Dell Computers was among one of the earliest computer companies to outsource services and technical support calls to India. In 2001, Dell set up its first call center in Bangalore and opened a second site in Hyderabad in 2003. Following closely in Dell’s footsteps, Microsoft announced that it too was starting to shift U.S. based jobs to India as it sought to lower technical support and development costs.
So you would think that this expansion in India’s economy would bring robust job growth, higher wages and a higher standard of living. Unfortunately, growth does not always equal prosperity. In fact, according the National Commission for Enterprises in the Unorganized Sector (NCEUS) an office of the Government of India, “The annual growth rate of employment declined to 1.85 percent from 2.03 percent between 1993 and 2005″. Equally alarming was the finding that the growth rate of wages under all categories of workers, including casual laborers, also declined during the period under review.
So with all of this growth in the technical sector, why did jobs, wages, and the standard of living continue to fall during this period? According the NCEUS official report, one significant factor was that while 2 percent of the workforce benefited from this influx in investment from high-tech companies, the other 98 percent or 600 million people in the labor force still operated in extremely poor working conditions. The report suggests that many people currently in the labor force lacked the necessary access to credit, technology, marketing, skills and incentives. Apparently, India’s infrastructure is so dilapidated that education, resources, and goods and services cannot be accessed or routed efficiently. The result has been a decline, not growth, in the overall job market and wages in India.
A large part of the problem with India’s ineffective infrastructure is due to governmental corruption. Often, valuable resources are diverted or not efficiently allocated to resources such as roads, highways, electrical grids, schools and urban infrastructure. The result is an inefficient and outdated system that cannot handle the demands necessary for sustainable growth.
It is probably not surprising that in 2004, Dell decided to begin rerouting its large and medium business support work out of India and back to Austin. While some of motivation can be attributed to cultural and language barriers, other factors included the lack of access to information and the educational barriers of the workforce necessary to solve customer issues.
So what can we learn from India’s economic boom with declining jobs, wages, and standard of living? You might ask yourself these questions. Am I currently building up the infrastructure of my company? If the economy was to gain momentum in 2010, could I handle the growth? Is my workforce educated or are they falling behind? What are the state of my processes? Do I have the right servers, network and software in place?
When the economy is moving, it can be difficult to address these structural needs. So take a moment to reflect, then look to the future with hope and ask yourself, what is the state of my infrastructure?
–Larry Vernon
No comments:
Post a Comment