post Tuesday April 2, 2013
As offshoring continues to expand in manufacturing to China, the counterpart of this shifting of activities in business services is India. Since the late 1990’s millions of European and American jobs related to Information Technology (IT) services and business-process outsourcing (BPO) have been relocated. These two subsets of offshoring have seen the most job growth. The first major projects sent to India related to the potential “Y2K” bug that was projected to affect millions of lines of code throughout a wide range of computer systems. The types of “back office” services that have been relocated to India are typically assumed to be done with lower costs and equally efficient labor. The lower costs and ability to easily transfer the work contributed to the large expansion of the number of companies either providing or moving these types of jobs.
The labor market located in India has evolved and developed. Recently there has been a sizeable increase in the number of “high-level” tasks that are being outsourced and offshored to India. One example is Tata Consultancy Services (TCS). TCS is a growing group of engineering and manufacturing consultants who are providing many more functions to large U.S. and European companies than answering telephones and handling warranty claims. A great deal of problem solving and engineering jobs are being shifted to India.
Hackett, a consulting firm that specializes in outsourcing, reports that between 2002 and 2016 roughly 2 million European and American IT and BPO jobs will be relocated to India. These jobs are primarily IT, finance, human resources and procurement. Hackett also estimates that this increase in offshoring will begin to subside as a result of a variety of factors. One factor is rising labor costs combined with increasing inflation. The gap between service costs in the United States and Europe compared to India is also decreasing. If current trends continue it is likely that there will be a sharp decline in the number of jobs that are relocated to India in the coming years.
Source:The Economist
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I have just discovered the IPR Plaza, and reading extensively before making a logical comment in relation to this all important topic.
Geplaatst door Gabriel Nmah, Sr. op Saturday 6 April 2013
I have just discovered the IPR Plaza, and reading extensively before making a logical comment in relation to this all important topic.
Geplaatst door Gabriel Nmah, Sr. op Saturday 6 April 2013
