Thursday Jul 05, 2007

India: "Top Level Talent"

Is globalization starting to level the playing field? Perhaps in some segments of some markets it is. Check out these few paragraphs from a long piece in the Wall Street Journal -- Some in Silicon Valley begin to sour on India: A few bring jobs back as pay of top engineers in Bangalore Skyrockets:

\*\*\*
Several years on, the forces of globalization are starting to even things out between the U.S. and India, in sophisticated technology work. As more U.S. tech companies poured in, they soaked up the pool of high-end engineers qualified to work at global companies, belying the notion of an unlimited supply of top Indian engineering talent. In a 2005 study, McKinsey & Co. estimated that just a quarter of India's computer engineers had the language proficiency, cultural fit and practical skills to work at multinational companies.


The result is increasing competition for the most skilled Indian computer engineers and a narrowing U.S.-India gap in their compensation. India's software-and-service association puts wage inflation in its industry at 10% to 15% a year. Some tech executives say it's closer to 50%. In the U.S., wage inflation in the software sector is under 3%, according to Moody's Economy.com.

Rafiq Dossani, a scholar at Stanford University's Asia-Pacific Research Center who recently studied the Indian market, found that while most Indian technology workers' wages remain low -- an average $5,000 a year for a new engineer with little experience -- the experienced engineers Silicon Valley companies covet can now cost $60,000 to $100,000 a year. "For the top-level talent, there's an equalization," he says.

That means that for a large swath of Silicon Valley -- start-ups and midsize companies that do sophisticated tech work -- India is no longer the premier outsourcing destination. While such companies make up just a fraction of India's outsourcing work, they had been an early catalyst for the growth of India's information-technology business and helped the country attract other outsourcing clients. Their rethinking of India raises red flags for the country.
\*\*\*


So, the article seems to be articulating the position that maybe India is not the best place to grab your cheap labor anymore because the cost of top engineering talent is rising. Oops. Sorry, Silicon Valley. A funny thing happened along the way of globalization -- a new market was created and its beginning to assert itself. Better look elsewhere for your outsourcing needs. And the article points out that this is actually the case. Vietnam and the Philippines are now hot for cheap tech labor.

Don't get me wrong. This article is a pretty fair piece. I'm only criticizing mildly. But my perspective has changed significantly, and I read stuff like this very differently now. Ok, so wages of top engineers in Bangalore are rising, and as a result, some tech firms in the Bay Area are looking elsewhere to save some cash. Fine. That's part of globalization. But why is that considered a "red flag" for India? Why can't it simultaneously be considered a "green flag" demonstrating the growth and increased value of the top engineering talent in India? That's exactly how an American would view it had we been discussing Silicon Valley. But I don't see that context expressed in this article. It's all one way -- saving expenses by outsourcing in far away places so one side benefits. But you can look at it another way. Since these Indian engineers are worth more they must be putting out better stuff, so what new innovations will they create in the future that will transform India's economy and make it even more competitive? Isn't that a perfectly reasonable perspective as well?
About


Search

Archives
« April 2014
SunMonTueWedThuFriSat
  
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
   
       
Today
Bookmarks

No bookmarks in folder