This is a great article from the WSJ (but reprinted in another paper so you can see it) about how outsourcing to India was in part driven by the medical products group of GE. I am not in general an opponent of outsourcing per se. There is obviously pain and dislocation for workers in richer nations as their jobs get sent to poorer one, and in the US both government and corporations (as if there’s any difference any more) do a shoddy job in retraining and softening the blow to workers here. But moving up the value curve is part of Schumpeter’s creative destruction. And of course India needs the money more than we do. How we distribute the money (and the work remaining here) is a political decision.
Meanwhile I recall that my colleague David Hansen wrote an article in the 1995 Institute for the Future 10 Year Forecast suggesting that significant chunks of the then growing high-tech economy in the US would find that their jobs could be moved off-shore due to the very technology that they were creating.
Recently I’ve been investigating working with some research companies in India. Many major research companies are already outsourcing large parts of their research activities to India (after all Google works there too!). And although the rates are cheaper than in the US, they’re not that much cheaper. So methinks this trend overall will level off.
On a related topic, at the excellent HIS Talk blog, read what one CEO of a transcription company has to say about the future of medical transcription being done overseas. He thinks that trend is ending too.The transcription part is only a piece of long and fascinating interview. Kudos to the HIS Talk blog for getting this type of informed opinion out there.
UPDATE: David Hansen has sent me copies of the two articles he wrote for the 1995 IFTF Ten Year Forecast. One is about India called India Strides Into The Information Age
Dragging One Foot In Its Past and the other is a wildcard called InfoSerfing that suggests that US white collar workers might find their incomes dropping dramatically due to the exporting of their jobs to similarly skilled people in other countries (just as happened to factory workers). Both pretty prescient articles given that we’re ten years on now.