

Re:Oh crap. . .

[aussie_a]

Actually I wouldn't be surprised if they were getting a living wage all along. Problem is that the living wage went up.

Re:Oh crap. . .

[stinerman]

Not until the Indian workers train their Nigerian replacements.

Re:Oh crap. . .

[gEvil (beta)]

Heck, the living wage in Cupertio is WAY higher than one in Kansas City, MO or De Moins, IO.

And it's probably higher than it is in Des Moines, IA, too... : p

Re:Oh crap. . .

[sconeu]

Once they do, they get $20 MILLION DOLLARS FROM THE WIDOW OF GEN. SESE MOBUTU!

[this put in to defeat the lameness filter]
[this put in to defeat the lameness filter]

Re:Oh crap. . .

[Firethorn]

If I remember right, the cost of living in India is still something like a tenth that of the USA. A meal that would be ten bucks here costs a buck there. Now admitably this is partially due to an average quality of life loss, but I've heard of a number of retirees on fixed incomes moving there because it costs half as much to live there as they're accustomed.

Re:Oh crap. . .

[Anonymous Coward]

You wouldn't believe how much extra housing costs on Io once you figure in the extra rad shielding and periodic cleaning of the sulfur gutters. Volcano insurance isn't even obtainable at a reasonable price; everyone just does without.

And don't even get me started on the commute.

Re:Oh crap. . .

[Firethorn]

Not until the Indian workers train their Nigerian replacements.

The problem with this is that we're running out of areas that have decent education standards, easy access to raw supplies, and, perhaps most importantly, are stable yet have low wages/cost of living. India was fairly unusual in that they had decent universities/colleges(though not enough of them) churning out qualified graduates, a large labor pool, stability, and a cheap cost of living/wage range that encouraged importation of work.

Areas like Nigeria haven't solved these problems yet, thus raising the costs of locating there, even if their labor is dirt cheap. When you have to import the machines, supplies, and labor to build the factory and trainers to teach them how to operate the equipment, costs rise. It'll be a while before they have enough people skilled enough to replace indian programmers.

Not that I object to businesses building factories there, as providing jobs, income, and training are some of the best ways to improve the above. People with paying jobs generally don't have much free time available to go play rebel.

Re:Oh crap. . .

[arivanov]

The cost of living and the wage are only one factor of the cost of an ousourced worker.

You have to add the cost of duplicating power infrastructure because too many companies have moved in and the utility grid cannot cope. Current brownout+blackout rate is 20%+ during daytime and growing.

You have to add the exorbitant communication costs which will only grow up due to basic supply and demand laws. The fiber under the Gulf is still the same, there is no new coming up and demand has grown several times a year. The Eastern route is not looking any better because there India competes with the growing demand from China and other countries. 256Kbit there will buy you several E1s in the UK or the US (at the same contention ratio).

You have to add.. add.. add...

At the end of the adding all the numbers a worker in India will come up to less then US or EU costs in terms of salary and considerably more as far as infrastructure is concerned. From there on the overall numbers depend on how the work is organised, but I am not surprised at a company pulling out from India. There are plenty of other places around the world with comparable salary rates and considerably better infrastructure.

Re:Oh crap. . .

[lelitsch]

With rising affluence, what people consider a living wage also rises much faster than subsidence level wages. The wage for the average day laborer might only have gone up a bit, but what middle class workers such as programmers or engineers would like to earn is probably rising much faster. For them, a living wave now probably includes being able to buy a cell phone, maybe a scooter or car, a bigger apartment, a few nights on the town,... And these things are likely not that much cheaper than in the US or Europe because they cater to a relatively affluent group of people.
Some of my Indian (in the US) coworkers joked that the rents for a/c apartments with working plumbing and other amenities in Mumbay were actually higher than what they paid in a mid-size college town in the US. Yes, you could rent a carboard shack for $5/month, but nobody who can afford not to would.

Re:Oh crap. . .

[jcidiotashram]

i was in India this april, and took my family out for dinner, the day before i left for US to an upscale restaurant. for a group of 10 people, i paid around 900 Rupees, which came to $19, the same that i spent last night when i went out to eat here in US. It is not right that the quality of life in India is not as good as here. i.e., if you earn in US and spend it in India it is great. but if you earn in India, then that meal we had was a luxury. it is very complicated. the hype about these high paying software jobs is very rampant in India and everybody wants a share of the pie(and i don't blame them). but the problem is sometimes i worry whether Indians is also going the same direction as US. i.e., abandoning the manufacturing sector(which is very vital for a good industrial growth) and giving more importance to the service sector. just like Apple major companies have their high end solutions R&D labs in US, so in reality there is not much value added here. it is sometimes sad that the young engineers are flocking the software industry than the traditional industries. it is about time, we had a reality check

Re:Oh crap. . .

[mabhatter654]

India is a REAL free market (outside the social Castes, but they're not legal anymore, kinda like discrimination isn't legal in the US anynmore) and they are starting to catch up with the US standard.. the joys of schooling in the USA then going home to being dirt poor don't last long. The only reason China is still cheap is the govt controlled labor market over there. (Work or be shot! and forget about Unions, funny hun) There was a front page article in the Wall Street Journal last week about how housing prices in some big chineese cities (not Hong Kong!) are outstripping the pay of even the people with masters and Phd degrees! And the Local govts are complicit with developers to sell off the public housing driving the costs higher. In "communist" China!!! Doesn't sound very communist to me..

Re:Oh crap. . .

[epicee]

And by having a US standard of living you mean the country has to have good burger joints?

Re:Oh crap. . .

[blincoln]

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.

Markets work yet again

[nelsonal]

Funny, back when there was so much lather over outsourcing everything but the CEO to India, a few folk mentioned that this might happen and were replied to that with 2 billion people it won't happen in our lifetimes. Hope you are all doing ok!

Re:Markets work yet again

[Firethorn]

While I can't claim to have predicted that this would happen so soon, I will say that I saw it coming.

Part of what happened that made this happen sooner is that the Indian quality of life, bolstered by all sorts of outside companies outsourcing there and pouring money and jobs into their economy, rose. This of course becomes a positive cycle, where the newly wealthy* start demanding more**.

This sucks up potential labor far faster than simply looking at the unemployment/agricultural worker numbers.

We're seeing the results now. India's currency is gaining strength, the dollar is loosing strength. Soon it'll no longer be as economical to outsource to asian countries(China will take longer). Soon it'll make more sense to outsource from expensive american cities to inexpensive smaller cities, larger towns, or downright rural locations within the United States. Arkansas costs half as much to live in than Hawaii.

*relativly of course. They might still be 'poor' by 1st world standards, but they're no longer 'dirt poor'
** Services like telephones, internet, more frequent hair cuts, eating out, things like bigger, better constructed homes, vehicles, etc...

Re:Markets work yet again

[tbone1]

Soon it'll make more sense to outsource from expensive american cities to inexpensive smaller cities, larger towns, or downright rural locations within the United States. Arkansas costs half as much to live in than Hawaii.

It's happening now. I live in Indianapolis, and there are already three companies here who are getting on that trend. One thing they point out is that prices for land and housing are 1/2 to 1/3 of what they are in, say, Chicago, and that while wages here aren't THAT much lower, they are lower. The labor laws are also pretty much the same as elsewhere in the US, plus there are nice little junkets like Colts games, the Indy 500, etc. Indy isn't the only place seeing this, either.

Of course, over time, as wages adjust, ... but hey, that's just how the world is.

Re:Markets work yet again

[Afrosheen]

What's interesting to note here is that the Indian government played a big role in the quality of life expansion.

  Take a look at Mexico in contrast. 2 years ago, illegal immigrants sent around 12 billion dollars back home. This was more than twice the highest foreign investment in Mexico. Last year, they sent back an estimated 17 billion. This was the second highest income for the entire country of Mexico; mexican oil brought in the highest income, but not much higher.* Yet Mexico remains dirt poor, despite the huge influx of cash they're receiving from El Norte and their illegal migrant workers. Ultimately, Mexico's government is to blame for the consistent failure to raise standards of living.

  It really makes you wonder just how much damage corruption does to a floundering Third World nation. It also makes the point that throwing money at a problem won't even begin to solve it most of the time.

  *Paraphrasing Dilip Ratha, World Bank senior economist

Re:Markets work yet again

[Anonymous Coward]

India was colonized by England. They brought English to India. Most Americans speak English. This helps India. India also has a good education system, for those that can afford it. Most can't, but there are one billion+ people in India. If 10% of the population of India gets a formal education they already have more educated people than the ENTIRE population of Mexico. So, 100 million English speaking college graduates gives them a bit of an advantage over Mexico. On top of this, Mexico suffers from corruption, no doubt, and the bigger problem of a culture that puts very little emphasis on education. Both corruption and the mentality that education is not important are cultural issues.. not gov't inflicted..

So ya, money won't solve the problem of poverty in Mexico. Gov't "shake ups" won't either. Things won't change until Mexicans stop paying bribes and realize that their kids need to be capable of doing something useful in order to make a decent salary. People get paid big bucks to do things that produce even bigger bucks. If your child drops out at age 16, can barely read or write and has no other skill set, how are they ever going to make it big?

India to start losing jobs.

[gasmonso]

Now India will feel the pain as jobs are outsourced to Asia and Eastern Europe where rates are cheaper! Pretty soon, people in Zimbabwe will be coding :)

http://psychicfreaks.com/

Re:India to start losing jobs.

[Red Flayer]

Pretty soon, people in Zimbabwe will be coding :)

You write that as if it's a joke. Sub-Saharan Africa is a big emerging supplier of tech labor, in the position that India was 20 years ago. We're already seeing major efforts in Nigeria, don't think for a minute that much of the rest of Africa won't follow.

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).

Re:India to start losing jobs.

[easter1916]

Zimbabwe was quite a developed economy, until the glorious leader there went on a rampage of forced wealth redistribution and wrecked the economy. I understand that the supposed rationale was the righting of wrongs committed during colonial and post-colonial rule by the white "overclass", but the practical result of the half-assed way this was carried out (squatters, mob rule) meant that it was an utter disaster. I feel sorry for the average Zimbabwean, regardless of race or origin, because it isn't pretty for them right now.

Re:India to start losing jobs.

[squiggleslash]

I suspect all that's going to happen is that the move to India will slow, not stop. After all, if the so-called out-sourced jobs are removed from India, wages will drop, and it will become economic to move back, making use of the relatively skilled (I don't want to hear the insults, thank you. I've seen pretty bad code from all parts of the world, and consultants are by far the worst. It's not a country-thing, it's a "Do it by us or for us" thing) labour there.

This is a positive story. India's economy has clearly benefitted, and other countries are about to have their economies raised by the same process. Jobs in America have not gone noticably down (though wages have decreased in some areas.) Perhaps global trade will result in a massive decrease in global poverty in the long run, as its proponents have always argued, to much scepticism from left and right alike.

Re:India to start losing jobs.

[Billosaur]

You write that as if it's a joke. Sub-Saharan Africa is a big emerging supplier of tech labor, in the position that India was 20 years ago. We're already seeing major efforts in Nigeria, don't think for a minute that much of the rest of Africa won't follow.

It's already well underway; I get emails from nice people in Nigeria all the time offering to share their money with me. They must be working pretty hard coding all those emails!

Re:India to start losing jobs.

[bheer]

- 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.

And a government not run by a guy known for his misgovernance. Which pretty much rules Zimbabwe out.

Re:India to start losing jobs.

[line-bundle]

Pretty soon, people in Zimbabwe will be coding :)

You seem to have picked zimbabwe for no reason, but I do hope you realize that until fairly recently Zimbabwe was not third world (I lived there most of my live). When I was there there were linux clubs, mac clubs.

It has a lot of coders, but most have gone to South Africa and the UK as they are paid better wages. Heck, I am in the US (but not coding, thank goodness!).

Re:India to start losing jobs.

[nuzak]

The misgovernance just has to favor corporations, and more or less equally as a class (more of course if you grease the right palms). The US is still the land-o-plenty in that respect.

Re:India to start losing jobs.

[Fulcrum of Evil]

Not at all. Corporations should do what is in their best interests. If you, as a supplier of labor, are not mobile, that makes you less valuable to a company, and deservedly so.

So what, I'm supposed to move to Zimbabwe now?

Re:India to start losing jobs.

[pete6677]

Its kind of hard to get a corporation to invest a lot of money in a country where the government is not all that stable, revolution is a strong possibility, warlords rule the countryside, and people kill each other because they believe the person put a spell on them. This describes a large chunk of Africa. There may be cheap labor and eager workers, but until the basic issues are taken care of, a prosperous economy will still be years away.

Re:India to start losing jobs.

[corbettw]

It has a lot of coders, but most have gone to South Africa and the UK as they are paid better wages.

Not to mention, they're less likely to be, you know, murdered or raped (or both) by Mugabe's thugs.

The biggest impediment to Africa being the next India are the African warlords who keep the continent stuck in the 13th century.

Re:India to start losing jobs.

[bunions]

However, there IS corruption in the US government.

Sure. I'd never say there wasn't. You simply can't find a government free of corruption. But the guy I replied to made it sound like the US was the A-number-one place to come to if you want a smooth ride for your company, when it in fact is not. Environmental and safety regulations here may not be as strong as Europe, but it orders of magnitude stronger than (almost) anywhere in Asia, Africa or South America, and I only say 'almost' to avoid places like Japan and Singapore.

Re:India to start losing jobs.

[Urusai]

Even more depressing, South Africa, after a relatively smooth transition from apartheid, is slowly devolving into the same kind of typically stupid/corrupt sub-Saharan political incompetence, with ANC one-party rule and a stupid AIDS-denying, Mugabe-kissup (Mbeki) on the throne.

Most likely reason

[roman_mir]

The most likely reason that comes into my mind is a power struggle of some sort between management of that company. I bet someone was sold on an idea that moving jobs to India would cut costs, but then someone else was in the opposite camp and we just saw the result of that battle. Was any manager fired from the company within the past month?

Re:Most likely reason

[Shadowlore]

I bet someone was sold on an idea that moving jobs to India...

How about a slight change in punctuation ...
"I bet someone was sold on an idea that moving Jobs to India..."

Reality Check for the Cult of Apple (tm)

[i_want_you_to_throw_]

Apple is a publicly traded company and as such here's what's important to them.....

Making money for their stockholders.

That means sweatshops for iPods and doing things like heading down the dangerous path of closing off the Darwin source for development so that OSS geeks can't find a way to make OS X work on commodity boxes.

Apple is going to do what is best in their corporate interest. Surprised? Don't be. It's business

Re:Reality Check for the Cult of Apple (tm)

[aussie_a]

Don't be. It's business

Doesn't have to be. Stand up and support companies that share and uphold your ideals and beliefs by giving them your money.

Or you can go for the cheapest company and help them screw over your fellow man.

Re:Reality Check for the Cult of Apple (tm)

[HardCase]

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-

Re:Reality Check for the Cult of Apple (tm)

[anakuran]

Apple='cheap';
//error. does not compute.

Re:Reality Check for the Cult of Apple (tm)

[Pink Tinkletini]

It doesn't always work like that. Where I live, for example, Wal-Mart is currently prohibited from entering the market, precisely because they have a history of destroying communities and fucking people by way of its uncaring management and legendary bad taste. Whether you agree with the city planning commission or not (and I do) this is real money Wal-Mart is losing because they chose to be "evil." Even if the city let Wal-Mart in, it's far from clear they'd be as profitable here as they are in red states, simply because they have such a terrible reputation that nobody would be caught dead shopping there.

Point? Being good can pay off. There are incentives for companies to behave responsibly. Often these can outweigh the benefits of being evil. Probably not in the case of Wal-Mart--hey, who cares about New York, anyway?--but certainly for companies like Body Shop, whose entire corporate image is built on socially responsible behavior.

Re:or maybe apple sucks

[Anonymous Coward]

I thought the hippies were all about india, them being "like all about peace and love and like totally in touch with the universe man".

I mean, Ravi Shankar taught the Beatles to be smelly no-good useless non-contributing waste byproducts of society.

Not that this should be a shock or anything...

[GundamFan]

Am I the only one who sees this as utterly fascinating?

In a way US corporation going to India stimulated this growth. It is interesting to me that India has changed because of outside investment but the way they have changed has made them less appealing to those same investors.

Globalization is bitch, isn't it?

Re:Not that this should be a shock or anything...

[Cleon]

Hey, that's capitalism. I don't know why anyone finds this mystifying; in search of a cheaper labor pool, a bunch of Western companies invested a bunch of money in a developing country. So much so that the "developing country" has developed so far that investing there just isn't the payoff it used to be. So now they're either going to look for another developing country to invest in, or decide that shifting their labor pool from country to country isn't the long-term investment benefit they thought it was going to be.

Re:Not that this should be a shock or anything...

[aussersterne]

Capital can afford to move. Hell, it saves money each time it moves. Labor can't afford to move. It costs labor money when it moves. That's globalization for you. Capital increases and is free (as in freedom). Labor competes against other labor and is unfree (as in unfreedom).

Re:Not that this should be a shock or anything...

[4D6963]

Am I the only one who sees this as utterly fascinating?

The fascinating part about this is how by exploiting these people (Indians and Chinese, but also Poles or even to take older examples the Irish) we make them rich and reduce the differences between them and us. Shockingly enough, all that bad, shameful economy (can you remember of some "concious" person telling you not to buy Nike shoes because they were made in Chinese sweatshops?) did great good to them, in the middle to long term.

In other words, let us exploit you, it's for your own good :-)

Re:Not that this should be a shock or anything...

[starm_]

It goes to show that the markets _can_ moderate themselves and that outsourcing isn't necessarily bad in itself. It can help countries get out of poverty.

IMO outsourcing only becomes immoral and akin to slavery when the jobs go to people who are kept poor by their government and we exploit this situation. When giving our business and jobs to those countries, we become in a way accomplices with the crooked governments. However, when we outsource to democracies like India that have, in spite of some problems of corruption, a government that acts on behalf of its people, it can lead to beneficial results for everyone.

Re:Not that this should be a shock or anything...

[cowscows]

It can be useful to remember that the US had its share of horrid working conditions back when the industrial economy was getting going. Exploiting labor is not some new occurance brought upon by globalization. It's just a normal step on the ladder to economic growth.

Not to say that it's all good. No billion dollar corporations should be making people work in unsafe conditions, regardless of what country they're in. But saying that a company is evil because they're having their good manufactured by people working for 60 cents an hour is a little short sighted if you aren't aware of the circumstances. There are places where 60 cents an hour is a decent wage, otherwise those jobs wouldn't be filled.

The other argument is that since globalization is driving a lot of this outsourcing, that the profit produced ends up leaving the country of all the workers, where in the industrial age, it tended to stay local, because the factories were owned by local rich people instead of multinational corporations. That might be true to a degree, but the losses to that are likely outweighed by the sheer scale of manufacturing that goes on nowadays.

So yeah, in the long term, it'll probably leave the world in a better place than it was before.

Re:Not that this should be a shock or anything...

[jcr]

It can be useful to remember that the US had its share of horrid working conditions back when the industrial economy was getting going.

Indeed. Working in a factory in those days was nearly as bad as staying home on the farm.

-jcr

Re:Not that this should be a shock or anything...

[mclaincausey]

Capitalism by definition doesn't have to have a completely unregulated marketplace. "That's capitalism" is an ampty platitude. What "that" is is a particular way of practicing capitalism that is unfair.

In the past, Presidents like Teddy Roosevelt tried to place check on corporations in order to protect our economy. Nowadays, we are seeking to tear down all these successful restrictions.

There a difference between free trade and fair trade. Exploiting economic imbalance to screw your own country's laborers is free trade, but it is not fair trade. If someone wants to outsource to the Third World, fine--but that decision should come with a tariff that makes it at least competitive to hiring workers in your own country. Otherwise, you wind up outsourcing your wealth and standard of living.

Some might say that that's a great thing to do, but I think it is each country's duty to protect its own workers. That's what we pay taxes for.

Re:Not that this should be a shock or anything...

[Mr_Icon]

Well, it's a lot less clear-cut than that -- not all exploitation leads to better living conditions in the future, as you may destroy all social and/or ecological infrastructure in the region. This happens more often than you think -- we just rarely hear about this, since everyone who can end up leaving the place, and those who can't just, well, die off, and nobody ever hears about destroyed villages or poisoned valleys where nobody can ever live again for 20 years.

However, you are right about one thing -- "don't buy these shoes because they were made in sweat shops for 2 cents a day" rhetoric is often counter-productive, or at least counter-intuitive to many people. If someone voluntarily agrees to work 16 hours a day in a sweat shop making shoes for shitty pay, it's because their prospects otherwise would have been much worse. In the mind of a Westerner, if it wasn't for the mean and nasty Nike forcing the teens to stay in the sweltering building gluing shoes together, they would be running around frolicking in the sun, or hanging out with their friends playing Nintendo. Of course, the reality is that if these kids weren't there, they'd be probably scouring the nearest malaria-infested dump for food morsels, prostituting themselves to tourists, or doing whatever else they must do to just plain survive, all while also figuring out how to take care of their 5 younger siblings.

The reprehensible thing here is that big corporations are taking advantage of these people's conditions to maximize profits, but you would hardly be improving the situation if you forced them to shut down their business and leave altogether.

In much of this world, you really have to think in terms of "what is the lesser evil." Sometimes big corps are the biggest evil, sometimes they are almost charitable in comparison.

Why? Bad customer service I bet

[Anonymous Coward]

Is it only me that gets frustrated when my calls are piped over to India? I'm all for globalisation and outsourcing but when basic customer service suffers it serves only to frustrate customers, or me at least.
I've lost count of the number of times I've literal just given up and hung up while trying to do simple tasks over the phone like notify change of address or query a bill.
The 3 companies I've had particular problems with are Amex, Dell and Apple.

India not so cheap?

[Anonymous Coward]

Well looks like work is finally going to be coming back to the UK

I never understood moving stuff like phone centres and manufacturing away from the customer-base.
Sure the labour might be cheaper and all (offsetting transportation of the goods ) but you end up taking out of your control aspects that keeping it in-house provided.

After the batch of Indian call-centre workers stealing UK account details and selling them I am glad such centres are comming back home

I can vouch

[cimmer]

"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.

Today in the news

[alexandreracine]

"They just don't have any style." -Steeve Jobs

Re:or maybe apple sucks

[mpathetiq]

Not Apple Records, silly!

Time Magazine cover story

[GillBates0]

For those who haven't seen it yet, Time Magazine's cover story for this month's issue is titled: "http://www.time.com/time/magazine/article/0,9171, 1205374,00.html">India Inc. and carries quite an in-depth (IMHO) opinion of "The rise of India".

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.

makes sense

[William Robinson]

There was an article on slashdot few days back, which claimed that 'Apple's iPods are made in China by women who work 15 hours/day, make $50/month, and have to pay half of that right back to the company for housing and food.' probably the reason they pulled out of India.

India is becoming expensive in some parts like Bangalore. But Pune, Hyderabad, Delhi, Trivendrum are not that expensive.

I still feel, it is not a good decision, looking at huge market (over 1 billion people) of India.

A little premature to call it the right move

[planetmn]

From the article:

Yet he is also a tough-minded executive who knows when to cut and run. That's why Apple Computer Inc. has shelved plans to build a sprawling technical support center in Bangalore, even as IBM (IBM ) and other tech powers are ramping up.

Doesn't the part of knowing when to cut and run imply that it was the right decision? The way I've always looked at outsourcing as an engineer is that you want to have people of varying backgrounds in any large organization. I think that India and China are part of this along with the US and others. Other countries will come into the fold as well, but I think that it'll be for the better of the company to have multiple groups with different backgrounds and experiences.

Now, it sounded like this venture was purely for help desk, which I think is being performed at a commodity level nowadays (in the sense that all service seems to suck, given that good service costs money). In that case, moving to wherever it is cheapest is probably a good move. Though maybe they'll just add to the number of workers woring 15-hour days in China.

-dave

D'OH!!! No wonder

[stratjakt]

Homer taught all the Indians about paid vacations and golden parachutes and casual fridays and health plans, just a couple of weeks ago.

Actually, that episode was good social commentary... It's basically what's happening. The Indian labour force is developing the sense of entitlement so near and dear to our hearts.

Gotta wonder if the submittor

[garylian]

I gotta wonder if the person who submitted this article worked as a translator for Zero Wing...

"All your base are belong to us."

"India has grown at a much rapid rate."

Yeah, seems like the same guy...

What we're seeing.

[Churla]

What we are at this point seeing are the first steps in a cycle of balance.

India has been in a horrible financial condition. It's got large amounts of debt and it's trying to work it's way out of them. This comes with financial assistance from the international community. You have many of these poorer nations not able to afford the subsidies anymore for farmers , which means more people migrating to the cities for the promises of these fantastic tech jobs.

Problem is the cities aren't ready to handle all these people, and the government isn't ready to handle all this displaced workforce. Result? SLUM TOWN!

Uh Oh, now the international community is on nations to provide a base level of support for their people. They don't want sweat shops and shanty towns of workers paid pennies on the dollar of what others get. India has to rely for a good deal on it's own people to solve this problem for themselves because they don't have the money to. If they want to they have to start taxing these companies more, which means.... costs go up. On an individual level? How to get out of the slum, you have to get paid more so you can afford to live there, you demand more pay.. they demand more for your contracting.. Costs rise...

Suddenly all those cost benefits from outsourcing start evaporating.

From my personal perspective.. yay. This is far more effective a way to "keep jobs here" than trying to legislate some mandate for companies to do so. In this case, the "free market economy" is actually doing it's job.

Re:What we're seeing.

[bheer]

> (those penguins will work cheap )

I'm Free, never cheap.

--Tux.

Expected

[thePig]

This economic phenomenon is expected and was already discussed in this fora.
As the demand for the work increases, to get the best in the business, one has to pay more.
Also, the overall economic indicator increases along with it comes higher land rates + higher standard of living.
This makes it much more costly for the average person too, which means the average pay increases quite a bit.

Along with it comes the fast growth of the other economic indicators - more people get more vehicles etc.
These things will start congesting the infrastructure, which also would act as a deterrent for new companies.

Now the option is to go to not so fancied (earlier) sites in India (or any outsourcing nation), so that you get everything cheap.
Since they saw the growth of fancied sites, they also would have improved the basic infrastrcuture to make it close to them.. without the current issues. But I guess Apple execs were lazy enough to not look at the new sites and stayed with the fancied ones. -- Yep, they had to pay for that.

I guess China skipped these issues by using far-sighted (and possibly evil) government policies - ex - they forcibly decreased the standard of living in many areas - which meant you get more people coming to urban centers - which means the demand and supply chain stays the same.
Also they improved the infrastructure by pouring in money for the same + they started builiding up a lot of suburbs to decrease the rising land-rates.

where's the editor?

[Chalex]

What's a "reason being"?

"India has grown at a much rapid rate"? As opposed to "much slow rate"?

It grew 9.3%? As in, the land area expanded?

Re:where's the editor?

[enitime]

"It grew 9.3%? As in, the land area expanded?"

Don't be stupid, that's so ludicrous it's not even funny

Clearly the ocean receded.

Re:where's the editor?

[Doctor Memory]

Obviously, Slashdot is outsourcing its editor jobs...

"Slashdot. News is for the nerds. Stuff that is the matter."

Next Outsourcing Destination: China

[darth_borehd]

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.

Re:Next Outsourcing Destination: China

[bsartist]

Chinese speak Chinese. This is a big problem.

China is the largest country in the world right now, in terms of population. So is the lack of a common language their problem - or ours?

Re:Next Outsourcing Destination: China

[Pink Tinkletini]

Er, not quite. India is about 15–20 years behind China, as far as the state of economic development goes, and this includes outsourcing from the West. The reason you think China is trailing India is that India's boom coincided with the IT bubble in the States, whereas China's has been ongoing for two decades longer; India's development was therefore much more visible to you in your particular (I'm assuming IT-related) industry.

Re:Next Outsourcing Destination: China

[Sdoh]

> So is the lack of a common language their problem - or ours?

It depends on who is paying. :)

Re:Next Outsourcing Destination: China

[808140]

Mandarin vs. Cantonese is a non issue. The only people who are able to speak Cantonese and not Mandarin are in Hong Kong (and that number is decreasing rapidly, as the importance of trade with the mainland increases) or in various isolated communities in other countries (which often speak relatively non-standard dialects of Cantonese at home, and some other more common language on the street -- for example, Toishanese in SF Chinatown.)

There are many speakers of Cantonese, of course -- it's one of the major sintic languages -- but on the mainland it has fangyan status and is not taught in school, and with the exception of media coming out of HK (movies, music, etc) it basically gets no official exposure.

I have been told that in small villages in the south it is not uncommon to find schools taught in the local language, due to a lack of qualified teachers who both speak proper Mandarin and are willing to lead the life of a village teacher. The government takes the pragmatic approach in this case and considers education in a non-official language to be better than no education at all. But the books, teaching materials, dictionaries, and so on, all use pinyin to show the pronunciation of a character, which is based on the pronunciation of the dialect spoken in Beijing -- so children are exposed from an early age to how a character should be pronounced even if they themselves (and their teacher) is not able to faithfully represent the required sounds in the "official" way.

When you add radio, television, film, and all other forms of media to the mix -- all of these are in Mandarin, as noted, with the exception of some HK stuff that finds its way into mainly Guangdong province -- it should be no surprise that children are speaking Mandarin better than their parents (for example, in Shanghai, it is not uncommon to find young children who cannot speak Shanghainese well at all -- and if they can, they are generally only heard speaking it to their parents, prefering to use Mandarin to talk to friends, as it is the language enforced at school.)

Whether all of this is right or not is up for discussion, but it is important to realize that with the introduction of standardized education, television, and radio, national languages can replace local ones very quickly. For example, at the end of WW2, most French people still either did not speak French at home or spoke some wacky dialect that was only vaguely mutually intelligible with the "official" dialect of Paris and Tours. My great grandmother could not speak French well -- in Picardie they all spoke Chti, which I can sort of understand but most certainly cannot speak. Similarly, throughout the south people spoke not French but Occitan, a language that is now nearly dead (although a dialect of it lives on in Spain as Catalan, where it has official language status). In Bretagne they spoke Breton, which is actually mutually intelligible with Welsh, and well examples of this sort abound. Nowadays many of these local languages are either extinct or very near it.

In the old days in Northern Germany vast swaths of people spoke Plattdeutsch (ik snakk platt!) which was at one point so important a language that many of the "German" loan-words in Swedish are in fact Plattdeutsch in origin (if you speak German and have ever been in a Dorf where old people snakk platt, you'll know what I mean when I say that understanding Platt is a bit like understanding Dutch -- not much. At all.) Nowadays most people speak Hochdeutsch.

I mean, literally every country has examples like this.

The local languages in China are unfortunately doomed to extinction in the same way that most of Europe's languages have died in the last century.

Cantonese may be an exception, because of its status as an official language in Hong Kong, but even there nowadays everyone is learning Mandarin.

Mandarin is prettier anyway, but rather harder to pronounce properly.

elsewhere IBM is coined as Indian Business Machine

[cpatil]

With IBM CEO announcing $6 Billion for expansion in India, which also included setting up worldclass IBM Research centers, I think it was a bad move by Apple. IBM CEO & executives are much more experienced and powerful in the corporate world than Apple executives are. When Bach's player hits the road, Jobs will be forced to move Cupertino to Bangalore or he will move to Benaras ;-)

Just Pay it Forward to Employees & Companies

[mfh]

They keep bouncing from outfit to outfit, getting salary bumps with each move.
You can blame HR for this. HR needs to weed out people who have made these kinds of moves too much in favour of people with long term business relationships with their employers. Testing a person's loyalty is HUGE for HR and they do typically drop the ball on it more than they keep the ball in play.

But blame the economy too. Companies have treated employees so poorly in the past, on almost every level, that there has to be some accountability for that. Every action triggers and equal and opposite reaction.

Treat them nicely and they treat YOU nicely. Treat them poorly for long enough and they will treat every other company categorically as poorly as they have been treated. This permanence of occupational conditioning is dark and moody at the core. It embellishes and derives its source from a much larger problem of economic scale.

People don't care enough about their fellow person, anymore. But the change has to start small and spread without being extinguished, like Pay it Forward.

What is it with the submissions today?

[Anonymous Coward]

First the number formatting and now this:

Why Apple Backed out from India? [redundant question mark]

rmunaval writes "BusinessWeek reports [reports??] an interesting article on why Apple might have backed out from India. The prime reason being, [redundant comma] India has grown at a much rapid rate than expected and is no longer the [better - 'a'] cheap destination for the [redundant] companies. It grew at an astonishing rate of 9.3% last quarter."

Incidentally the anyone with the slightest degree of familiarity with Indian English will recognize the syntax, which means the submission is from a particularly clueless Indian or a troll seeking to rouse Slashdot's never-starved Grammar Nazis.

why our editors need to go back to college

[ltwally]

"...India has grown at a much rapid rate..."

How does such pathetically poor grammar routinely make it to the front page? Having technological skills is a wonderful thing for a tech site's editors, but I think /. has forgotten that editors also need to have a solid working understanding of proper grammar and sentence structure. How the hell does anyone justify hiring these people as editors?

Re:why our editors need to go back to college

[stratjakt]

The editors don't actually "edit" and never have.

Users submit articles, they sit back and click "submit" about twelve times a day, and watch fansubbed Sailor Moon episodes that they painstakenly re-encoded into .ogm files.

Back in the day, it didn't matter so much. Now it's getting ridiculous, with retarded newbie typo's like "teh" making the front page.

I forgot about slashdot for about a year, came back just the other day. It seems the user base (based on posting on articles) is about half of what it was a year ago, and hell, a year ago it was only a shadow of it's former self. It seems that only the most self-righteous of the OSS flamers are left. Technically adept users seem to be slim to none, as I'm seeing hardly any intelligent comments being left on any of the recent technical articles.

To borrow a South Park qoute, non-gnome related, this site is literally dissapearing up it's own asshole.

And before you ask, I'm here because it's fun to watch and be labelled a troll for not toeing the line and bowing down before the great Rickie Stallman.

Re:Just Pay it Forward to Employees & Companie

[Maxo-Texas]

Even if my company treats me like a god, I'm going to leave for a 25% pay increase.

The rat race to the bottom

[jandrese]

This should have been obvious to everybody, but what happens of course is that as companies hire their workers in what are essentally third world countries and pour money into the local economy in the form of foreign capital, the local economy picks up and suddenly the price of labor in the market increases. This makes the whole outsourcing thing a bit of a rat race as everytime you find some suitable location with cheap labor and build your factory/office there, the cost of labor begins to rise until it's hardly worth the trouble of outsoucing in the first place. Then you have to look for a new place with a new supply of cheap labor to start the process all over again.

The only way to prevent this from happening is to move into countries with brutal kleptocracies that will insure that the wages you pay never stimulate the local economy too much and the strong armed government thugs keep the people from setting up any sort of fair or equitable government. Your best bet is for those countries where two ethnic minorities have been fighting for centuries over some long lost or stupid reason. The downside is that it's very hard to find suitable working conditions in those type of countries because you generally have a big security problem and basic services like power and phone can be hard to come by (and unreliable). Also, you'll have to bribe government officials like crazy to avoid having your business raided, however in the long run it'll be cheaper than paying a decent wage to the workers. If you're really commited, you can surreptitiously fund one side of the conflict and give them enough of an upper hand to overthrow whatever government the country currently has and set up your own puppet government in its place. The only problem with this is that the puppets often try to sever ties with you once they get what they want (cheap slave labor and a country to call their own).

Re:The rat race to the bottom

[jcr]

The only way to prevent this from happening is to move into countries with brutal kleptocracies that will insure that the wages you pay never stimulate the local economy too much and the strong armed government thugs keep the people from setting up any sort of fair or equitable government.

Interesting theory, but the worst of the kleptocracies tend to have a hell of a time attracting any foreign capital or orders (Zimbabwe, Burma).

The important figure isn't the wage, it's the productivity. You might be able to hire someone for ten cents a day in some countries, but they're not going to be able to build as many computers in a shift as workers in India, China, or Indonesia.

-jcr

Bad fit for Apple

[wchin]

First, the BW article speculates... the author doesn't really know. So was it high wages? Was it something else? "We" don't know yet.

However, there are several issues with setting up in India that probably make it less attractive for Apple.

1) Worker loyalty: while all tech workers probably seem like mercenaries these days, it is even more so in India's white hot tech areas. The workers will leave for what we, in the U.S., would consider miniscule salary differences.
2) Worker training: Indian workers are often broad brush trained in "popular" technologies - finding software engineers trained in non-Windows, non-Oracle, non-SAP, or non-J2EE tech is probably much harder to find at a cost effective salary. Again, this is an issue in the U.S. too, but more pronounced in India and many other non-U.S. technology boom areas.
3) Best of the best: Apple is small (workforce numbers) and tends to follow the hire the best of the best (even if they don't give them the best of the best resources to work with). Those that are really good are probably already working in the U.S., or would not find it all that hard to make it into the U.S. The number left of the best of the best in India probably aren't much cheaper these days (one would often have to be 4:1 to 8:1 cheaper to outweigh the below).
4) Big costs (not just money): Apple doesn't have huge projects that require a thousand or thousands of engineers on a single project that might be able to amortize the costs/issues of temporal and geographical displacement. Apple has most of its software engineering done in Cupertino, and it would take a big shift to deal with significant outsourcing or remote development.
5) Core strength: software engineering is Apple's bread and butter, it is what differentiates the hardware, it is its own profit center. Messing with this too much is not a good idea. Apple can't treat this as a commodity item on a balance sheet.
6) Expansion deals went through in CA: Apple bought a large data center and has plans to build another campus in CA - and the review of those deals going through probably meant that this Indian effort doesn't make sense for Apple right now.

None of this particularly means anything with respect to India, India's tech boom, IBM in India, outsourcing to India, etc. This is merely Apple's evaluation on whether or not it makes sense for Apple. These issues have been there, will continue to be there. It is strange that Apple started and effort but then pulled out, but that is better that they are contantly critically re-evaluating rather than what we've seen from some other U.S. companies that have staked huge efforts on "hot trends" that some CIO/CFO/CEO reads in a trade mag, rather than doing true critical analysis. Going to India may make sense for lots of companies, but certainly not to the level we've seen it lately.

Re:Bad fit for Apple

[wheatking]

"miniscule" when converted to dollars maybe (and not usually) -- Companies are paying 15 to 30% increases over their previous pay plus some additional perks (Indian tax laws exempt most perks from income tax -- e.g. Car Allowance etc) for engineers/tech-support types to switch. while 25% of $20,000 p.a. may not strike you as something other than miniscule, it is 25% over the previous and it matters. btw, the word on the street in bangalore is that Apple did indeed pull out because of cost related issues. At 15% average y-o-y increase in employee compensation (total) and office rents and house costs equal to silicon valley (in per sq ft), Bangalore just isn't that cheap anymore and the quality is definitely questionable. i think, based on personal experience talking to entrepreneurs there that there is approx 1 clueful engineer for every 100 or so in the big companies there.

Re:Bad fit for Apple

[sufijazz]

Indian tax laws DO NOT exempt special allowances and perks. While this was a practice 5 years ago, the taxmen have wizened up and tax EVERYTHING that constitutes the magic number that gets deposited to your bank account every month. (Yes, salaries in India are paid once a month.)

U.S. Unions are the problem and the answer

[Toe, The]

At one time, unions were sorely needed in the U.S. Workers had no rights and were thoroughly abused by rampant capitalists. The unions did a good thing there.

Then the unions kept going, demanding more and more. Now in some cases, the work doesn't get done at all because the union guys are too busy taking breaks, waiting for wacky regulations to be met, demanding pay raises, waiting for a seventh guy to show up before they can move a chair... all that unbelievably abusive stuff that unions do now.

So while laborers in third world countries suffer under miserable conditions, American unions keep fighting for higher wages and, well... less work. Is it any wonder American jobs are flying out of the country?

If anyone is interested in a solution to this seemingly intractable problem, there is one and only one: for American Unions to stop fighting for ridiculous benefits in the states and instead to focus ALL of their attention on third world countries.

If Americans stopped getting lazier and if third world workers started getting some equity... presto... these enormous disparities between our workers would start to diminish.

Re:U.S. Unions are the problem and the answer

[Toe, The]

Unions are losing ALL their members... because all of the jobs their members do are being exported. What good is a union that protects zero workers?

It is in the interest of every union member to see better labor standards throughout the world. Until unions realize this simple truth, they are doomed to driving themselves out of work.

Re:U.S. Unions are the problem and the answer

[squiggleslash]

Too true. If it wasn't for the activities of the various unions of computer programmers, including the infamous Federated Union of Computer programmers and Keyboardmen, and the Association of System Specialists, programming jobs wouldn't be being outsourced to India all the time. If only computer programmers were, as a group, more anti-union, and didn't keep joining trade unions at the drop of a hat, maybe some of these jobs would stay in America.

Re:U.S. Unions are the problem and the answer

[Toe, The]

Funny... but the Apple facility in question is a tech support center, not a programming house. Phone tech support is a service job, and there are indeed plenty of American unions covering such jobs.

But my point was that American unions have set a general standard for American workers, not just for their specific market segments. As long as Americans think we are the greatest people in the world and deserve twenty times the pay of other people... we shouldn't be surprised when employers decide that a little less quality is worth a 90% cost savings. It is our own arrogance which got us here, and only a little humility will get us out.

Re:or maybe apple sucks

[mpathetiq]

I'm sure in some way, Paul McCartney is making money... I mean, aren't most songs just Beatles ripoffs anyway? I'm sure he's getting royalties... at least for every Oasis song sold.

"Knows when to cut and run"

[dpbsmith]

The article describes Jobs as "a tough-minded executive who knows when to cut and run."

What? Cutting and running is always the wrong thing to do, in all situations, under all circumstances. It is always a craven act of cowardice. Nervous-Nellyism.

A quitter never wins, and a winner never quits.

When the going gets tough, the tough get going.

Stay the course. Never give up the ship! Now matter how deep you are in the Big Muddy, the right decision is always to push on. Where would the lemmings be if they had turned back? What if Custer had chosen to retreat?

Doesn't Jobs remember the Think Different posters with the pictures of Icarus, Captain Ahab, and the Earl of Cardigan?

Re:or maybe apple sucks

[Fulcrum of Evil]

I mean, aren't most songs just Beatles ripoffs anyway?

Why yes, 'Master of Puppets' is obviously derived from 'Lucy in the Sky with Diamonds.' I'm not sure about 'Jesus built my Hotrod', though.

Re:or maybe apple sucks

['nother poster]

You know, there are easier ways to commit suicide than taunting Liam Gallagher in an online forum.

Re:Just Pay it Forward to Employees & Companie

[bettlebrox]

I don't think it's necessarily HR's fault. How you get people to be loyal to a company who is only in the country looking for cheap staff? You know many companies will leave for the next cheap place that the big analyists will start recommending.

And to can compare what is happending in Indai to the "Dot Com" era in the US. Lot's of people entered the tech market for the money, many jumped jobs every 6 months for better paid jobs. If you were in anyway good technically you could command a premium wage. Sounds famaliar? (Then the arse fell out of the market).

Indian developers in India are basically doing the same thing, they're taking advantage of a tight labour pool. And the really good developers/techies in India are getting good wages and aren't likey to jump ship to some "new" US (or European) company looking for low-cost India programmers.

For example I know of a manager who was told to hire the 3 new employees in India. He was was there for 2 weeks, settled on 3 lads and on the start date only one showed up. I'm sure the other 2 got better jobs based on the job they had in hand, or got headhunted.

I've been saying to others that at the moment I suspect that any company trying to start an India technical operation at the moment will have a hard time of it because all the good technical people already have good paying jobs and the only people they'll be likely to recruit will be medicore. Unless they pay good wages, and lead to an expectation of a long-term job.

I think at the moment if a company wants good staff for less money they may do better looking at locations inside the US such as Salt Lake City and other mid-Western states.

Re:or maybe apple sucks

[mpathetiq]

Liam only browses Slashdot at +5. My comments will go unnoticed.

That premise is just ridiculous. Liam Gallagher reading Slashdot? Noel maybe...

why our readers need to go back to college

[Nimey]

painstakenly

Painstakingly.

typo's

Typos.

I forgot about slashdot for about a year, came back just the other day.

Insert "and" just before "came".

I'm seeing hardly any intelligent comments

Indeed.

dissapearing up it's own asshole.

1) That's disappearing.

2) It-apostrophe-s is a contraction for "it is". "Its", on the other hand, is possessive. Counterintuitive, but that's English for you.

So to recap, you should have written "disappearing up its own asshole.". Have a nice day.

living wage?

[Kohath]

How much is a living wage? Is it different if I'm single and live with 3 roommates? How about if I have 12 children (6 with "special needs")?

Should I expect to have to provide my employer with more work (or more valuable work) for the higher "living wage" I need for my family situation?

Because I thought I was supposed to get a "working wage" -- based on the value of my work.

Re:Why? Bad customer service I bet

[rpjs]

The UK's second largest electricity distribution company, PowerGen, has just announced that it's closing its Indian call-centres and bring the jobs back to the UK due to poor customer service issues.

Kleptocractys have very poor growth numbers.

[HornWumpus]

Look at Zimbabwee, it's pitifull. Does'nt have enough trained technical staff to draw anybody.

Your arguement does'nt work. Supply one counterexample.

Even in the case of unskilled labor the worst kleptocracys are not drawing much investment (investment is pulled out as fast a feasable). Look at what happens when they steal the foreign investment via nationalizations. (typically they lose the industry just nationalized due to lack of capital to keep it running.)

Preemptive counterarguement: No the USA is not a kleptocracy. Most built in thievery in the 'first' word is via taxation and payout to the choosen (e.g. in the USA Haliburton, the NEA, government employees). As our taxes are lower and 'couch sitting, check cashing' classes less entrenched the USA has most of europe beat on this test (the exception being Ireland, the low tax, rapid growth center of europe).

And yet they're still stuck with the caste system

[bunions]

Honestly, people give China all kinds of shit (rightfully so) for human rights violations, but no one raises a peep about the Indian caste system.

Re: Western Hypocrisy

[Dystopian Rebel]

If China respected foreign investors' money sufficiently, we wouldn't be censuring China either.

India is the "largest democracy in the world" but if there is social justice there, then I'm CowboyNeal and I have a date tonight.

Capitalism wants cheap labour and Western Politics is the art of smooth-talking mostly ignorant NIMBY voters. Western leaders don't have the guts to stand for and live by principles and the truth is that most of the people in the West don't have the guts either.

Look to Pakistan

[bacterial_pus]

Their IT industry is in it's infancy, labor is cheap and it's producing some quality engineers. Not to mention infrastructure in big urban cities is almost the same as India's

Re:And yet they're still stuck with the caste syst

[nick1000]

Just shows, how lack of proper details about a situation can manifest itself into prejudice. Caste system in India is a non-entity in the way it used to be. The reserved castes (earlier called lower castes) now get active affirmative with as much as 70% of some colleges purely earmarked for them. Publicly distinguishing people based on caste can get you to jail
The caste system does not violate human rights, and commenting on an issue without understanding it just makes people look asinine.

Re:And yet they're still stuck with the caste syst

[bunions]

the cover story of the Nat'l Geographic last year sometime disagreed with your assessment, detailing litanies of abuse from the burning of the house of an untouchable who drank from the wrong tap to throwing acid in the face of another for some social tresspass. Unfortunately, the whole article is unavailable online, but here's the teaser: http://magma.nationalgeographic.com/ngm/0306/featu re1/

Re:Never been a fanboy of outsourcing, but...

[wchin]

It surprises you that money is the overriding concern? It is most likely that Apple is putting those jobs in Cupertino, CA, and the remark about efficiency is exactly that. Apple may find it more efficient to have the software engineers in Cupertino and the cost savings of going to India isn't worth it. If it is worth it, then by all means Apple should be there. Apple has outsourced much of its hardware manufacturing - it made sense to do so. Apple's management has a duty to its shareholders first and foremost... everything else is and should be a secondary concern.

Further, this isn't about outsourcing the software side - this is about Apple setting up another in-house development site. The arguments pro/con outsourcing is mostly irrelevant here. The discussion here also wasn't about the call support centers of which Apple runs a bunch from a variety of countries.

Re:Why? Bad customer service I bet

[PaneerParantha]

and clueless techs who have no idea what celcius is

That would be surprising. In India the temperatures are given in celsius and if a tech doesn't know what it is, I would wonder if they are from India.

As to your example:

And of course, the USA's finest... *drumroll* being told that component cables would not increase the quality of picture on my PSX games

Here is a similar example experienced in USA. I once went to the Radio Shack store in International Mall in Miami, FL and asked for a wireless keyboard. The salesman laughed at me in his loud voice for all the customers to hear and said that there was no such thing as a wireless keyboard.

Clueless people exist everywhere.

tech leapfrog

[zogger]

In a lot of the developing world, they are skipping conventional and expensive and now old-fashioned ast century tech infrastructure roll-out and going to the next generation tech, decentralised (and alternative energy, solar, etc) electric power and wireless networks instead of fixed wires. Here is an article on what India is doing to bring electricity to the 1/2 billion people that don't have it yet.

http://www.dawn.com/2006/06/14/int6.htm

And just because apple puled out doesn't mean any number of other tech giants aren't going in. Intel, IBM, MS, HP etc, etc are all dropping serious folding cash into India right now. Apple is one of the few that *aren't*. Apple has pulled some lame biz decisions in the past, this is probably one of them, IMO.

Re:tech leapfrog

[arivanov]

As far as generation the "hug the trees alternative energy" stuff is very nice for villages with minimal consumption in the middle of nowhere.

It is not suitable for the real stuff. All big outsourcing shops in India are forced to have UPS capacity sufficient to handle all of their computer systems including desktops and not just portions of the datacenter like in the US or Europe. This amounts to be a parallel power grid. In most cases this hits the worst sour spot of power generation - mid-size from cold. That is phenomenally ineffective and costs a fortune, but they have no choice. All those hired hands have to keep on typing.

As far as wireless networks are concerned they are once again utterly irrelevant to the outsourcing cost.

The problem with outsourcing cost is network capacity into India which is oversubscribed and is only getting worse by the day. There is no way to alleviate this with "next gen wireless". The only thing to help here is new fiber around the gulf which noone is even thinking about putting in the ocean floor now.

Re:or maybe apple sucks

[Arker]

And I bet you thought you were joking.

Race to the bottom

[microbox]

In other words, let us exploit you, it's for your own good :-)>,

This encourages governments to be efficient, but also creates a race to the bottom on standards. "Exploitation" is more complex than good/bad. Wealth is more than money. A lot of the "wealth" from "exploitation" comes for hiding real costs. Creating huge negative externalities which aren't measured and thus removed from the bottom line.

Re:And yet they're still stuck with the caste syst

[vidarh]

The difference is that in China it's the government doing the abuse, while in India the government has been fighting actively to get rid of the caste system.

Re:elsewhere IBM is coined as Indian Business Mach

[vidarh]

You miss the key difference between IBM and Apple:

IBM is largely a services company, always has been, and even more so now after the sale of their PC division. The vast majority of their staff are consultants for hire. For IBM it makes sense to invest in India because the Indian market for consultants is booming both because of the outsourcing craze, but also because the Indian economy is booming and homegrown IT companies are getting to the size where they're becoming a large potential market for IBM. To service that market, IBM needs local resources. Establishing research centers is vital, because it allows IBM to grow and retain staff that would be hard to keep in a pure consultancy play.

For Apple, on the other hand, there are few benefits to hiring people in India, as their primary revenue source is hardware/software and consumer products/services (like iTunes), none of which require a large presence on the ground in the local markets.