10-12-2003, 03:51 PM
[url="http://www.newindpress.com/Newsitems.asp?ID=IEN20031011150438&Title=Infotech&rLink=263"]Don't worry about China, India is still the best: McKinsey[/url]
BANGALORE: If IT bellwether Infosys Technologies brought the feel-good factor back again by spreading the cheer all around, then Intel Chairman Andrew S Grove topped it up by saying India and China are the key threats to the US dominance in the hi-tech sector.
But wait a moment. Even as Infosys has taken a big step to take on the Chinese on their own turf by deciding to open a subsidiary there, India seems to have a head start over China in the emerging IT-enabled services (ITES) segment.
For all the talk of China, the Philippines and Malaysia giving a stiff competition to India in ITES, the figures put out by global consultancy firm McKinsey paint a completely different picture.
The reason: India is low on cost but high on quality with abundant supply of skilled workforce. But more of it later.
Sample this: A 24-year-old boy working for EDS (Electronic Data Systems) in Mumbai, answering mails and calls of customers half a world away, gets paid $1.25 per hour, while his counterpart in the US would take home $10 for putting in the same amount of time doing the same work.
A programmer in the US earns $68,640 a year, while the same job in India pays only $6,500. On an average, tech workers in India earn $4,500 a year compared with about $45,000 a year for workers doing similar jobs in the US. As Grove says: "The engineer sitting 6,000 miles away might well be in the next cubicle."
If this was all about India's prowess in software services and its global delivery model getting accepted worldwide, then here is more good news for the ITES segment. India is way ahead of China with low-cost qualified workers for this segment, according to McKinsey.
If it costs $2.50 per hour to employ a person in a call centre in Shanghai, it costs just $1.50 in Mumbai. And that is not the end of the story.
If the number of qualified workers available in Shanghai for customer call centres is between 6,000 and 7,000 per year, in Mumbai it is between 35,000 and 45,000.
Not to forget that we haven't even got into Bangalore, Chennai, Hyderabad, Kochi, Delhi, Noida and Gurgaon and it is just the tip of the iceberg.
Incidentally, Manila with 9,000-11,000 qualified workers available per year is the lowest with $1.47 per hour, while Kuala Lumpur with 6,000-7,000 available workforce per year pays $2.19 per hour.
It is not just the call centre jobs where India has an edge. Be it in back office functions of finance and accounting or electronic document conversion, India is way ahead than its competitors. From availability of qualified workforce to costs, India leads the way with China a distant fourth.
If back office work for finance and accounting costs $1.35 per hour in Mumbai, it is $2.03 per hour in Shanghai. And as for the qualified workers available per year: 14,000-17,000 in Mumbai compared with 12,000-15,000 in Shanghai.
"When you can get the same job done for a fraction of the cost, it makes sense to export jobs," says a top official of a multinational firm in Bangalore.
BANGALORE: If IT bellwether Infosys Technologies brought the feel-good factor back again by spreading the cheer all around, then Intel Chairman Andrew S Grove topped it up by saying India and China are the key threats to the US dominance in the hi-tech sector.
But wait a moment. Even as Infosys has taken a big step to take on the Chinese on their own turf by deciding to open a subsidiary there, India seems to have a head start over China in the emerging IT-enabled services (ITES) segment.
For all the talk of China, the Philippines and Malaysia giving a stiff competition to India in ITES, the figures put out by global consultancy firm McKinsey paint a completely different picture.
The reason: India is low on cost but high on quality with abundant supply of skilled workforce. But more of it later.
Sample this: A 24-year-old boy working for EDS (Electronic Data Systems) in Mumbai, answering mails and calls of customers half a world away, gets paid $1.25 per hour, while his counterpart in the US would take home $10 for putting in the same amount of time doing the same work.
A programmer in the US earns $68,640 a year, while the same job in India pays only $6,500. On an average, tech workers in India earn $4,500 a year compared with about $45,000 a year for workers doing similar jobs in the US. As Grove says: "The engineer sitting 6,000 miles away might well be in the next cubicle."
If this was all about India's prowess in software services and its global delivery model getting accepted worldwide, then here is more good news for the ITES segment. India is way ahead of China with low-cost qualified workers for this segment, according to McKinsey.
If it costs $2.50 per hour to employ a person in a call centre in Shanghai, it costs just $1.50 in Mumbai. And that is not the end of the story.
If the number of qualified workers available in Shanghai for customer call centres is between 6,000 and 7,000 per year, in Mumbai it is between 35,000 and 45,000.
Not to forget that we haven't even got into Bangalore, Chennai, Hyderabad, Kochi, Delhi, Noida and Gurgaon and it is just the tip of the iceberg.
Incidentally, Manila with 9,000-11,000 qualified workers available per year is the lowest with $1.47 per hour, while Kuala Lumpur with 6,000-7,000 available workforce per year pays $2.19 per hour.
It is not just the call centre jobs where India has an edge. Be it in back office functions of finance and accounting or electronic document conversion, India is way ahead than its competitors. From availability of qualified workforce to costs, India leads the way with China a distant fourth.
If back office work for finance and accounting costs $1.35 per hour in Mumbai, it is $2.03 per hour in Shanghai. And as for the qualified workers available per year: 14,000-17,000 in Mumbai compared with 12,000-15,000 in Shanghai.
"When you can get the same job done for a fraction of the cost, it makes sense to export jobs," says a top official of a multinational firm in Bangalore.