Friday, February 17, 2006

A Trio of Outsourcing Articles

1. In the Washington Post, a look at a northern Virginia company called Approva, which has a sizeable BPO operation in Pune. The tone is almost routine: there is little of the defensiveness about American jobs going overseas that we saw in the Outsourcing Hysteria era of 2003-2004. Here, one of the Pune employees of the company goes so far as to suggest that the company's use of BPO streamlines their costs, and has possibly created 100 jobs in the U.S.

But perhaps the most interesting part of the article actually pertains to office decor:

Tech firms here have created office parks that would not look out of place in Tysons Corner or Reston, but even in office decor, they strive to bridge the gap between the two cultures. Gupta recalls how the original color scheme for IMC's new offices in Pune was so loud -- even more than so than in the Silicon Valley dot-com boom of the late 1990s -- that he intervened to tone it down. "In the U.S., most of our offices are conservative: white walls, blue carpets," he said. "In India, offices have oranges and pinks and yellows. I was trying to balance the two cultures." Even with Gupta's modifications, IMC still bursts into bright blues and yellows and oranges, from ceiling to floor.

Sounds nice, actually.

2. Another article, in the New York Times, argues that India may not be able to keep up with the spiraling demand for engineers who are "polished" enough to work in BPO:

India’s $23.4 billion outsourcing industry accounts for most of the country’s software and services industry, which makes up nearly 5 percent of gross domestic product. The industry employs 1.2 million workers, has sparked a consumer revolution in India, and is accelerating at more than 30 percent a year.

On the sidelines of the Nasscom meeting, B. Ramalinga Raju, chairman of India’s fourth- largest outsourcing company, Satyam Computer Services, said that India produced three million college graduates every year, including nearly 400,000 engineers. "But most of these are uncut diamonds that have to go through polishing factories, as the trade requires only polished stones," Mr. Raju said.

Though the piece is rich with numbers and statistics, one thing it doesn't consider is what would happen if the growth in outsourcing were to level off. You might have a lot of unhappy Engineers!

3. There was also a second article on outsourcing in the Times yesterday, this one focusing on a recent study indicating that the skill-level of outsourcing work in India and China is rising rapidly. There isn't that much to this piece; most of it is examples from major American companies like Dow Chemicals and IBM on their plans to set up advanced Research and Development units in India and China. Universities in those countries are moving forward rapidly in terms of science and engineering research, and are proving formidable competitors to U.S. research universities.

My favorite quote from this article is a rather ambitious statement from Berkeley's Dean of Engineering:

Some university administrators see the same trend [i.e., the rise of Asian universities]. "This is part of an incredible tectonic shift that is occurring," said A. Richard Newton, dean of the college of engineering at the University of California, Berkeley, "and we've got to think about this more profoundly than we have in the past. Berkeley and other leading American universities, he said, are now competing in a global market for talent. His strategy is to become an aggressive acquirer. He is trying to get Tsinghua University in Beijing and some leading technical universities in India to set up satellite schools linked to Berkeley. The university has 90 acres in Richmond, Calif., that he thinks would be an ideal site.

"I want to get them here, make Berkeley the intellectual hub of the planet, and they won't leave," said Mr. Newton, who emigrated from Australia 25 years ago.

Now that's optimism!


Otpreka Singh said...

Interesting stuff

10:25 PM  
brimful said...

Interestingly, around the same time, the NEJM published an article on medical outsourcing.

The Newton quote sounds very... Berkeley. :)

4:02 PM  

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