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Reverse outsourcing; yes, it happens!

July 24, 2009

Digest this: The Indian industry contributed $105 billion to the US economy and created as many as 3,00,000 jobs between 2004 and 07, asserted the Indian Commerce and Industry Minister Anand Sharma during his address at the Synergies Summit of the US India Business Council in the US recently.

The minister’s statement was made on the basis of the findings of a recent study ‘Contribution of the Indian industry to the US economy’ by the India Brand Equity Foundation, which Sharma happened to release at the Summit.

Presuming that the source of this study is biased (An Indian agency), tune in to a September 25, 2007 (a little dated, and I accept that a lot may have changed between then and now) article by Anand Giridharadas in the New York Times that first reported on this reverse outsourcing trend: fresh American college graduates were happy in 2007 to turn down coveted jobs with companies like Google for an opportunity to work in an emerging economy, for instance at Infosys Technologies’ headquarters in Bangalore, simply because they realized that service action and opportunities for new learning have now shifted to the Asia-Pacific.

Infosys, incidentally is not alone in championing this drive for acquiring global talent. Tata Consultancy Service maintains a head count of nearly 5,000 workers in Brazil, Chile and Uruguay. Cognizant Technology Solutions, another Indian company runs two back offices in Phoenix and Shanghai, while Wipro, another Indian technology services company, has offshore centres in Canada, China, Portugal, Romania and Saudi Arabia, among other “low cost” locations.

globalizationBusinessFlow Reverse outsourcing; yes, it happens!

The logic in all these cases is two-fold: either to cut costs (if there is a substantial wage difference) or induct diverse skill sets into their fold. This indeed is the logic behind US outsourcing to India. And since there is no news of any job cuts by these companies in the US, one presumes that this logic behind this kind of reverse outsourcing continues to hold true even during the downturn.

“Some analysts compare the strategy to Japanese penetration of auto manufacturing in the United States in the 1970s. Just as the Japanese learned to make cars in America without Japanese workers, Indian vendors are learning to outsource without Indians,” reported Giridharadas in the New York Times piece, two years ago.
Recently, Pramod Bhasin, president and chief executive of Genpact, who is also the chairman of the National Association of Software and Services Companies (NASSCOM) told a Forbes Asia correspondent, “I believe that we should be hiring in the U.S. and thereby participate in its economic recovery. Several of our companies are already looking to create employment in the U.S. It’s the ideal time to get the best talent.”

This is a sign of mature thinking. Of Indians coming of age. Because, outsourcing in the final analysis is a democratic model. As a business model, it does not recognize color or creed. It’s also geography-blind. I would define it as a science of the free movement of services across geographies in a manner that maximizes profits.

And if that were so, what better time to outsource than now?

Related posts:

  1. Reverse outsourcing: Following in the footsteps of the Japanese automakers
  2. Decoding the lexicon: backshoring, reverse outsourcing, insourcing or rural-sourcing?
  3. Backshoring-Reverse Globalization
  4. Trouble with TARP
  5. When economics demand it, why give outsourcing a bad name?


Written by Radhika · Filed Under Outsource Blogs 

Comments

4 Responses to “Reverse outsourcing; yes, it happens!”

  1. Katherine H. Ray on February 15th, 2010 8:47 am

    Do you have any jobs for people on disability that they can do from their computer from home?

  2. Steven Knutson on February 15th, 2010 10:55 am

    How do I get involved in reverse outsoursing? I am unemployed and need an income – can work from my home in colorado.

  3. admin on February 16th, 2010 7:25 am

    Hi,
    You need to search in job portals to find opportunities for your skills. This site provides only news, analysis, blogs about outsourcing. Good luck in your job search
    -Admin

  4. admin on February 16th, 2010 7:26 am

    Hi Katherine,
    You need to search in job portals to find opportunities. This site provides only news, analysis, blogs about outsourcing. Good luck in your job search
    -Admin

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