Sunday, February 18, 2007

Outsourcing: The Salvation?

Whenever I have voiced my skepticism about outsourcing and its long-term sustainability as a driver of economic growth, I have met with attacks, (especially from those whose knowledge of India begins and ends with "The World is Flat"). Back in 2004, a report from the UN Conference on Trade and Development (UNCTAD) noted, to realise the potential for linkages and spillovers and to promote economic growth, including at the regional level, a stronger domestic market-orientation was necessary; simialrly, the boom in software and IT-enabled services may lead potentially to adverse effects on other parts of the economy that compete for skilled manpower. Today blog GigaOm reports that three leading Indian newspapers including The Hindustan Times and the Times of India talking about the problems of becoming the backoffice of the world.The real issue is not only that nature of the outsourced work is unable to provide its employees with job satisfaction over the longer term. But more importantly, what kind of a "knowledge economy" does it really create?


Harman said...

My first comment here.

I have had a taste of outsourcing in the so called high end financial outsourcing space.
I am appalled to see the best and the brightest taking up jobs with no intellectual challenge for the sake of few lakhs.
I don't mean to say that all outsourcing jobs are trivial or mundane. But exchange rate difference is resulting in upstaffing of outsourced jobs. Jobs which were being done by commerce graduates in US are being outsourced to MBAs from top tier institutions.
We can't afford to look away from outsourcing. It is a multi-billion oppurtunity. But we need to upgrade our educational institutions so that our graduates become employable.
The long term effects of outsourcing are not yet understood. I don't believe that a nation will not suffer if its best brains (engineering, scientific,academic, cultural, commercial, entrepreneural) are not channeled to their natural callings

Ananya said...

Dear Harman, I am very keen to hear more from you. Why not write a post?