India: Softening the Image of Outsourcing

Many voters may come to realize their jobs may be lost forever to outsourcing. In anticipation of this, the WSJ's Peter Beckett offers suggestions how industry can soften this impact.
What can the industry do?

First, the name has to go. “Outsourcing” is such an evocative piece of jargon that its very mention invokes a vast array of images and sentiments, few of them favorable if you live in the U.S. and are not the chief financial officer of a multinational corporation focused on your bottom line.

It doesn’t matter too much what replaces it, as long as it doesn’t try to define specifically the activity that is at the root of the friction, like “offshoring.” If you asked 20 people what “Accenture” does, far more would be familiar with the name rather than what the company actually does (outsourcing, among other things.) Yet is Accenture taking much heat?

Ah yes, you say, but Accenture is an American company that happens to do a lot of outsourcing work, as is IBM. So they are different and won’t be such easy targets.

Which is precisely why India’s outsourcers need to stop being so “Indian.” In an industry that is the very epitome of a globalized world, it remains remarkably parochial, despite its protestations that it hires tens of thousands of people all over the world, including in the U.S.

How many truly senior jobs are now located next to their clients, the majority of whom are in America? Are the people making the decisions in the executive suite—we’re not talking about account managers and “client-facing” executives—as diverse as the firms they serve?

And when will the day come when one of India’s big outsourcers takes the biggest plunge and decides that it is better for the entire management suite not to be in India, even if that’s where the majority of its workers remain. Who will move their HQ to Denver, Atlanta, Chicago, Zurich, London? After all, it’s not only where the clients are, it’s where the big investors are, too. So why is management here?

Cognizant already has its headquarters in Teaneck, N.J., and others may be on the way.

Pramod Bhasin, chief executive of Genpact in Gurgaon, says several executive-suite functions are now in the U.S., including the heads of software, new-product development, and investor relations.

“I very clearly see the time when our headquarters has to move,” he says, predicting it may happen in a couple of years. Does he get the sense that this is the kind of new environment that the industry as a whole is preparing for?

“Not necessarily across the board,” he says, which it is fair to say is an understatement. “I wish they would recognize it more.”

If they don’t, they may find themselves “Obama-ed” all over again.

The Death of Upward Mobility

Bill Moyers, Doubleday

Then I draw a line to the statistics that show real wages lagging behind prices, the compensation of corporate barons soaring to heights unequaled anywhere among industrialized democracies, the relentless cheeseparing of federal funds devoted to public schools, to retraining for workers whose jobs have been exported, and to programs of food assistance and health care for poor children, all of which snatch away the ladder by which Americans with scant means but willing hands and hearts could work and save their way upward to middle-class independence. And I connect those numbers to our triumphant reactionaries' campaigns against labor unions and higher minimum wages, and to their success in reframing the tax codes so as to strip them of their progressive character, laying the burdens of Atlas on a shrinking middle class awash in credit card debt as wage earners struggle to keep up with rising costs for health care, for college tuitions, for affordable housing -- while huge inheritances go untouched, tax shelters abroad are legalized, rates on capital gains are slashed, and the rich get richer and with each increase in their wealth are able to buy themselves more influence over those who make and those who carry out the laws.

The Dawning of the Age of the Asian PC

Andrew Leonard, Salon.com

In 2007, sales of personal computers to the Asia-Pacific region topped sales in the United States for the first time ever. According to statistics compiled by Gartner Inc., for the entire year Asia-Pacific shipments totaled 70.7 million units, while only 64.2 million PCs were sold in the United States. The trend continued in the first quarter of 2008, with 19.1 million PCS sold to Asia, and 15.2 million sold in the U.S.

As defined by Gartner, the Asia-Pacific region does not include Japan, but encompasses both China and India. So on a per capita basis the U.S. is still doing quite well, comparatively. But the trend line is significant. First, the data prove that a growing percentage of all of those semiconductors exported to China by Intel do not ultimately end up in computers that are shipped back to the U.S. The relentless focus on global markets by U.S. corporations isn't motivated solely by the cost-savings from outsourcing and offshoring -- there's plenty of money to be made selling real products, too.

Second, if, as noted earlier today, the future productivity increases necessary to keep the global economy growing healthily and enable humanity to avoid Malthusian disaster will be a function of increased knowledge, then we can probably expect a growing proportion of life-saving technological innovation to come from all those new computer users in Asia.

-- Andrew Leonard

McCain's 'War on Pork' May Smoke Him

McCain’s ‘War on Pork’ May Smoke Him

Skeeter Sanders, Opednews [Excerpt]

Bipartisan Blasts at McCain for Killing Boeing Deal

The European Aeronautic Defense and Space Company (EADS) and its U.S. partner, Los Angeles-based Northrop Grumman, won a competition with Boeing on February 29 to build the refueling planes in one of the biggest Pentagon contracts in decades. The unexpected decision has sparked outrage from union halls to the halls of Congress over the impact on U.S. jobs, prestige and national security.

EADS and Northrop insist, however, that about 60 percent of their tankers will be built in the U.S.

An unusual bipartisan coalition of Boeing supporters in Congress are directing their wrath at McCain for scuttling an earlier deal in 2004 that would have let Boeing build the next generation of Air Force refueling tankers. Boeing now will miss out on a deal that it says would have supported 44,000 new and existing jobs at the company and suppliers in 40 states.

House Speaker Nancy Pelosi (D-California), echoing the thoughts of many congressional Democrats, said the earlier tanker deal was "on course for Boeing" before McCain started railing against it. "I mean, the thought was that it would be a domestic supplier for it," Pelosi told reporters. "Senator McCain intervened, and now we have a situation where the contract . . .may be outsourced."