By Andy McCue, 1 December 2003 13:55
NEWS The massive rise in European firms outsourcing IT and call centres offshore to India will only increase unless governments relax visa and work permit restrictions for Indian IT professionals, according to India's Prime Minister Atal Behari Vajpayee.
Vajpayee, who made the top ten in silcon.com's Agenda Setters 2003 poll earlier this year, said in newspaper reports that visa restrictions stop the free movement of affordable and qualified workers.
"The demographic profile of Europe and America necessarily means that these countries will need the induction of a younger work force from outside in the coming decades," he said at an EU business summit meeting in Delhi at the weekend. "If there is a more liberal regime of free movement of businessmen and professionals between India and Europe, this demand can be met within your countries.
But Vajpayee said the absence of a liberal employment regime only makes more offshore outsourcing inevitable.
"If people cannot go to where the business is, business will eventually come to where the people are," he said.
Vajpayee also said union concerns about jobs being 'lost' overseas were unfounded and that the cost savings and productivity gains as a result of firms moving operations offshore benefit western countries the most.
"The emotive arguments about the migration of jobs to countries such as India have missed two basic points," he said. "The first is that outsourcing is increasing the competitiveness and global reach of European and American companies. The resultant boost to the balance sheets and increased dividend payouts are very much in these countries."
The trend for offshore outsourcing has continued unabated recently with firms such as Lloyds TSB, BT and Prudential all moving some operations to India. Analyst firm Gartner estimates that a quarter of all tech jobs will be based in low-cost overseas countries such as India by 2008.
Comments
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1. anonymous
India supported & encouraged their IT industry & training with tax breaks. UK government puts massive overheads on UK IT companies, especially small companies which want to grow. Our political leaders continually show a complete lack of foresight and awareness of consequences in their actions. Look at how UK government IT projects are managed, look at the long political debates which somehow result in rushed and faulty legislation. How about outsourcing our political and legal leaders?
2. Simon Dean
Outsourcing imho is just the fad of the moment. Having spoken with a number of peers who have experienced outsourcing projects, all commented that quality of service suffered. So whilst it reduces bottom line costs, I think ultimately customers will lead the revolt. Dell's recent announcement to withdraw support for key corporate accounts from India back to the US was the first sign that outsourcing has fundamental problems. I wonder how long until we see the tide change as reality dawns. At the end of the day, it will be a lesson for CFO's and Shareholders to think less about profit and more about quality.
3. Clarkbell
I have tried Indian call centres and they are very difficult to understand and make the support experience worse. I hope firms that implement these outsourcing deals understand that if the customer “votes with feet” that they had better have a fall back system in place. I have tried the Dell call centre and I had a terrible time trying to get them to call me back during British working hours. I believe the Government must stop issuing IT Visas and encourage firms and individuals to get more training. I would like tax breaks for IT training so I can go fill that job position that requires specific qualifications, but I cannot do that out of my own pocket; the training courses cost a small fortune. Therefore, I train myself with books and the internet, but I would prefer to be trained via work or via zero interest loans.
4. Gareth Williams
Vajpayee is spinning a clever line, let's hope Blair & Co. don't fall for it.
The reality is that IT visas have been used to facilitate off-shoring. Many contractors have been reporting that Indian workers come to the UK for six months, are trained up (often by the workers, permanent or contract, they will replace). When all the UK staff have been replaced, the Indians fly home and the operation goes offshore.
This is a total abuse of the work permit rules - which in theory only allow foreign workers entry to do jobs which can't be filled by UK workers. But without this tactic it would be much harder to transfer the skills abroad.
Ultimately, IMO, offshoring is the operation of the free market, and is "fair competition". But we don't have to facilitate it by allowing abuse of the visa rules. Recently the Goverment has begun to tighten this up - and that is why Vajpayee is squeeling.
5. anonymous
At last some one has pointed out that movement of skilled workers is also a chapter to be considered under WTO discussions. Means some countries with quality products at lower cost wants Free Market access GLOBALLY and this should mean that some countries who have quality manpower at lower cost will need to have free Market movement GLOBALLY.
6. anonymous
India did this with the textile industry and all we got was cheap shoddy goods. The same is happening to call centre services and software