America's IT - Moving Abroad In a Big Way

Maybe you don't follow the American IT industry but a lot of us do. What's been happening recently?

Michael Dell in Bangalore - 20,000 Indian employees by 2009
You knew Dell already employed about 10,000 workers in India, right? You may remember the fiasco over Dell's use of Indian call centers for customer service a couple years back. Well, apparently it didn't phase Dell. Because they will double their Indian workforce within 3 years.

Steve Jobs to visit India - Jobs to launch Apple's R & D facility (3000 people by 2007):
Okay all you Apple lovers here in the states. What do you think of this, eh? "He (Jobs) had spent four years in the 1970's as a 'hippie spiritual tourist' visiting holy places in the country. Reminiscent of Sir Paul McCartney and their ilk eh, seeking spirtual wisdom from without instead of from within but I digress... I guess we can start calling him Steve Jobs, HST - right?

IBM expands further in india with more than 38,500 employees in the country.
The revenue from India operations increased close to 55% for IBM. (Apparently in the last year - ed.) IBM plans to expand futher.

Computer Associates dumps Chatterjee Group
Computer Associates (CA) has set up its own development center at Hyderabad in India. This is something I've expected for years but I'm surprised it has taken so long to become reality. CA is INVESTING inside India which is a major difference from basic outsourcing.

(more IT-related stories here...)

(And hey - its not just IT-direct jobs anymore - eBay Inc President and CEO Meg Whitman said, "it was willing to acquire more companies in India and globally if the target company fulfills its requirement.")

Technically speaking, CA's move 'should' reduce labor costs, for what was once paid to an external company will now remain within the CA bank account. India has little/no requirements for benefits of any type - real estate is CHEAP compared to other property in other nations having a strong, tech workforce. (Everything - including people - is less expensive within India.)

Once inside of India - a corporation can pretty much forget worrying about worker's rights, protecting workers, heck - they can forget about pretty much everything except making money. Why?

Many, many court cases which actually make it into the court systems can take tens of years to move along. More than once, a case has outlived the defendant - we're talking over 20 years to get a case before the judge. Of course, if a case inolved a US MNC, it probably would move to the 'head of the class'.

More important to CA is this: Inside India's burgeoning IT sector, CA will be able to 'cherry-pick' the best. Its why IBM and Dell - and many other US companies are there. There only competition will be each other. Hundreds of thousands of people graduate from Indian hi-tech classes per year, more than enough to fill the tens of thousands of jobs moving permanently into India from the US.

My prediction? Once the big-boys start knocking elbows at various luncheons and meeting around the US, there will be another 'outsourcing crisis'. You know the blow, right? "Joe, company XYZ is setting up in India bigtime - what are we doing about it? What are we doing to compete?"

This time around will be different - because this time, the cycle will be complete. Its quite possible within the next 5 years there will be few, if any IT sector jobs remaining in the US of A. My opinion is this trend has already started.

You might think this would make Indian IT workers very happy but you could be wrong. Indian IT workers, like highly-skilled workers around the world, see their education and experience as a way to increase their income which they will use to elevate their lifestyle, improving their living conditions.

IMHO - once US companies locate themselves inside the Indian economy, the US companies - often referred to as MNC or Multi-National Corporation(s) - will take control of the prevailing wage. Any US MNC not in direct competition with another US MNC will likely do as all large firms have in the past - they will control prevailing wages, benefits (or lack thereof) and find the Foreign Trade Zones within India very profitable indeed.

I wouldn't be surprised if these highly-placed individuals didn't all club together on Friday nights at the local five stars...

The promise of a growing Indian "middle class" with real "buying power" is a myth economists want the workers to accept as fact.

India suffered under the British for a long time, becoming a nation only in 1947 (as I recall). The British are gone but not forgotten; they have been replaced by Capitalists who - for the most part - will be permitted to run free, unfettered by laws and conventions. Indeed, the underlying purpose of US MNC involvement within India or any nation outside the US can be distilled down to one thing: PROFIT.

Don't think India's leaders are slow to grasp this - for you would be gravely mistaken. India's big push, the one they hope will put them ahead of every other nation in the world, will be similar to IT - but this time around, it will be within the medical field. Think genetics, drugs, medical equipment, cloning - if its medical, it WILL be Indian - one day.

One final thought:
Realize the workforce in India is so huge that people still pretty-much do everything. Any attempt to fully-modernize India at the cost of employment will not succeed - for Indian politicians know an unemployed population is an angry population.

A second point to remember, for Indian IT workers, is this: Your best bet is to get some experience under your belt - hook up with a Euro or Aussie IT firm, or perhaps a Japanese or Dubai firm - then leave IF you want to enjoy the full fruits of your labor.

Foreign MNC wil only allow wages to reach a certain level, which is no more than India's nearest IT competitor. If the wage level pushes beyond that point, the MNC will move and move quickly. They will not care what happens to your economy or your people.

Count on it - for it is the way of the capitalist - "Follow Cheap Labor". Profit folks, its all about profit.

As for people living within the US - don't worry, not everything exported turns into gold.

US Airways is repatriating some reservation call center work from the Philippines back to the US and it is expected Delta and others will follow suit (bringing jobs back to the US from India) to increase quality of customer service.

Apparently, customer service works out better for the consumer and the corporation if its done within the US. So hurrah - the US will be recovering approximately 400 call center jobs from the US Airways decision.

Of course, the jobs will be slightly above minimum wage jobs, with meager benefits and I doubt very much they will offset the TENS OF THOUSANDS OF IT JOBS going abroad for software and hardware R & D.

In fact, I predict the US Airway jobs will have little effect on the local economy let alone have any effect at all upon the US economy.

We're turning into a nation of telemarketers and phone reps folks - and that's sad.

One last article for you folks: DaimlerChrysler (is) looking at upgrading its Indian research and development laboratory into an engineering center.

DamilerChrysler has fallen victim to one of the world's greatest 'Hypemyths': "...the area of CAD/CAM and computing analysis "where the Indians are traditionally very good."

Say DC - ever hear of sterotyping? Ever hear of believing your own falsehoods? Don't believe me? Spend a week browsing around the various chat groups, use groups, forums and anywhere else you can find IT people talking IT and read the posts from Indian IT workers contracted to work on US MNC software.

I'm telling you now - Indians, as a national group, are no better than any other nationality, especially US IT workers. It has absolutely nothing to do with Indians being "traditionally very good" in "the area of CAD/CAM and computing analysis".

What it does have to do with is MONEY. Period.

Personally - I'd have more respect for DC if they simply stated the truth.

"We're looking long and hard at India quite frankly, because labor costs are far below what we would have to dole out within any other technically-savy country. As long as costs remain low, we'll be in India. Next question?"

I doubt ANY MNC will ever state the truth regarding Indian labor. We'll just have to wait and see.

The real question, really - is this: "When will Indian IT workers form a union within India?"