?

Log in

No account? Create an account
Outsourcing to India becomes too expensive. - Adventures in Engineering — LiveJournal
The wanderings of a modern ronin.

Ben Cantrick
  Date: 2008-04-21 11:09
  Subject:   Outsourcing to India becomes too expensive.
Public
  Music:Alanis Morissette - Ironic
  Tags:  reddit

OUTSOURCING TO INDIA may soon become a thing of the past for small to mid-sized technology firms, due to the increasing costs of rent, salaries and a looming end to the government’s tax holiday.

India’s technology, and especially software industry, has seen spectacular growth over the last few years, tripling in size to reach an astounding $52 billion. But it seems that the bubble may be about to burst.

The slowing US economy is having a big impact on India’s future as a market for outsourced business, with foreign firms tightening their belts as India’s currency strengthens, and operational costs soar, not to mention the fact that skilled manpower is becoming scarcer, and those available are demanding higher salaries. To add to tech companies’ concern, the government tax policy is also looking a bit uncertain.

Sankaran P. Raghunathan, president at the IT SME Association, an umbrella for 3,200 small to mid sized IT firms, told the WSJ's Marketwatch, "operating in India has become extremely difficult because of the government's fiscal policies."


http://www.theinquirer.net/gb/inquirer/news/2008/04/18/india-becoming-expensive-tech

Schadenfreude Job Security ensues.
Post A Comment | 6 Comments | | Link






Alex Belits: mona
  User: abelits
  Date: 2008-04-21 19:16 (UTC)
  Subject:   (no subject)
Keyword:mona
As I have said it before:

Both China and India have way too many people and way too little industry and infrastructure to support them.

Chinese solution: Build industry of all kinds, sell products abroad for cheap, see it as a part of the building process, switch to the internal market after it is strong enough, disregard loud noise from abroad, build nukes to keep foreigners with overdeveloped sense of entitlement away.

Indian solution: Produce things Indian population can't possibly use, build no infrastructure, promote development of skills of dubious quality in the majority of population, try to get money from abroad (I guess, to pay neighbors for actual products).

I guess, it's obvious which of those solutions I think, is going to work.
Reply | Thread | Link



tiger0range
  User: tiger0range
  Date: 2008-04-21 22:30 (UTC)
  Subject:   Actually India isn't all call centers and software
And you might be wondering why they are pricing themselves out of the outsourcing game. It's because their internal software development industry is taking off.

In terms of why call centers and software took off, it was a perfect storm of good education facilities with a large number of fluent English speakers and a poor economy.

India doesn't have the infrastructure of China, but it doesn't have the problems either.
Reply | Parent | Thread | Link



Alex Belits: mona
  User: abelits
  Date: 2008-04-21 23:16 (UTC)
  Subject:   Re: Actually India isn't all call centers and software
Keyword:mona
It's because their internal software development industry is taking off.

In terms of why call centers and software took off, it was a perfect storm of good education facilities with a large number of fluent English speakers and a poor economy.

Parse error.

If it's internal Indian industry, it should not depend on knowledge of a foreign language, and if it's a poor economy, the last thing it needs is domestically produced software (yes, I am saying that despite being an embedded software developer). If you mean that companies do full development cycle of software in India as opposed to being subcontractors, this is a meaningless distinction because it's still completely dependent on foreign buyers, and contributes very little to the rest of "poor economy". It's a colonial type of development, thing that countries should avoid like plague.

India doesn't have the infrastructure of China, but it doesn't have the problems either.

Huh? If it has high population density, insufficient infrastructure and widespread poverty, how it "doesn't have the problems"? Do you mean, its government and rich people don't not have problems with the country being in such a position? Or that it doesn't have specific problems of China such as being "undemocratic"?

Edited at 2008-04-21 11:16 pm (UTC)
Reply | Parent | Thread | Link



tiger0range
  User: tiger0range
  Date: 2008-04-23 22:23 (UTC)
  Subject:   Re: Actually India isn't all call centers and software
Calling English "foreign" in India is kind of indicative of not understanding India. English, more than Hindi, holds the country together. The distinction comes in that the infrastructure is currently booming in growth. Computers are suddenly affordable to the middle class. People are buying regional software in exponential rates.

Also, there is a lot of foreign and local investment that is rapidly growing industrial infrastructure in India. So let's say you have the option of working for a foreign company that is looking for the cheapest labor they can find and probably will move away soon, or getting in on the ground floor of a local company right at the base of a boom. Where are you going to go?

If you look at manufacturing sector, you will see double digit growth in the last few years. It's second only to China (and a close one at that) which is amazing when you think how much huger China is.
Reply | Parent | Thread | Link



tiger0range
  User: tiger0range
  Date: 2008-04-23 22:38 (UTC)
  Subject:   Re: Actually India isn't all call centers and software
The problem isn't democracy or even human rights. It's simply the math of pulling that huge of a population and area out of poverty. Will China overtake US in global economic might in our lifetime? Yes, it probably will within the next decade.

Will the avarage Chinese be better off than the avarage American in our lifetime? No.

Could India raise up to American level in our lifetime. Possibly, but probably not.

Will the avarage Indian be better off than the avarage Chinese? You better bet they will be!
Reply | Parent | Thread | Link



browse
May 2015