Yes, even I belong to the great Indian IT dream or more appropriately the Indian IT ‘outsourcing’ dream. I say the word outsourcing with much hurt and I’ll go on to tell why it hurts that way. Well, you would ask ‘What’s wrong with the job? It’s a white collar corporate job that pays very well’. This is only in part true. To be more specific, that ‘pays well’ part is good, but nothing else, I assure you. The problem has now been snowballed into a much proportion with the masses believing that IT is the ONLY way to go. Everyone believes in sending their kids to do any engineering keeping in mind that companies like Infosys or Wipro or TCS or the like would employ their kids and it’s like they live happily ever after. Or do they?
THE GOOD:
There is absolutely no denying the fact that this wave has helped create a new generation of smart people, if not by intellect, at least by soft skills. This generation has learned to tolerate a different point of view, appreciate a different culture et al. More importantly, this wave has created enough lucrative employment opportunities (in scale) for the lower and the middle class. Such jobs have enabled scores of families to upgrade their lifestyle, pay off loans or have grand weddings and celebrations which they couldn’t otherwise afford. A car has now become a norm, which is precisely why Bangalore is jam packed. More than the money itself, these jobs provided ordinary engineers an opportunity to work abroad for a while- an opportunity which most could not even dream of hadn’t it been for the outsourcing. I personally know of people who have risen with the industry. They must have been real good at it!
Above all, the collective effect of outsourcing has been very good for our country from 1980-2000. Our growth rates began rising, people were doing better and businesses were flourishing because of higher consumer base. International brands rushed to set shop to tap the nascent demand. FDI went up, the markets were open and all looked well. Everyone was happy. Recruitment was scarce thereby still maintaining the aura of exclusivity of such firms. This was the making of the next generation of youngsters dying to get into such firms. These firms had the best HR managers in the country doing the best possible job of maintaining the fittest of the workforce. They never hesitated to throw in money or to look for newer ways of retaining people. ESOPs or Employee Stock Ownership Plan was first introduced in India by IT firms and only later did others follow suit. All this would of course change in the due course of time with the dotcom bust and the slowdown that followed. But was this the beginning of the end of the great outsourcing biz? Or did greater glory follow?
To be continued….
From my personal experiences i have learned that troubled times are the times when you rethink about yourselves and improve. I am sure days of glory will follow.
Comment by Kenney Jacob — January 30, 2009 @ 7:33 am
Despite the fact Obama has taken office?
Is it just wishful thinking on ur part, Kenney?
Comment by Ash — January 30, 2009 @ 8:45 am
“Outsourcing” is a global phenomenon thats spread across! It began in the 90′s and now its 2009! In this long 10 to 15 years period,Indian’s refined themselves a lot in education. As you mentioned above, the life style of an average Indian upgraded and that lead him improve himself in knowledege, and it gave him an oppurtunity to provide better education to his/her dependents too. No way an educated country will go “down” in this global world!
Comment by Jojo — January 30, 2009 @ 10:33 am
Qualitatively the research field suffered the biggest loss due to outsource boom. No one bothered to go for higher studies, no more phds (only mbas), new ventures in other fields just dies out. Last year we had seen even bsc students getting placed in mncs..making all indian youth stop the studies way early with this lucrative idea.. Now it has all flipped..
Comment by Juwal — January 30, 2009 @ 10:34 am
You are right on one thing. Outsourcing boom drove the Indian economy for the past decade or two. The main incentive to the process was the wage disparity.
However, as the Indian economy prospers and the wages become not that lopsided, outsourcing would definitely slow down. Even on manufacturing sector, we cannot always rely on exports to boost the economy.
That leaves to a strong domestic demand to cover for any short comings in the overseas demand. Good thing is that, once the economy flourishes, already we are seeing a strong domestic market that can sustain the economy at least in part.
Long term prosperity would depend on how the rising middle class and their consumption/demand can singlehandedly drive the economy.
Comment by Domestic Avalanche — January 30, 2009 @ 8:00 pm
@Kenney:
Toughest of the steel goes through the hottest of fire.
@Jojo:
The biggest problem’s that the education doesn’t seem to make any impact beyond the point of sending in more and more people into outsourcing. In no way has that education enlightened people and wake them up to see other career alternatives. Thats very dangerous. Its as though you have zero sense of risk mitigation. Would you invest all your money in one scheme? I guess not.
So I’m not entirely convinced that an educated back office nation wouldn’t be hard hit. No educated country would go down. America hasn’t. But its going thru a very difficult phase now.
Comment by The Nomad — January 30, 2009 @ 9:28 pm
@ Both Juwal and Domestic Avalanche:
Bang on point! I guess educationally, we ended up losing any kinda foresight. The economy right now manages to reman afloat owing to domestic demand. But once the outsourcing circuit shorts out, we’ll have a huge unemployment problem, which I’m sure won’t be able to solve soon.
This would result in the housing bubble etc.
Just my analysis.
Comment by The Nomad — January 30, 2009 @ 9:56 pm
@ Nomad!
“”But once the outsourcing circuit shorts out, we’ll have a huge unemployment problem, which I’m sure won’t be able to solve soon.
This would result in the housing bubble etc.
Just my analysis.”"
is “outsourcing” gonna end tomorrow ??
Comment by Jojo — January 31, 2009 @ 9:32 pm
Not tomorrow, day after tomorrow perhaps
NOM there…
I get your point, I really do and I hope you’re also from the outsourcing biz.
What I’m trying to convey here is that we’re running outta work real fast! The bench is growing at an enormous rate, even managers and Senior managers wind up in bench these days.Cost cutting has attained a new height.
Most of the Indian IT outsourcing happens from Banking and Financial Sector in the US or elsewhere for that matter. Today its needless to say how well off that sector really is. When they do not have money, how will they pay and how will we get paid? They’re now in process of toning down the work. Its very visible. Beyond a certain point, our employers would find us to be liabilities than assets and one fine morning we will be handed the pink slips. Once that happens, mass industry wide layoffs will commence. Right now layoffs are not that serious, just a few here and there.
This is the ground reality I see. It IS on the decline. And definitely even if it were to be revived, it won’t be able to support as many people as it does now.
Comment by The Nomad — January 31, 2009 @ 10:28 pm
I m not that bothered!!…
Comment by Jojo — February 1, 2009 @ 10:23 pm
[...] the first post of this series, we had a look at the prosperity IT outsourcing had brought to the country. How it [...]
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