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March 24, 2004
Outsourcing - Japan, India, China, US
Two talks covered different aspects of the international outsourcing issue.
Discussing the history of US outsourcing to India was Rafique Dosanni who called in from India where he is doing his latest research. In short, he detailed how India would like to climb up the value chain in software development all the way up to ownership of whole product, but cross-cultural issues continue to stem this possibility.
One clear example he used of outsourcing that was sure to occur on a massive scale in the next few years was call centers. 6 million Americans are currently employed at call centers with an average hourly wage of $8. In India, the average hourly wage is $2. When asked if this would hurt the US economy he commented that it definitely will if these workers don't have the opportunity to be retrained for a new line of work. With the average call center worker in the U.S. having 25 years of experience compared to 3 years in India, he suggested that it might be hard for these workers to easily motivate to get retrained.
Exploring the outsourcing of Japan software to India was Geoff Walsham who made the point that even though Chinese software engineers are 1/3 the cost of Japanese programmers and India's are one half the price of a Japanese software engineer, Japan still prefers to outsource to India. The reason, India has a better grasp of the media technologies and better toolsets. However, looking forward he suggested this would change, especially since the primary second language that Chinese programmers are now learning is Japanese. This gives new meaning to what goes around comes around.
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