Wednesday, May 6, 2009

Does India have to be alarmed, or even worried, about Obama's Outsourcing Promise Kept?

I'm no economist but no ostrich either. This morning I bent my mind around the furore created by Obama's ending of tax breaks to U.S. of A companies that invest and create jobs abroad.

The way I see it, there is a fundamental law of efficiencies that governs ALL activity. In it's simplest form (the only form that I can understand, given that I do not have an MBA, not even a cheap, mass produced, mail-order, Indian one, let alone a fancy phoren one) this law, I think, works like this: Inefficiencies in any system are either eliminated or the system dies.

So, if by preventing the export of American jobs, Obama's measure leads to greater efficiencies in the impacted companies, then the universe is anyway unfolding as it should and the countries that temporarily lose those jobs will move on to find better products to sell to the world in order to prosper.

If on the other hand, as claimed by some experts, this is a retrograde move and American companies become less efficient because of this, then eventually American products will cease to be attractive and the world will stop buying them (Chrysler, anyone?). Again, the countries that were temporarily affected will eventually find their rightful space provided they still have attractive products to offer the world.

Either way, in outsourcing too as in all industries, there is a constant, inexorable tectonic shift towards ever greater productivity, profitability and what have you.

Even if Obama had done nothing, India would eventually find itself priced out of the market if it did not constantly chase efficiencies by, just for example, moving the BPO jobs out of locations like Bangalore (that are already pricing themselves out of the market) to smaller cities and towns. And by other similar policy and governance activism - both big and small.

So, if we did not give in to this Great Indian Desire To Dramatize and just sat back and reflected for a moment, this whole thing just might be a blessing in disguise. A gentle poke up the collective Indian gluteus maximus, so to speak, that wakes us all up from this pleasant picnic that was the BPO BOOM.

After all, till a decade ago "BPO" was as new a concept to us as "3G Telephony" now is...

And, it's not like this entire "BPO" thing is India's birthright. Just happened that the Chinese, the Russians and the Brazilians didn't know English and we did....

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