Outsourcing, a resilient valiance or mistake of capitalism!

A few weeks ago I received a query from an online blogger, who helped create a video slide presentation, “Why OUTSOURCING  is bad for Business”. The presentation did make a good case about why outsourcing is affecting adversely the interests of the businesses that are based on such. Here is the link of that video article

{Thanks to Amy Clark, the period at the end of the link that failed the link to guide you to its destination has been removed without impunity, happy reading}

Amy Clark contacted me as I had written an article on Outsourcing barely a year ago which she spotted in the just-linked website, also available as scrapping outsourcing .

That was a small article and I happen to recall I also have written an article on science being outsourced although that is not a financial outsourcing paradigm. Since we talked less than 3 weeks ago we have exchanged a few emails and I thought I could write something more on outsourcing based on perhaps their video.

Caught between several layers of difficulties such as bad Internet to bad health I would like to embark on to this as I had promised. But I must warn ya’ I am not at all an expert in matters of finance although given to my background of maths and science and travel and large scale efforts I am tempted to write something. So I gave her the words I would write something regarding the Indian side of the outsourcing.

So here it is.

The western media especially where outsourcing has supposedly hampered local businesses are up in arms against the economic reed called Outsourcing. One prominent such economy is the United States where I have lived for close to a decade if not a complete cycle. The US media in recent several years after promoting the Outsourcing regimes started being wary of such. Such a paranoia has cut across social to political to academic circles. But if I recall clearly such a response gained more ground only after the economic recession. If someone provides me with convincing levels of discourse from economic capitols like wall-street to be actually of the cultivated opinion in terms of easily consumable data such as a data-plot, I will change the following belief of mine that its merely a blemish tendency that OUTSOURCING has hampered every other business across the nation shrinking to insignificant proportion the interests of National or International players.

Since Outsourcing is a business process its completely out of question, especially after multiple of decades of such practices, that one side of business will suffer magnanimously while another side is making Arabic Wealth to its banking deposits. In other words the fact that a business is a two way process there is certain minimum profit to the partners. Some proponents also propose that greedy capitalists of US {and else where in the world in consonance with their counterparts or business partners} have exploited the outsourcing alliances to severely reduce the employment only in the US which is based on the inherent presumption that lesser economies have been working at reduced perks for the same job an American would find a paltry sum. I think while this is generally true as an economic phenomena its got nothing to do with Outsourcing, such conditions exist without any specific practice of business. The life-factors or even basics are far superior at times  in the USA. {not necessarily, only in an average sense, and read the linked article of mine why lion share of outsourcing goes to a very selected few}.

The life-factors in countries like India has steadfastly increased in last few decades, but this is not necessarily due to Outsourcing but also due to internal mechanisms of Indian business societies. There are far too many billionaires and millionaires who can push their firepower to bring marvelous changes in economic conditions of a large section of people, there are a couple hiccups here. 1. This is not necessarily related to Outsourcing but local business of all sorts of commodities. Only the branding practice has changed cosmetically. 2. Indian employed mass does not get very upset about what the market conditions are. They take the challenge for several years in many cases decades before they can make mullah for themselves and those who can’t are out.

I have friends who are not in outsourcing business. They worked with paltry sum of 60 $ a month after very high and expensive education and through their sheer efforts ran up the ladder to level of 3000 US $ a month last I kept record was 3 years ago. And these are not outsourcing company but companies like hospitality or pharmaceuticals. They did not complain or they were going to see the exit sign, I have tons of acquaintances who went up this ladder. Many people have become very sound financially with local businesses alone and to count there really are not many outsourcing giants working in India as goes the hype. I will give an example.

About two years ago I brushed close with a job in a ferociously fortune-10 of the world company who wanted to hire me. The prospects were very suitably measured from both sides. I did a search on web which gave me their inside-trade-reviews. Its one of the American, world-fortune-10 company which for the exact same role at exact same qualification pays 12 times higher salary in California than it does in Indian metros. With the same system you have to work on and same qualification called for, this outsourcing machine, apart from other life-factor-issues that are far superior on an average in California than in India, pays 12 times less in India. Thats an unheard paradigm, and not a very well known factor. The sum they spend for their R&D is meager. On the other hand local companies in India pay to anyone in their payroll competitive salary in par with what one could expect for such a job in US, with same quality of infrastructure of business.

So why not American Outsourcing companies or local companies of America for that matter first modulate how they look at people from different social background, this will take off unjustified and prejudiced work environment and bring more employment for Americans as well if they are willing to work in countries such as Philippines or Thailand or India. Certainly their jobs won’t be hampered despite of the outsourcing practices. Its the practices and not the concept of outsourcing which is hampering any prospects lopsidedly. And once the world learns American companies could actually extend unjust work-condition to people from OTHER backgrounds they will also say the same thing about the practices and not the Outsourcing concept itself. {that their economy was adversely affected due to outsourcing, but why not now despite of lower grade compensation? Because they aren’t seeing the complete view and are putting up with what conditions are available and working through the ladder}

The super layers of Asians or Indians, that actually are famous or rich in USA are the kind that actually lived in advanced countries for several decades. You hardly see graduate students driving BMW. But the American folks have a spendthrift attitude as well. Of-course its none of my problem, and to much extent I may or may not be so. But I am only pointing to a habit of saving rather than just spending. Many dark stories of 2008 when recession showed up everywhere we read horror stories on wall-street. One guy who had a mansion to live in works as a waiter pretty soon as he lost his job and had to pay back his credits. His friends were eating up in the same place and were shocked to see him serving. But thats just recession and not Outsourcing.

Much of India’s wealth did not come from Outsourcing but traditionally India has been a very rich country until last few 100 years when its wealth were plundered by its rulers. To add to India’s depression the population went 400% in a matter of 50 years after 1947 when Republic of India vowed to change its midnight culture, we thought since we are independent we can actually do anything including increase our population and have as many kids as we wish, we are truly innocent people. Who could have planned such demise except the statesmanship of leaders that we had. USA is also blessed with such self-aggrandizing capitalists. Who forgets Enron or Lehman Brothers?

American economy itself is to much extent one of immigration and outsourcing. Why the wild-cry? The African exodus that supplied the Americas its human resources for centuries is one of the most widely known forms of outsourcing.

I think America like in the great depression has evidenced it buckled up and showed itself to be a resilient economy, wraps up now or weep in blemish excuses that the same business activities that has supplied its nationhood power and valiance is to be considered a bane.