Magnifying reality

DQW Bureau
03 Jul 2003
New Update


Outsourcing backlash will die a natural death-that's the expert opinion. Ask the guy who lost his job.

At the recently concluded ITeS-BPO seminar organized by Nasscom, almost every speaker in the inaugural session touched on the backlash issue. The message was common-It is not very big. It will die down. It is media hype. 

That there's some backlash is not surprising. When you occupy centerstage, you get bouquets. You also get brickbats. People on the sidelines do not get either. The debate is about the magnitude and the likely impact.


Interestingly enough, the subject has more coverage in India rather than the countries it is supposed to impact-mainly the US. Maybe because any challenge to India's pride-as measured by the software success story-becomes a bit of an emotional issue. After all, we have a few rocks of pride to stand on - The Taj Mahal, Sachin Tendulkar and Software. So is this reality magnified?

Here are a few cuts from conversations that one has had over the last few days.

l Many feel the backlash will go away. After all, of the 700,000 IT-related jobs that have been lost not too many could be because of off-shoring. India never sent that many people over nor have so many people been employed here. Most of the job losses have been due to the economic recession and not offshoring of jobs.


l There are analysts like Forrester Research who predict that over the next 10-odd years, 3.3 million white-collar service jobs would move offshore taking with them $136 billion in wages. That sounds scary to the average worker. The counter argument is that in any case economies like the US are going to have a shortage of working population to the order of 4-5 million over the next 15 years. So what is the problem? There will be no people to work so jobs will emigrate. And now that we talk of globalization, how does it matter where on the globe are the jobs located? Maybe Americans can come to India to take up jobs if they have too few in their own country. After all, if Indians can go work in the US, why not the reverse?

l If the backlash dies down, will it leave scars? Like lower rates, longer gestation periods for decision-making, outsourcing only the essential, setting up of captive units in India rather than giving out jobs... Not really, goes the counter. 

l Those in touch with political establishments say outsourcing bills being introduced will never see the light of day. Plus, they apply only to government contracts. A majority of off-shored work doesn't come from there. So it is safe. These are political gimmicks. Politicians in India and the US are the same. Believe anyone but not the US politician, says someone. Why does that sound familiar?


l Actually, this debate is useless, argues an analyst. Offshoring helps the economy grow by saving costs. That creates investment and new job opportunities in the long run. The counter is-Sure does, but what do I do today? In the long run, all of us are dead.

The arguments -- and counter-arguments -- are endless. There is a more than even chance that the issue will down and leave only superficial scars. There's a huge economic benefit involved and that will eventually override other concerns. The longer working hours due to different time zones, labor arbitrage, the two heads for one that you get in India are compelling arguments.

There's one problem with all these compelling arguments.


Commercial logic is being used at the macro-level. That doesn't solve the real issue -- emotional trauma at the micro level. The individual who loses a job and faces the trauma because of that is unlikely to buy logic easily. Numbers and feelings do not share a common language. All logic dissolves in the face of joblessness. 

Mind you -- emotional issues are not the exclusive preserve of the Americans. Logic did not demand that KFC shut down in India because there was a fly in their kitchen. Logic does not demand farmers commit suicide because of new types of cotton. Let's face it-we have, had our emotional issues. The Americans are having their's. The only way to handle problems at the individual level is with compassion and care. Not logic. Of course, time is always a great healer.

Shyam Malhotra

The author is Editor-in-Chief of Cyber Media, the publishers of Dataquest.