Post by unlawflcombatnt on Apr 7, 2007 16:12:09 GMT -6
Below are excerpts from an article titled In India, Outsourcing Moves to the Top Floor. The article describes and details how outsourcing is moving up the income ladder. Even some of globalization's previous supporters are starting to see the light. On a positive note, as noted elsewhere by David Sirota, while outsourcing is affecting still more Americans, opposition is growing in tandem. It appears Corporate greed is well on its way to killing the goose that laid the golden egg. Outsourcing is starting to affect those with higher incomes, which also means it's affecting people with more political influence.
"In India, Outsourcing Moves to the Top Floor
By Anand Giridharadas
International Herald Tribune
April 3, 2007
Outsourcing is breaking out of the back office. Until recently, the migration of service industry jobs from the West to places like India seemed to obey an unwritten law: Low-skill clerical and programming tasks would leave the developed economies, while high-end careers requiring graduate degrees and commanding six-figure salaries would stay behind. While call centers and software houses closed in the West, often leaving their workers scrounging for employment, professionals in fields like aeronautical engineering, investment banking and drug research likely believed they had nothing to worry about. Quietly, but steadily, that is changing. High-skilled jobs in those very fields, which once epitomized the competitiveness of Western economies, are flowing to India. The pool of jobs once thought to be impossible to outsource is gradually evaporating.
Boeing and Airbus now employ hundreds of Indians on critical tasks, including the design of next-generation cockpits and systems to prevent airborne collisions. For about one-fifth the cost, investment banks like Morgan Stanley are hiring Indians to analyze U.S. stocks, a job that can pay $200,000 a year or more on Wall Street. Eli Lilly, the U.S. drug maker, recently handed over a promising molecule it discovered to an Indian company, Nicholas Piramal, which will be paid $500,000 to $1.5 million a year per scientist for at least two years of work readying the drug for commercial use. And with multinationals employing tens of thousands of Indians, some are beginning to treat the country like a second headquarters, sending senior executives with global responsibilities to work from India. Cisco Systems, a maker of communications equipment, has mandated that 20 percent of its top talent be in India within five years. The company recently moved one of its five highest-ranking executives, Wim Elfrink, to Bangalore as its chief globalization officer....
Alan Blinder, a former vice chairman of the U.S. Federal Reserve Board and former economic adviser to President Bill Clinton, recently described outsourcing as a "third Industrial Revolution" that, by his estimate, threatens the jobs of 28 million to 42 million workers in the United States alone.
"We have so far barely seen the tip of the offshoring iceberg, the eventual dimensions of which may be staggering," he wrote in the March/April edition of Foreign Affairs. But Blinder, who teaches at Princeton, added that the likely consequence is not large-scale joblessness in the West. Instead, he argues, the West will shed jobs in easily outsourced fields, like accountancy, and migrate to new professions, like the police or clinical medicine, that must be rendered in person. A few years ago, the work sent to India consisted mostly of $100,000-a-year-or-less jobs in software maintenance or $50,000-a-year-or-less jobs in customer service, said Atul Vashistha, who runs neoIT, a consulting firm in California that advises U.S. companies on outsourcing. Now, outsourced jobs include elite positions that pay $200,000 a year or more in the West, he said....
Behind that shift is a story of how an upstart Indian outsourcing industry, needing to prove itself and fend off rivals from Eastern Europe to China, reinvested the profits from outsourced grunt work into an upgrade of skills. Infosys, for example, devotes $65 of every $1,000 in revenue to training. IBM, its U.S. rival, spends $6.56, according to a 2006 proxy statement. The Indian vendor's investment bore fruit: Western blue-chip companies started sending Infosys critical pieces of their core business tasks...."
This is yet another example of how Corporate America is not investing in employee training, as they had done in previous decades. Instead, they expect the government, the taxpayer, and the employees to pick up the tab. This savings allows them to increase their exorbitant, record-level profits, to even more exorbitant levels. Meanwhile, Corporate America's slime-balls continue to beat the drum about "lack of skilled workers." (Think Bill Gates.) Apparently the concept of training workers themselves is simply inconceivable. They couldn't possibly re-invest any of those record-level profits to train workers. Better to spend that money on lobbying for more tax breaks and more H1B visas.
"A few years ago, the aerospace giants Airbus and Boeing were outsourcing only basic work like digitizing old hard copy drawings. But they began to outsource ever more complex endeavors as their Indian partners hired their own aerospace engineers, many of them trained at Indian engineering colleges before accruing decades of experience in the Indian state-owned aviation sector....
In Boeing's forthcoming 787 Dreamliner, two mission-critical systems - one to avert airborne collisions and another allowing landings in zero visibility - will be built largely by HCL Technologies, an outsourcing firm outside Delhi....
And in the complex world of pharmaceutical research, Western companies have evolved from outsourcing slivers of research to Indians to outsourcing entire phases of drug development. In January, Eli Lilly announced a deal with Nicholas Piramal that sent ripples through the industry. Not only would Lilly turn over ownership of a patented molecule to its Indian partner, Nicholas would usher the drug through the first two phases of clinical trials over two to three years. Moreover, Nicholas agreed to bear the risk of project failure, in exchange for much larger royalty payments should it succeed....
But (Narayana) Murthy, the Infosys chairman, said that his Western clients follow a simple, entirely rational mantra: "Invest where you get maximum returns, source talent from where it is best available, produce where it's most cost-effective, and sell where the markets are, without being constrained by national boundaries.""
The full article can be found at
In India, Outsourcing Moves to the Top Floor
"In India, Outsourcing Moves to the Top Floor
By Anand Giridharadas
International Herald Tribune
April 3, 2007
Outsourcing is breaking out of the back office. Until recently, the migration of service industry jobs from the West to places like India seemed to obey an unwritten law: Low-skill clerical and programming tasks would leave the developed economies, while high-end careers requiring graduate degrees and commanding six-figure salaries would stay behind. While call centers and software houses closed in the West, often leaving their workers scrounging for employment, professionals in fields like aeronautical engineering, investment banking and drug research likely believed they had nothing to worry about. Quietly, but steadily, that is changing. High-skilled jobs in those very fields, which once epitomized the competitiveness of Western economies, are flowing to India. The pool of jobs once thought to be impossible to outsource is gradually evaporating.
Boeing and Airbus now employ hundreds of Indians on critical tasks, including the design of next-generation cockpits and systems to prevent airborne collisions. For about one-fifth the cost, investment banks like Morgan Stanley are hiring Indians to analyze U.S. stocks, a job that can pay $200,000 a year or more on Wall Street. Eli Lilly, the U.S. drug maker, recently handed over a promising molecule it discovered to an Indian company, Nicholas Piramal, which will be paid $500,000 to $1.5 million a year per scientist for at least two years of work readying the drug for commercial use. And with multinationals employing tens of thousands of Indians, some are beginning to treat the country like a second headquarters, sending senior executives with global responsibilities to work from India. Cisco Systems, a maker of communications equipment, has mandated that 20 percent of its top talent be in India within five years. The company recently moved one of its five highest-ranking executives, Wim Elfrink, to Bangalore as its chief globalization officer....
Alan Blinder, a former vice chairman of the U.S. Federal Reserve Board and former economic adviser to President Bill Clinton, recently described outsourcing as a "third Industrial Revolution" that, by his estimate, threatens the jobs of 28 million to 42 million workers in the United States alone.
"We have so far barely seen the tip of the offshoring iceberg, the eventual dimensions of which may be staggering," he wrote in the March/April edition of Foreign Affairs. But Blinder, who teaches at Princeton, added that the likely consequence is not large-scale joblessness in the West. Instead, he argues, the West will shed jobs in easily outsourced fields, like accountancy, and migrate to new professions, like the police or clinical medicine, that must be rendered in person. A few years ago, the work sent to India consisted mostly of $100,000-a-year-or-less jobs in software maintenance or $50,000-a-year-or-less jobs in customer service, said Atul Vashistha, who runs neoIT, a consulting firm in California that advises U.S. companies on outsourcing. Now, outsourced jobs include elite positions that pay $200,000 a year or more in the West, he said....
Behind that shift is a story of how an upstart Indian outsourcing industry, needing to prove itself and fend off rivals from Eastern Europe to China, reinvested the profits from outsourced grunt work into an upgrade of skills. Infosys, for example, devotes $65 of every $1,000 in revenue to training. IBM, its U.S. rival, spends $6.56, according to a 2006 proxy statement. The Indian vendor's investment bore fruit: Western blue-chip companies started sending Infosys critical pieces of their core business tasks...."
This is yet another example of how Corporate America is not investing in employee training, as they had done in previous decades. Instead, they expect the government, the taxpayer, and the employees to pick up the tab. This savings allows them to increase their exorbitant, record-level profits, to even more exorbitant levels. Meanwhile, Corporate America's slime-balls continue to beat the drum about "lack of skilled workers." (Think Bill Gates.) Apparently the concept of training workers themselves is simply inconceivable. They couldn't possibly re-invest any of those record-level profits to train workers. Better to spend that money on lobbying for more tax breaks and more H1B visas.
"A few years ago, the aerospace giants Airbus and Boeing were outsourcing only basic work like digitizing old hard copy drawings. But they began to outsource ever more complex endeavors as their Indian partners hired their own aerospace engineers, many of them trained at Indian engineering colleges before accruing decades of experience in the Indian state-owned aviation sector....
In Boeing's forthcoming 787 Dreamliner, two mission-critical systems - one to avert airborne collisions and another allowing landings in zero visibility - will be built largely by HCL Technologies, an outsourcing firm outside Delhi....
And in the complex world of pharmaceutical research, Western companies have evolved from outsourcing slivers of research to Indians to outsourcing entire phases of drug development. In January, Eli Lilly announced a deal with Nicholas Piramal that sent ripples through the industry. Not only would Lilly turn over ownership of a patented molecule to its Indian partner, Nicholas would usher the drug through the first two phases of clinical trials over two to three years. Moreover, Nicholas agreed to bear the risk of project failure, in exchange for much larger royalty payments should it succeed....
But (Narayana) Murthy, the Infosys chairman, said that his Western clients follow a simple, entirely rational mantra: "Invest where you get maximum returns, source talent from where it is best available, produce where it's most cost-effective, and sell where the markets are, without being constrained by national boundaries.""
The full article can be found at
In India, Outsourcing Moves to the Top Floor