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Saturday, December 18, 2004

Offshoring : 15% of US -IT Jobs to India, Shall Free 30B$/yr, Says AMR, New Diplomacy For Destination India Needed !! -Part II

In Part I of this series, we covered,Lance Travis, VP,Research for AMR Research saying, India Offshore Outsourcing Frees Up $30B for New Investments in the U.S. In this second and concluding part, we shall examine steps needed to be taken by India to fulfill its role in this offshore equation. Excerpts with edits and my views added:

We earlier covered in this blog India Inc. Is Growing Twice as Fast as Japan Inc , wherein we covered the viewpoint of G.B.Prabhat of Satyam saying - "Across every industry spectrum, there is potential for knowledge work to relocate to India." Prabhat now writes,A new diplomacy for Destination India is needed to effectivlely attract global talent, and tap the latent potential. Prabhat,starts by saying ,It is now clear that knowledge work will inexorably continue to relocate to India across various industries, not just Information Technology and that as this trend intensifies, the world can head towards one of two scenarios.
Scenario A: Economic compulsions continue to propel business corporations to send work where it is most efficiently done. Political and social compulsions don't necessarily align with this movement. Large job losses continue in the developed economies, and the social outcry against India becomes vociferous. While economically the Indian is hailed as a smart professional, he is ostracised. Hate groups form against ethnic Indians. "Bangalored" joins the vocabulary of expletives. Western governments take veiled protectionist measures that cause their economic engine, and others, to sputter. Tension prevails in this tug-of-war for jobs.
However, a new diplomacy can remedy Scenario A. It will take hard work but will lead to the more desirable Scenario B

India needs to markets itself as an attractive work destination for foreign nationals. The emerging economic order need to seen as a relocation of jobs across the globe and not as the loss of jobs in one economy to the gain of jobs in another. India should embrace all developed nationalities to evolve a new professional melting pot which attracts the best professionals from all over the world and emphasise the better quality of life in India. A good number of foreign nationals move to India to work, and outsourcing is no longer seen as inimical to any country. Relieved of tension, corporations assign more than the planned quantum of work to India. More Indians, than foreseen before, find employment. The new diplomacy begins with the idea that jobs relocate and are not always lost.This new diplomacy has to gently remind the governments of developed countries that there can never be a globalisation with the movement of just capital and work. Movement of labour is just as necessary to sustain the new world order. Indians need not be worried about job loss due to this migration as the number of foreigners shall be small, economic power vastly exceeds political power that the forces to fear would be large companies, not large countries and no country will win by insularity. The economic dominance of America is largely due to the fact that it was most liberal in admitting foreign professionals.

How to put this new diplomacy to action? Much the same way a large corporation markets itself, India needs to :

- First, by implementing some changes that make the new proposition attractive.
- Next, by communicating its virtues and aggressively campaigning to its intended audience so they turn votaries.

India can be made attractive by addressing the twin aspects - physical and emotional health. A number of attractions of physical convenience already exist, albeit undersold. supply of domestic help, clement weather,(save for such exceptions as California) suffer from extreme weather. More and more Indian residential colonies resemble the best in the world. Telecommunications now work as well as anywhere else in the world. Designer labels are everywhere. For sure, a number of infrastructure elements need dramatic improvement. Airports, Cities,Road infrastructure etc.. Twin metros need to be built alongside existing cities. The emotional security of employees will be higher than the previous world average. No one employed in India needs to worry about job availability. The cost and efficiency arbitrage of the current India will ensure that it will be a long time before knowledge-based white-collar jobs that migrated from elsewhere will leave this country. A far less stressful life, with less attendance in psychiatric clinics and emotional well-being programmes, would be an important part of the desiderata of the average westerner.Prabhat concludes by saying that given its overarching nature, this diplomacy has to inform every policy: economic, political, educational or foreign. The challenge of building this new India would energise the country as a whole.. .

Can't agree more - Key issues to note, as much as the demand gets forecast in terms of nature and volume of offshoring, the fulfillment mechanism must be well geared and shall not happen just by chance hoping the vast pool of talent available would help meet the demand. Meeting this scale of demand needs far more planning and nay,as highlighted far more concerted planning,timely and efficient implementation. This is far more challenging than it looks as the ability of India Inc to thing big and effectively execute in time mega projects like twin cities is a cause for concern, but history and living examples amply demonstrate that this is possible - after all chinese infrastructure began to get developed in the last 20 + years - Today china boasts of more kilometers of expressway than the US!! China has shown how trade can be advanced much in its favour when strong political and social undercurrents were running against it - India is better placed from that perspective, to raise to the occassion and make this happen.
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