Saturday, September 27, 2008

Economic Crisis Threatens Indian Outsourcing

A high-level analyst in the US says that the current economic crunch could badly hit India's outsourcing-driven growth.

4 comments:

aditi said...

isnt that quite obvious?

san said...

Well, I don't quite agree with it. It's been said for quite some time now that the next big Indian migration after IT, will be a migration into Financial Services. Indian IT first came into international prominence during the Y2K crunch period, where India's low-cost abundant pool of talent showed its usefulness to the world. Now the world is facing a financial crunch, with tens of thousands of layoffs looming in the financial sectors for western countries. And likewise, now India once again has a chance to show off its pool of talented personnel, who can now migrate into this handsome-paying sector, while still providing cost advantages over western counterparts. Finance is just another form of software or engineering, after all. So it is a close cousin to IT, but an older and more powerful one, as money makes the world go round.

Ghost Writer said...

I think this whole outsourcing business is over-rated - it is jobs being provided for McCaulay's "special class of Indians" - the army of clerks that our higher education system seems to churn out in abundance. What we really need is Indian innovation that leads to local jobs - not being automatons for American multi-nationals.

Also san - I value agriculture and manufacturing more than finance. Finance may be an older cousin of IT - but too much finance for any economy is actually a cancer (case in point US of A) - I view finance the same way that I view the armed forces; very important, but also always subordinated to agriculture and manufacturing. Those two are the real powerhouses of the Indian economy

san said...

gw, the thing is that just like IT, financial skills are very portable and widely applicable across the global economy. Everybody needs capital, not just Indians. Money is a universal language that everyone needs to speak, more so than C++, Java, or English. If we become proficient in this language of money, then we will be able to participate in any opportunities anywhere across the world, no matter how far away. What we need to do is avoid staying trapped in this 'SouthAsia' box that has been devised against us, and to break out and interact with the wider world.