The head of India’s giant software company Infosys from the tree-top-high office explains the rise of an economic phenomenon about the engulf the world. Outsourcers are outsourcing themselves. In the west, once known for sucking jobs out of call centers and Information Technology departments. Indian technology firms are re-exporting them to wealthier nations as wage inflation and skills shortages at home reverse the process. By workers who speak half a dozen European languages, Infosys spent $250m this year buying the Polish call center of Philips.
The company is building up a network of offices stretching from Mexico to eastern Europe to China to provide an anytime anywhere solution to its clients. Their classmates are global so they have become so. In America, Finland, Portugal and Europe for hundreds of millions of dollars, the infosys is not alone. Wipro the another hi-tech titan has been on a spending spree, buying up companies. The Azim Premji, Wipro’s chairman, raised eyebrows on wall street when he talked this year of setting up divisions in Idaho.
In Britain, Tata is the largest firm in India, it is a running call centers. The dutch bank was recently bought by an RBS consortium. It will pay Tata Consultancy Services about $200m to send work halfway across the globe to Brazil where the software programmers will run computer systems. From the multinational firms, pull them apart and put them together more efficiently, the Indian software companies skill is that they have been able to take complex tasks. The expertise has reached a stage where it can be done anywhere across the globe, grafting Indian Technical knowhow onto white-collar workers in Brazil or Saudi Arabia or even back to the US.
The ability of an industry in a developing country such as India to export managerial and entrepreneurial capital to wealthier nations is unprecedented. The countries typically specialize in the industries such as the Information Technology only when their income per head passes $15,000 and they do not export investment until per capital GDP touches $45,000. The comparable figure for the India is only $900. India finds comparative advantages in skills and managerial capital. The growth of India’s software firms is the other strange feature that the Indian economy booming at 9 percent a year. Barely 2 percent of Infosys’s income comes from India instead of wall street banks asking for the Spanish language support or China’s booming economy sway investment decisions. The non-English spaking revenues contribute about a fifth of the total, it is a growing fast and they have to build up expertise in languages.
Large workforces around the world, the Indian software companies are replicating the model of a bigger foreign rivals, including the IBM and Accenture. Both of the multinationals aim to have workforces of 100,000 in India in a few years and companies such as Infosys are girding themselves for battle. Nobody dominates the space, they built that up in the age of the PC which is 25 years old they came about with the Internet. The Indian companies are also aware that the coming up on their tail are competitors.
REFERENCE:
http://www.guardian.co.uk/business/2007/oct/13/india
