Thursday, September 25, 2003
Out sourcing - the future

Lots of people are concerned abt the future of out sourcing - and whether it would cause a backlash here in the US. I think, over time, out sourcing from the US is bound to reduce - either due to legal restrictions (though I do not see how this could be achieved), sops (such as meaningful tax cuts for companies not going abroad) or because of trade concerns (such as reduction in demand in one of the biggest consumer markets in the world).

However, India will not lose, because the out-sourcing from Europe is waiting to start on a big scale. The biggest road block to this might be the language. We should do something abt this - train more students to learn French and German. Given the massive shortfall in labor force that the EU will be facing in the coming years, and the fact that when it comes down to the reality, they might feel squeamish about making it up with immigration, the big players of Europe might find out-sourcing an attractive option. However, to benefit from this, India will have to compete with eastern European nations. Get ready folks, a new generation of trade wars is beginning.

PS: Check this out: http://money.guardian.co.uk/news_/story/0,1456,1049215,00.html

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