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Think global,
act local
Stringent
immigration rules being imposed by many Western nations is indirectly
resulting in outsourcing to India. This will lead to higher demand for
people in the domestic market, though the global mobility enjoyed by Indian
IT professionals will be curbed, writes Mohan Babu
Outsourcing
is an indirect fallout of stricter immigration rules by Western countries.
Already under political pressure to curtail immigration of labour because of
the slowdown, they are getting a push from disgruntled local workers. A
slowing domestic market in the West is shifting focus back to local markets.
In a knee-jerk reaction, governments are closing their doors to immigrants
because supply (locally) exceeds demand. This is direct fallout of the
global economic conditions and one cannot lament over its impli-cations.
Every cloud,
as they say, has a silver lining. The current slowdown is shifting the focus
back to costs. Executives of global companies who manage large data centres
and IT divisions need to keep them humming regardless of short-term market
conditions. Also, they do not want to get embroiled in domestic politics by
pushing for a continued migration of “cheap” foreign workers. Instead, they
are shifting jobs, outsourcing them to where it is cheaper. India, with its
proven outsourcing models and technical base is emerging as a favourite
destination for international outsourcers.
This also
means that careers for Indian IT people are going to be based and nurtured
in India, not in the UK, US, Singapore or elsewhere. Again, it is hard to
comment whether this is good or bad. It is definitely good for the Indian
economy and companies who are going to benefit from foreign-exchange
earnings. This is also going to lead to a higher demand for IT people in the
domestic market in India. However, Indian IT professionals who had got used
to the “perks” of flying out even before building a few years experience
will not enjoy the same global mobility seen in the past decade.
Some people
doubt if this shift towards outsourcing will continue in the long run. They
fear that this outsourcing trend we are seeing is a “one off” and Western
companies will go back to their old ways the moment the economy starts
moving north.
Shailesh
Singh, an IT veteran and a colleague of mine who has seen numerous swings in
the industry likens the current trend in outsourcing to the shift of
low-tech manufacturing of consumer goods like hosiery and sneakers out of
the US about three decades ago. None of that manufacturing has returned back
to the US. He adds, “Just like we may never see the return of manufacturing
of shoes in the US, even though the manufacture is controlled in America by
the likes of Nike, the trend towards IT outsourcing may be irreversible”.
The cost
benefits and ease of management of work that justified outsourcing may
prevent its movement back. However, just like Nike and Wrangler remain
quintessentially American by managing the bulk of overseas manufacturing
from hubs in the US; Adobe, EDS, IBM and Microsoft will remain American even
if the bulk of software development is done in India.
“Think
Globally” and “Act Locally” is going to become the new mantra of
outsourcers, something that will become harder to undo as more global
players jump on to the bandwagon.
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