30 March 2009

Have a Reason to Cheer - Indian IT

It is not even over a month that Mr Obama addressed congress and made a powerful voice against outsourcing. He announced the end of tax breaks to the companies that outsource jobs to other countries. Within a month, I hope, he understood the value that outsourcing creates to US. In the recent statement, Mr Obama, rewrote his words that he was not against outsourcing low-level, low-skill jobs. Is there a reason to say this? Are there any hidden agenda? I believe yes. The emerging markets like India have become no non-sense market place for MNCs because of their consumption power. It is that consumption power that made US, the super power and it is the same consumption power that is going to make India, a super power.

The consumption is so powerful and that is how Pepsi, Coke, Colgate and many other brands are making money. Thanks to globalization. If there is a policy decision against outsourcing, the other countries where the jobs are outsourced will also make some policy decisions against these MNCs. Without outsourcing, the existence of these MNCs is Win-Lose proposition with emerging economies in losing side. I hope that the business organizations in US have understood this and this is right time for the policymakers in emerging markets to keep a watch on the developments. Also, with the current economic slowdown, MNCs will not be able to withstand any further blow. When the economy recovers, the stand on outsource will become irrelevant. Even in the current climate, the US companies wanted to push some "risks" to high value & risk taking Indian companies. So, the outsourcing helps to diversify their risks. :-)

Overall, apart from direct benefits, the outsourcing leads to a lot of flexibility and this flexibility is quite essential for all developed nations, not only to the US. So, moving forward we will see the dilution in "stop outsourcing" slogan and this will be done or can be done as a lip service.

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