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Thursday, 29 July 2010 |
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Should we be thankful for the success of India?
Tuesday, 8 June 2004
SMH Economics Editor, Ross Gittins, has written that the rise of India as an economic power can only be good for Australia. In fact, it's helping our economy head towards a "new golden age".
While Gittins doesn't specifically mention offshoring, the points he makes are relevant to that debate. He argues that, with Australia being a big producer of commodities, we can only benefit from the rise of two new economic superpowers such as China and India in our region.
Most of his points relate to China, but he looks at India as well: "And if this isn't enough to convince you the rules of the global economic game are shifting our favour, remember we've got India - with a population of 1 billion to China's 1.3 billion - coming up behind."
For many developed countries, India sucking up service jobs is easy to see a straight negative to workers in those fields. Following Gittin's argument to its logical conclusion, it could prove to be a net benefit for us however.
Most IT jobs in Australia are involved in servicing other industries such as banking, resources and manufacturing. If our whole economy is benefitting from growth in Asia, it seems likely that demand for services such as IT will follow that rise. This is true even if a proportion of that is offshored. We get a slightly smaller proportion of a much bigger cake.
Many Australian IT workers, including myself, form our views of offshoring from American and European experiences. We sometimes forget that we benefit from changes in the world economy differently to those powers in many ways.
Perhaps jobs being sucked out of the big northern powers will actually have a net benefit for us down here. The rise of India through services will lead to demand for resources as their economy grows and Australia appears certain to benefit.
Whichever way you look at it, the offshoring situation is more complicated than it appears.
Read Gittins article in the SMH.
Paul Knapp (editor@brainbox.com.au)
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