http://www.nytimes.com/2004/04/28/technology/28SOUR.html
Send Jobs to India? Some Find It's Not Always Best
By EDUARDO PORTER
New York Times
Published: April 28, 2004
Even as the prospect of high-skilled American jobs moving to low-wage countries
like India ignites hot political debate, some entrepreneurs are finding that
India's vaunted high-technology work force is not always as effective as advertised.
"For three years we tried all kinds of models, but nothing has worked so far,"
said the co-founder and chief technology officer of Storability Software in
Southborough, Mass. After trying to reduce costs by contracting out software
programming tasks to India, Storability brought back most of the work to the
United States, where it costs four times as much, and hired more programmers
here. The "depth of knowledge in the area we want to build software is not good
enough" among Indian programmers, the executive said.
If it sounds like "Made in the U.S.A." jingoism, consider this: The
entrepreneur, Hemant Kurande, is Indian. He was born and raised near Bombay and
received his master's degree from the Indian Institute of Technology in that
city, now known as Mumbai. Mr. Kurande is not alone in his views on
"outsourcing" technology work to India. As more companies in the United States
rush to take advantage of India's ample supply of cheap yet highly trained
workers, even some of the most motivated American companies — ones set up or run
by executives born and trained in India — are concluding that the cost advantage
does not always justify the effort.
[...]
...cost advantage...
There is no cost advantage anywhere, just how badly people want work. The Indians may be dancing this instant but they aren't getting that good a deal.
Intel charges the same amount for its chips everywhere. Motorola's phones are as expensive or inexpensive in India as they are in other countries. $20k per year can't buy decent healthcare in India though the prices of drugs in India are a fraction of those in developed countries because of its different patent laws. LG charges the same amount for its refrigerators in India that it does in Korea and the rest of the world. Real-estate in Delhi, the capital of India is costlier than many cities in the developed world. The $20k a year engineers have no benefits.
Those corporations doing offshoring are living off the perception that somehow things are cheaper in India.
Globalization is a name for the circumvention of the labor laws of developed countries and the denial of basic rights in developing ones.
Check the prices of some items in India:
www.fabmall.com
www.motozone.yahoo.co.in
www.lgezbuy.com
http://www.cushwakeasia.com/publication/pdf/india/ND%20Q103.pdf
More on India's patent laws:
http://www.wired.com/news/conflict/0,2100,48153,00.html
http://www.wired.com/news/medtech/0,1286,47643,00.html
Posted by: kid@delhi.shining-software-co.co.in | Saturday, May 01, 2004 at 05:53
I read your blog on outsourcing. I have found it quite informative, interested and also helpful in sharing knowledge resources.
http://www.offshoreoutsourcingworld.com
Posted by: prabhjot | Friday, June 03, 2005 at 22:14
The title is provocative:: "Send Jobs to India? Some Find It's Not Always Best"... However, I wonder if executives reading this are going to rethink their Offshoring/outsourcing strategies?
- MB
http://www.offshoringmanagement.com
Posted by: MB | Tuesday, June 21, 2005 at 02:00