Please post all links, statistics for articles that can be used to make good arguments against the BPO backlash.
Thankyou.
Admins : I thought one source for all such links would help in countering the propaganda doing the rounds. I came face to face with a jerk last week who was whining that US jobs are going to US. But if you think this doesnt deserve a separate thread please feel free to close it.
And here's the response sent by a good friend:
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Cringley's attempt to be what he is passionate about is just fine , and a wee bit amusing . Point by point , the defence :
1. India does have 50% of the worlds SEI CIMM operations, some add on PCMM and Sigma Sixes too, and Cringley would do well to contact Carnegie Mellon, Motorola etc who authored these ideas as to what they can actully do to a process. More bad news for him, the busiest phone lines in UK, the British Rail, 50% will ring in India soon . Got cousins , should ask them why here, and why not Ireland, Scotland, Philippines, Outer Mongolia or Iowa.
2. India is indeed a very poor county. A vast majority of us live below $2 per day and it really pains my heart as they are all over so unavoidable, and no faulting them . The match up with US is , GDP per capita $35,060 : $480 , a ratio of over 73: 1, needless to say who the winner has been and will still be for decades to come . And we know here that the credit for this misery goes more to our politicians than the West. US has generously provided about $3m in aid to India this year , a few hundred million to Pakistan and billions to Iraq , Afghanistan, Israel, Egypt . For years .Excluding Pakistan all have much higher living standards than India. The whole of Africa gets lesser than these most deserving aid-dope happy countries do. I think Bill gives more here than the US as a country as do many other charities.  I am not talking per capita official aid here at all , we all can divide a generous $3m or even a $ 300 m by a billion. We are definitely waiting to see the magic of miniscule fractions work for us work here.Seems like homeopathy to me . One would have to present arguments from Marx and Angels or read from the economic handbook of the Soviet State Mangers on "managed international trade the third decimal"  as he suggests be practiced with India types .Would the forum allow such extreme thought provoking arguments, just to give the right of rebuttal to some of us here . Simply put, and no ideology BS ,  India still runs a trade deficit with the world .And trade we think is about buying at the best price and not about balancing books with each supplier . Ask any corporation. The US investment money comes here on economic and not philanthropic considerations . India has received much less of US or world investments than China, though is just about one America less by way of population. Calculations say provides better ROI . The US indeed faces a problem with China.. The investment is creating a huge cheap export base money that threatens every other economy too , and money on money returns are awaited . This generosity  feeds the likes of Wal-Mart, and that I presume is the Big Bad Store is the subject of another blog here. My advise would be to not to do any thing stupid to anger the Chinese as they having taken in billions in investment do take in $250 billion in imports as well. Knowing US has no way with them , are very likely to talk back if lectured on socialism and protectionism. Believe in 2 Tits for a Tat diplomacy . Can and will hurt US investments on their soil. We ( Indians) do manage a slight trade surplus with them, but is a very recent development . As the article seems to be mostly in the "emotionally logical" genere, Mr. Cringley calmly forgets that the tech Indian worker in US come from a poor country where the education is highly subsidized at the cost of essential social services.They then leave to study further,  work, spend, pay taxes and social security most of them in US. And as most don't stay the required years the social security is not refunded, but pays for the dentures of some aging American. As some of the present hullabaloo we are told is said to be election year rhetoric, Will it be appropriate to say, as we Indians in the US are not a vote bank large enough, like the illegal Mexicans for Mr. Bush, we need not be given easier terms for work permits even where there is a desperate need , much less treated as citizenry as haven't crawled under the fences .We shall as we do continue to compete with all others for the declining but still available work visas. I am not getting into the ridiculous idea of demanding a compensation for the subsidies we $480 earners left behind here have paid to educate them and are deprived of their productive output,  as the system here has failed to keep them interested and properly utilized , if they were to stay, as a majority of us still do. Or for that matter ask for a refund from the US of the unused social security, or mention the fees the US universities earn from some of them,  Indians now being the biggest foreign student group some universities do need them to keep going . Gets too messy and is a difficult a computation as well , may even be considered a ridiculous divisionary track by an emotional, and passionate person, which I admit I am about the rights of an individual over political and nationalistic whims.
3. Mckinsey's analytical methods too have at times proven inadequate at times , but it amazes me why today US needs nurses, teachers, even PhDs specially in the mathematical and technological disciplines and Americans don't apply ? Is it that the work is a wee bit harder or the ROI on advanced education lesser ? It also amazes me that America has no cheap household help, eat out of tins or do take always. Come home to the cleaning and washing after a hard days work , and the weekend is meant for the bushy grass . I sure earn less than a fifth of what I would earn in US . But in less than $100 per month a few household workers keep my life easy. They clean, cook, wash , make bed, iron, run small errands, call the plumber, electrician, water the plants . Surely there are no Americans wanting these jobs in US either, like the nurses and PhDs , and if you had them available at market driven rates , you would have a life as good as mine. Iwould further , I don't employ child labor, pay strictly market rates , and to me is like a monthly outsourcing contract of house jobs so that I can do more of what like . I am as they say in China , am a "Capitalist Pig" looking for a better "QOL" .
4. I am no futurologist, but do remember reading some where that some time back that the knowalls thought a few computers would suffice for the whole world. The "differentiator" argument is interesting but competition and ingenuity are always at work, so one can never be sure to have found one. Have yet to hear of a lasting man made differentiator. When Mr. Cringely or any one else discovers it, or discovers a way to discover it, no need to tootle the horn and administer a lecture to the merciless economic forces of globalization or the poor attempting to get out of their misery thru plain old hard and smart work , just patent, trademark , register it, use it . The proven pudding thingy.
My own suggestion would be lets see if we can use the possibility to our mutual advantage . Let's exchange our young , educated, entrepreneurial for your rusty and the nasty. We may be able to build cheaper prisons here, and a $1000 dollars a month will keep the old Pa & Granny in a villa in the salubrious heavenly Goa or a lush Kerala. Really healthy well cared for and best of all no guilt . Doctors are cheap and world class , medicines are cheaper and USFA aproved , nurses are a plenty, household help limitless, only there are no takers. Yet.
<!--QuoteBegin-rajesh_g+Feb 9 2004, 07:28 PM-->QUOTE(rajesh_g @ Feb 9 2004, 07:28 PM)<!--QuoteEBegin-->I came face to face with a jerk last week who was whining that US jobs are going to US<!--QuoteEnd--><!--QuoteEEnd-->
I trust you mean as to why the US jobs are going to India? If yes, ask him as to who is sending those jobs to India - a Indian manager/CEO or a American manager/CEO <!--emo&--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->
More later.
I think the Indian English media has a large part to play in the 'BPO backlash'. The Economic Times website has done nothing for the last couple of months but sensationalize all the newsreports relating to the issue.
There is a growing discontent in the United States about the very very skewed trade balance with China. What did China do? it acted by buying $2 Billion worth of Boeing jets and made other trade concessions. Of course the media was clipped to not report too much, if at all, on the issue.
While not drawing comparisions, the Indian English media has done nothing constructive in the whole issue. The idea is to find ways to minimize the discontent it, and not give it lots of airtime.
The Economic Times for example has all these news stories peppered with all the expletives that some american people use for Indians. Do we need to know that? If we do, how many times?
As for the IT jobs that India is gaining, we have nothing to feel afraid or ashamed of it. We have deserved it with our hard work and efforts. The US wants globalization, hell yeah we will give them globalization.
Globalization does not only mean that American MNC's will spread out and buy businesses worldwide and kill local industry. It is not a one way street, as the American Foreign policy would like to believe. And it is more true in this century when the 'third world' seems to be making a resurgance.
And now that the developing world is standing up in the arena, the American industry start whining.
<b>WASHINGTON: President Bush and his administration have reiterated their commitment to free trade, including explicitly backing the idea of outsourcing to countries such as India.
In his 412-page "Economic Report of the President" transmitted to the Congress on Monday, Bush presented an upbeat prospect for the US economy this year, including creation of 2.6 million jobs and a 4 per cent growth.
But as far as India is concerned, one particular paragraph in the voluminous report will provide great reassurance to a section of the economy. It pertains to outsourcing, the hot button topic of the day, and here is the Bush mantra on the subject in Chapter 12 titled "International Trade and Cooperation."
Specifically referring to India as an example of an outsourcing destination, the Bush report says "when a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically."
With that commitment, the Bush administration has effectively thrown its weight behind outsourcing at a time when the several Democratic contenders and sections of the media are beating up on the idea in the face of economic troubles and due to election posturing.</b>
Had read an article on rediff that gave some numbers on how small the outsourcing mkt really is and what a monster we have made it out to be. if someone has the link to it then maybe we can post it on this thread.
What's gotten into Lou Dobbs? Once a sensible, if self-important and sycophantic, CNN anchor, he has suddenly become a table-thumping protectionist.
Dobbs has been running a series -- praised by the AFL-CIO's Rich Trumka as a "nightly crusade" -- called "Exporting America." Slanted and inflammatory, it decries "outsourcing" or "offshoring" -- that is, U.S. businesses using suppliers in other countries, like workers in Ghana processing New York parking tickets or programmers in India writing IBM software.
Another word for outsourcing is "trade" -- an endeavor, as economists learned early on, that benefits both parties to the exchange.
Nothing has changed since Adam Smith wrote in 1776: "It is the maxim of every prudent master of a family never to make at home what it will cost him more to make than to buy."
Still, writes Julian Sanchez of Reason magazine, "Free traders are trapped in a public policy version of 'Groundhog Day,' forced to refute the same fallacious arguments over and over again, decade after decade."
While trade can cause pain to some workers, lack of trade causes far more. Imagine if software firms did not search the world for the best labor at the best price. Consumers would pay more, and shareholders would have less to reinvest, which would mean fewer jobs for Americans.
Or imagine if Japan retaliated by taking its plants home. With 13,000 workers, Honda is the largest private employer in central Ohio. <b>As for India, outsourcing helps lift a nation out of poverty and creates markets for U.S. goods and services. According to a study by the McKinsey Global Institute, of the $1.45 of value created from offshoring $1of U.S. labor cost, "the U.S. captures $1.12," the foreign country 33 cents.</b>
Economists understand this, but, often the public sees only the pain. For that reason, opinion leaders have a responsibility to discuss trade in an adult way.
Unfortunately, demagogues dominate. Dobbs's website lists 250 "U.S. companies⦠sending American jobs overseas," as if they were wanted criminals. This rogues' gallery includes America's most innovative companies, creators of entire new industries, like Amazon.com, EMC, Google and Intel.
<b>The outsourcing uproar is occurring as the U.S. unemployment rate last week dropped to 5.6 percent, lower than the average during the 1990s. Growth is a robust 4 percent, inflation is low (partly because trade depresses prices), and the Institute for Supply Management's closely watched Manufacturing Index is at its highest level since 1983. </b>
Yes, manufacturing jobs are declining as productivity rises, but that's a decades-old trend. There were more factory jobs under Nixon than under Clinton. Outsourcing mainly affects tech and professional workers, whose jobs at home are now increasing as the U.S. economy recovers. <b>Forrester Research estimates that outsourced jobs will rise to 600,000 by 2005 -- out of a total of 140 million. Hardly a menace.</b>
In fact, the main strength of the U.S. economy is what Joseph Schumpeter called "creative destruction." Just 75 years ago, farmers were one-fourth of U.S. workers; today, they're one-fortieth, but they produce far more, and agricultural products are a big net export. Would we be better off with 30 million more farmers? It's our labor flexibility that has helped the U.S. boom. It's a big reason our GDP is greater than that of the next five countries combined.
<b>As Fed Chairman Alan Greenspan noted last month, "A million American workers⦠currently leave their jobs every week, two-fifths involuntarily.... A million, more or less, are also newly hired⦠every week." He added, "This process is not new," and we "can be confident that new jobs will replace old ones, as they always have."</b>
It is government's role to soften the blow through aid and retraining -- not through the restrictions pushed now in Congress. We don't want to turn the U.S. into another Germany, where rigid labor rules have helped increase unemployment to 10.2 percent.
Unfortunately, Dobbs and xenophobic politicians are out to kill the goose that lays our golden eggs. Sen. John Kerry, in his stump speech inveighs against the "Benedict Arnold CEOs [who] send American jobs overseas."
<b>By the way, the Kerry family business, H.J. Heinz Co. of Pittsburgh, <span style='font-size:14pt;line-height:100%'>operates 22 factories in the United States and 57 in foreign countries.</span> I don't think that Kerry should shut down The Heinz 57, but he might drop the rhetoric and talk about trade responsibly. He should support, not trade's contraction, but its expansion, like George W. Bush, Bill Clinton and every president since Herbert Hoover.</b>
Sending jobs overseas is inevitableâand might even be beneficial.
FORTUNE
Monday, February 9, 2004
Seldom have so many had such strong opinions about something they understand so poorly.
The topic is offshoringâand the anger over it is hard to avoid. Politicians are shocked and outraged at the prospect of U.S. service and back-office jobs going to places like India. Democratic presidential candidates condemn offshoring and blame it on George Bush's policies. Economic Cassandras warn that as many as ten million U.S. jobs could be at risk. New York Democratic Senator Charles Schumer recently co-wrote a New York Times op-ed confessing that because of offshoring, he's doubting the whole concept of free trade. Legislators in Washington, D.C., and a number of states are pushing to restrict offshoring. Indiana's governor this past fall canceled a contract to pay India's Tata Consultancy Services $15 million for processing, ironically, state unemployment claims. The next-highest bidder, a U.S. company, reportedly wanted $8 million more for the same work. When you're willing to pay a 50% premiumâwell, that's real anger.
Or is it just real stupidity? The fact is, we can't stop offshoringâand we shouldn't try. For all the handwringing, offshoring is inevitable, frequently makes business sense, and might even be beneficial. A recent study by the McKinsey Global Institute, an economics think tank, calculated that for every dollar spent on a business process that is outsourced to India, the U.S. economy gains at least $1.12. The largest chunkâ58 centsâgoes back to the original employer. But there are many other benefits. For instance, 30% of Indian offshoring is performed by U.S. companies, so money returns home as earnings. Additional benefits accrue from freeing U.S. workers to do other tasks. A good example is the much-fretted-over idea of sending X-rays to India for analysis. Diana Farrell, the institute's director, says doing so reduces the cost of health care and can free up money for medical innovation.
By focusing on India, politicians are ignoring basic economics. Job turnover, after all, is a sign of a healthy economy. The U.S. has lost two million jobs due to global trade over the past 20 years, says Farrell, but in just ten years has added 35 million new jobs. Many of the same jobs politicians are trying to protect may end up disappearing anyway, as automation in business intensifies. Michael Fleisher, CEO of the Gartner research firm, put it this way at the recent World Economic Forum in Davos, Switzerland: "Much of what's being outsourced using technology today will be completely eliminated by technology tomorrow."
We need to rethink our views on the global workforce. First, we should realize that the boom in part proves how much the U.S. economy achieved in the roaring '90s. Nandan Nilekani, CEO of big Indian outsourcer Infosys, pointed out in Davos that American technology companiesâthink fiber-spewing Global Crossingâmade Internet-driven outsourcing possible. In addition he notes that the U.S. for years has pushed nations like India to free up their markets; now we're just seeing the result.
The U.S. is helping the rest of the world work its way into wealth. That is in all of our interests. And it isn't a zero-sum game. American productivity, again fostered largely by intelligent use of technology, remains the highest in the world. That's likely to ensure we stay wealthy.
Nonetheless, displaced workers have legitimate gripes. What they ought to be demanding is not an end to offshoring but better education and retraining to compete in a global marketplace, as well as social programs to cushion the blow of inevitable job losses. Increasingly in the Internet Age, we will all rise, or fall, together.
Can anybody point to the intial oppositions to this outsourcing episode and how it started , like biased news articles on the "dangers of outsourcing", columns editorials etc , i thnk somebody started this and it did'nt start on its own, i think its the chinese or even paki's(but doubt they are this smart)<!--emo&:o--><img src='style_emoticons/<#EMO_DIR#>/ohmy.gif' border='0' style='vertical-align:middle' alt='ohmy.gif' /><!--endemo-->
like to know why manufacturing which traditionally employ more percent of workers than services did'nt create this fuss while shifting wholesale to china?? <!--emo&<_<--><img src='style_emoticons/<#EMO_DIR#>/dry.gif' border='0' style='vertical-align:middle' alt='dry.gif' /><!--endemo-->
<!--QuoteBegin-rhytha+Feb 17 2004, 01:18 PM-->QUOTE(rhytha @ Feb 17 2004, 01:18 PM)<!--QuoteEBegin--> like to know why manufacturing which traditionally employ more percent of workers than services did'nt create this fuss while shifting wholesale to china?? <!--emo&<_<--><img src='style_emoticons/<#EMO_DIR#>/dry.gif' border='0' style='vertical-align:middle' alt='dry.gif' /><!--endemo--> <!--QuoteEnd--><!--QuoteEEnd-->
Rhytha: Manufacturing sector has been complaining for over a decade about the loss of jobs in US. Even remember right wing politicans like Buchannan taking up their cause during Presidential elections of '92 and '96.
Remember reading a report published by Morgan Stanely about a year ago that this recent recession was the first in US history in which the service sector was hit pretty bad.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->like to know why manufacturing which traditionally employ more percent of workers than services did'nt create this fuss while shifting wholesale to china?? <!--QuoteEnd--><!--QuoteEEnd-->
When I came to US in early 90s, there was backlash against Japanese cars and goods. Japanese were buying Hotels and properties all over US. Don't know what triggered recession in Japan but now no one talk about Japan.
Then started Nafta, manufacturing jobs started moving to China and Mexico. It started same story again. Some people don't like receiving goods made in China. Lot of them don't buy made in China goods. Quality of stuff in stores is very low as compare to 10 years back, but it is cheap.
Now it is Indiaâs turn. Initially it was H1 visa now outsourcing.
Media contribute lot towards hatred. Worst comes when all channels start singing same story on and on.
Atleast, they donât show frequently, India as country of snake charmer or elephant on street and slum of Dharvi as India.
It is frustrating but no choice.
There is something i do not understand here.
In a capitalist economy, the consumer is king. So when we provide offshoring services to business houses in United States, we are providing services to a customer who demands them.
So basically, it is the customer who wants those services, and he decides where and from who he wants them.
So am i to understand that the US Government wants Indian companies to stop providing outsourcing services when their companies come to them?
So the US Government wants to go after the foreign service provider, which in this case is India, and not say anything to the American companies that go in for offshoring?
This is an election year so watch for sorts of gimmicks to shift the blame elsewhere. Even Kerry has come out saying that we don't need "Benedict Arnold" type CEOs who are sending jobs overseas.
People are loosing jobs at record pace while economy is improving and the productivity numbers are going through the roof. Listen to any analyst on CNBC or Bloomberg etc and you'll hear that the economy is coming back but the jobs aren't. Unlike previous recessions-recovery, so far the recovery has been job-less. The FUD (fear-uncertainity-distrust) factor combined with election year politics will only fuel this paranoia.
No one bothers to ask the CEOs who are sending the jobs offshore the reason for doing so. Everyone is happy-pappy knowing that the stock market is going up and the quarterly earning numbers are meeting expectations and the gulible once trust whatever crap a politician says or one reads in media
Check this article, bit lengthy (might be a bit off topic) that will illustrate the kind of pricing pressures business owners face.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. <b>Are we shopping our way straight to the unemployment line?</b>
<!--QuoteEnd--><!--QuoteEEnd-->
Also............
As a IT networking lead elsewhere, this is just one of the sample letters I have received from a prominent newspapers - have about 5 more (certain personal details edited).
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Hi xxxx,
   Thanks for all the help in the past, which is why I'm turning to you again. Among your members, is there anyone who is fairly confident that he or she was laid off because a job went to India? We're working on that story now.
Jxxx
Jxxxxxxxxx
The Philadelphia Inquirer
400 N. Broad St.
P.O. Box 8263
Philadelphia, PA 19101
2xx-yyy-zzzz
<!--QuoteEnd--><!--QuoteEEnd-->
Please dont forget the technology revolution. Everybody was predicting that computers will replace people and people will be without jobs.. <!--emo&--><img src='style_emoticons/<#EMO_DIR#>/rolleyes.gif' border='0' style='vertical-align:middle' alt='rolleyes.gif' /><!--endemo-->
India should just keep low, hire good PR firm(s) and get the message across in an efficient way.. So far I have seen some good points to counter this negative propaganda..
1. Kerry's 57 Heinz factories..
2. 1$ of labour outsourced creates $1.12 value for the US and $0.33 for India or whoever..
3. IBM is hiring more because of outsourcing.
4. Technology will eventually replace people - already I have come across 1-800 numbers which are voice automated with "ok what do want" type systems.
5. computer appliances rather then servers with applications .
6. total outsourced jobs at end of 2005 => 600,000 out of a total of 140 million - hardly a big deal.
7. Alan Greenspan uvach => "A million American workers⦠currently leave their jobs every week, two-fifths involuntarily.... A million, more or less, are also newly hired⦠every week." He added, "This process is not new," and we "can be confident that new jobs will replace old ones, as they always have." I hope he comes out with something like "irrational exuberance" - he came up with that term to describe dot-com brouhaha. One candidate "illogical paranoia".. Graduate
8. $7 billion (?) cost saving for finance industry..
There might be some more that members might want to add ..
We should try and come up with some link between Dobbs and China. There has got to be something there. <!--emo&:unsure:--><img src='style_emoticons/<#EMO_DIR#>/unsure.gif' border='0' style='vertical-align:middle' alt='unsure.gif' /><!--endemo-->
Lalit Mansingh, India's ambassador to the US, has sought to allay fears that outsocuring of jobs by American companies to countries like India is a threat to the US economy.
Defending the business practice, Mansingh told his audience at the Joan Kroc Performing Arts Center in San Diego last week that outsourcing accounts for a paltry 200,000 American jobs while the country boasts of some 138 millions jobs. 'There is no need for panic," Mansingh as quoted as saying by the Union-Tribune Journal.
'By helping the US companies to reduce their labor costs while maintaining productivity, outsourcing helps the US economy become more efficient,' Mansingh said.
Outsourcing of information technology jobs, he said aid, is not a zero-sum proposition for the United States but 'a win-win situation for both countries.'
The Tribune report said quoting Mansingh that U.S. companies have spent $7 billion on outsourced work in India, including software engineering, data entry and customer service operations. Those companies, Mansingh said, have saved $26 billion in the process which they can invest in new jobs in the US.
Mansingh's remarks came on the heels of remarks by N. Gregory Mankiw, chairman of the White House Council of Economic Advisers, which prepared the Economic Report of the Presiden t. .
'Outsourcing is just a new way of doing international trade. More things are tradable than were tradable in the past. And that's a good thing,' Mankiw said last week.
Federal Reserve Chairman Alan Greenspan has warned that the growing movement to curb outsourcing, not just here in the United States, but also in other countries that seek to protect indigenous jobs from foreign competition, will have deleterious economic effects.
'I am optimistic that we and our global trading partners will shun that path. The evidence is simply too compelling that our mutual interests are best served by promoting the free flow of goods and services among our increasingly flexible and dynamic market economies,' he was quoted as saying by the newspaper.
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--><img src='style_emoticons/<#EMO_DIR#>/rolleyes.gif' border='0' style='vertical-align:middle' alt='rolleyes.gif' /><!--endemo-->