It's the global economy, stupid
Tuesday, 6 July 2004
We should stop whining about offshoring and start seeing India as the incredible opportunity that it is, says this month's issue of Business 2.0. The article is entitled "It's the global economy, stupid", a play on Bill Clinton's famous insult to the first President Bush.
Instead of a threat, the growing young professional sector in India is an unprecedented opportunity for western business. India's middle class is now bigger than the entire US population; and their demand for western products seems insatiable.
"Thanks to low interest rates, deregulation, and an influx of 785,000 new jobs at call centers and programming houses, Indian consumers are buying up everything from imported computers and software to cell phones and clothes," says the magazine. "According to some estimates, 487 million middle-class Indians will spend an additional $420 billion during the next four years."
India's economy is predicted to grow by 7.2% this year, compared to 3.8% for Australia and 4.7% for the US. The country has a population of over 1 billion people, all members of the Commonwealth and many of whom speak English.
Ross Gittins covered similar ground in an article last month. He said that Indian demand for Australian raw materials could push Australia into a new age of prosperity.
While some jobs will be lost as offshoring grows in popularity, the benefit of a booming India should outweigh that loss. If Australian business succeeds in this massive new market, their demand for workers of all kind should surge. That includes IT workers. It doesn't take much calculation to work out that, if handled correctly, this could lead to a net growth in jobs.
The key drivers of India's new growth are urban professionals, many working for outsourcers. By 2006, India's 20 to 34 year-old population will grow to 280 million. While, as has been widely reported, these people will compete with westerners for many jobs; they will also demand western products to consume. This is not a zero-sum game.
American exports to India grew by US$1 billion to US$5 billion last year. That's one hell of a pie to share around. Indians have already spent US$2 billion on equipment manufactured by a single company - Nokia. Australian companies should learn from their example.
Asking for protection from offshoring and wanting to reap the benefits of Indian prosperity at the same time is hypocritical and counter-productive, if these commentators are correct.
In fact, it could be argued that we should be thankful for the many Indians wanting to move and work here. Like previous waves of immigrants such as the British and the Chinese, these new Australians are likely to be key channels through which business is conducted between our nations.
"The Indian middle class is easier to target because people understand English and have a Western orientation," Rory Cowan, president of Lionbridge Technologies, which sells database translation software throughout Asia told Business 2.0. "In China it's a longer slog."
"Of course, nothing in business, especially global business, is without risk," says Business 2.0. "A big wild card is India's notoriously unstable government. The communists and socialists who helped forge Prime Minister Singh's new ruling alliance could easily derail progress."
Those praying for the Indians to fail may well find they're cutting off their nose in spite of their face.
Read the whole story in Business 2.0 (subscription required).
Read more about India in the CIA World Factbook.
Paul Knapp (editor@brainbox.com.au)
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New McJobsFrom what I've read it seems the Indian middle class is going to be our saviour. Unemployed programmers could go to India and learn how to clean their new toilets and bathrooms. We could also learn how to clean Indian homes and be grateful for the crumbs they will throw our way. What a joy to be an unemployed programmer!!!! As for the expensive goods and services the Indian middle class will buy, did it ever occur to people that most, if not all, of these are made and/or provided by companies based in countries with cheap labour, such as India, Malaysia, etc.... ITcasualty, 07/07/2004 11:52:05 PM
It's the global economy, stupidOh I love this justification.... it smacks of lords and slaves. So when India and china become tooo expensive let me see AH yes AFRICA, the next available cheap form of labour... I detect glee in the eyes of the corporate world. There is far too much power in the hands of business - the guru of global( and I am sure there is one) might just have to apologise like the downsizing gurus - hammers and what was his name ! I am an indian I can not be accused of racisim, I was brought and raised in Aus my allegiance is with this country. Ask me and the other IT people who sit around looking on as jobs which most of us have to qualify for by doing and paying for a degree are being farmed out. I look in horror as I watch lazy management bring in people from TATA and HCL where I work - literally 80 -100 jobs are over in India. I have friends who are looking for work and they are skilled but want money that will allow them to live! I just saw another snippet yesterday where some englishman who believes india has very good scientists... OH yes CHEAP too 125 pounds per week and guess what the big pharmaceuticals want to set up these over there... Well there goes the chance for our scientist.... India and Indians are intelligent _ no more then bright people in Aus, Engl, US, China, Norway.... they are cheaper! I feel better now thankyou Mal, 07/11/2004 07:57:16 AM
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