DesiBaba
May 2nd, 2003, 07:08 PM
A generation ago, an ambitious native of India like Vivek Kaluskar might have left his country for good. Now, the 25-year-old is planning to go back to his home city of Bangalore when he leaves Georgia Tech with a degree in computer science.
He'll return to become part of a huge and growing tech sector in Bangalore, where local companies mingle with outposts of American giants like Microsoft (Nasdaq: MSFT) . He'll earn less money -- maybe $1,000 a month -- but he'll live on less, too.
"With the software boom, the standard of living is better," he said. "More and more people are able to afford larger cars. Before, people didn't own cars."
Bangalore, a city of 5.5 million, has become one of the world's hot spots for the kind of white-collar jobs that were long a strength of the U.S. economy.
Now, many are moving overseas.
Coca-Cola, for example, already outsources about 15 percent of its information technology work and plans to do even more to cut costs. Few of those jobs have gone abroad so far, but in the future, about 70 percent of Coke's outsourced work will end up overseas, chiefly in India.
This increasing mobility of many jobs -- in IT, but also in areas like accounting and engineering, and in less-skilled fields like call centers -- has grown into a mainstream trend. There's concern that tech jobs could make a shift akin to what happened when manufacturing jobs migrated to Mexico, China and Southeast Asia. As with those factory jobs, the job market for American tech workers, already depressed by the dot-com bust and the stagnant economy, could get tighter.
"The Internet has made this world a lot smaller," said Paul Eurek, co-CEO of Xpanxion, an Alpharetta, Ga. company that specializes in moving tech work offshore for clients that include Coke. "It is the way it's going to go."
Tech jobs have been moving overseas for some time, but a confluence of factors has accelerated the shift. They include corporate cost-cutting, a stale U.S. economy and the rising sophistication of many overseas tech communities.
Just a few years ago, it would have been absurd to fret about a shortage of U.S. jobs in technology and many other sectors. Even as the movement of jobs abroad started to flourish, many American workers didn't care because jobs here were so plentiful.
But the job market is changing. According to Forrester Research, 3.3 million U.S. services jobs will head offshore during the next 15 years, led by the IT industry. Delta Air Lines (NYSE: DAL) , for example, announced last year that it will save up to $15 million a year by placing reservations centers in India and the Philippines.
Countries on the receiving end of the shift have been busy building and promoting their tech sectors.
India is the most aggressive, dating to the 1980s. The work has continued, such as with the May 1998 formation of a task force on information technology and software development to "help India emerge as an IT software superpower," according to NASSCOM, India's main vehicle for promoting itself as a tech destination. Like a few other countries, India has the advantage of low wages and an educated, English-speaking labor pool.
The growing competition from abroad hits the United States in a sector where it has long been dominant. The skill required of tech workers is one difference between the tech migration and the shift of manufacturing jobs abroad.
"This is now knowledge work -- toward the top of the food chain, as opposed to unskilled or semiskilled work," said Jim Foley, a professor at Georgia Tech's College of Computing.
The offshore movement has been led largely by tech companies. Now, Coke, among others, is following their lead.
"We are very early in the process," said Coke spokesman Ben Deutsch. The company believes it can save up to 20 percent of its costs by outsourcing certain information technology functions.
Some argue that shifting work overseas has negative effects beyond the cost in U.S. jobs. Some U.S. labor activists charge that overseas operations are sweatshops. Others say foreign work lacks quality and is hard to supervise.
But the quality of overseas work is improving, and the potential savings are compelling for many companies.
Forrester Research estimates that offshoring functions like IT and customer service work can save up to 50 percent. Georgia Tech's Foley puts the savings in the same range, even after taking into account travel and administrative costs.
http://www.newsfactor.com/perl/story/21425.html
He'll return to become part of a huge and growing tech sector in Bangalore, where local companies mingle with outposts of American giants like Microsoft (Nasdaq: MSFT) . He'll earn less money -- maybe $1,000 a month -- but he'll live on less, too.
"With the software boom, the standard of living is better," he said. "More and more people are able to afford larger cars. Before, people didn't own cars."
Bangalore, a city of 5.5 million, has become one of the world's hot spots for the kind of white-collar jobs that were long a strength of the U.S. economy.
Now, many are moving overseas.
Coca-Cola, for example, already outsources about 15 percent of its information technology work and plans to do even more to cut costs. Few of those jobs have gone abroad so far, but in the future, about 70 percent of Coke's outsourced work will end up overseas, chiefly in India.
This increasing mobility of many jobs -- in IT, but also in areas like accounting and engineering, and in less-skilled fields like call centers -- has grown into a mainstream trend. There's concern that tech jobs could make a shift akin to what happened when manufacturing jobs migrated to Mexico, China and Southeast Asia. As with those factory jobs, the job market for American tech workers, already depressed by the dot-com bust and the stagnant economy, could get tighter.
"The Internet has made this world a lot smaller," said Paul Eurek, co-CEO of Xpanxion, an Alpharetta, Ga. company that specializes in moving tech work offshore for clients that include Coke. "It is the way it's going to go."
Tech jobs have been moving overseas for some time, but a confluence of factors has accelerated the shift. They include corporate cost-cutting, a stale U.S. economy and the rising sophistication of many overseas tech communities.
Just a few years ago, it would have been absurd to fret about a shortage of U.S. jobs in technology and many other sectors. Even as the movement of jobs abroad started to flourish, many American workers didn't care because jobs here were so plentiful.
But the job market is changing. According to Forrester Research, 3.3 million U.S. services jobs will head offshore during the next 15 years, led by the IT industry. Delta Air Lines (NYSE: DAL) , for example, announced last year that it will save up to $15 million a year by placing reservations centers in India and the Philippines.
Countries on the receiving end of the shift have been busy building and promoting their tech sectors.
India is the most aggressive, dating to the 1980s. The work has continued, such as with the May 1998 formation of a task force on information technology and software development to "help India emerge as an IT software superpower," according to NASSCOM, India's main vehicle for promoting itself as a tech destination. Like a few other countries, India has the advantage of low wages and an educated, English-speaking labor pool.
The growing competition from abroad hits the United States in a sector where it has long been dominant. The skill required of tech workers is one difference between the tech migration and the shift of manufacturing jobs abroad.
"This is now knowledge work -- toward the top of the food chain, as opposed to unskilled or semiskilled work," said Jim Foley, a professor at Georgia Tech's College of Computing.
The offshore movement has been led largely by tech companies. Now, Coke, among others, is following their lead.
"We are very early in the process," said Coke spokesman Ben Deutsch. The company believes it can save up to 20 percent of its costs by outsourcing certain information technology functions.
Some argue that shifting work overseas has negative effects beyond the cost in U.S. jobs. Some U.S. labor activists charge that overseas operations are sweatshops. Others say foreign work lacks quality and is hard to supervise.
But the quality of overseas work is improving, and the potential savings are compelling for many companies.
Forrester Research estimates that offshoring functions like IT and customer service work can save up to 50 percent. Georgia Tech's Foley puts the savings in the same range, even after taking into account travel and administrative costs.
http://www.newsfactor.com/perl/story/21425.html