I was planning to do a comprehensive piece on this subject for quite some time ( for the last 3-4 months!!!) does not look like I'll get it all done, so here I am posting in pieces...
The United States is changing, the change was visible to any one watching the young and vibrant Obama rallies vs the monochromatic Republican rallies(?) with older citizens. This demographic shift in the make up of America, would have implications for outsourcing.
One of the challenges that US,Europe Japan and China face today is the changing demographics, especially the increase in the graying population. To maintain an aging population these economies need a critical mass of young educated work force. The critical question then becomes, where is this educated talent pool?
IT demand and supply: a hard look at the numbers
According to new data from the Computing Research Association, (an association of more than 200 North American academic departments of computer science, computer engineering, and related fields) in the fall of 2006, new computer science enrollments were at 7,840, and new enrollments are at 7,915 for the fall of 2007. Compare this with India and the contrast is stark.
Per NASSCOM, (India’s National Association of Software and Services Companies) India produced 575,000 engineers in 2007, of which 193,000 were Computer Science graduates. Despite debates on quality of the education, the sheer numbers do point to the magnitude of the talent gap.
The Professional services sector in US is expected to create 5 million jobs by 2016 a growth of 16.7percenatge.Computer and mathematical science occupations are projected to add 822,000 jobs by 2016 —at 24.8 percent growth, the fastest growing segment among professional subgroups.( http://www.bls.gov/)
To keep the US growth engine growing it is imperative that we find folks in the productive age group to work and to contribute towards taxes and social programs such as Social Security and Medicare.
The economy has to create jobs; however a critical mass of educated workforce is also required to take on those jobs. Education and immigration reform in US need to be addressed with the talent war in perspective.
I will be discussing how Education and Global Immigration Reform would play a role in addressing the talent shortage and the future of outsourcing.
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3 comments:
The outsourcing is increasing its reach in terms of vertical industry reach as well as geographic scope. Indian companies are yet to identify the real benefits of outsourcing,corporate call center for future subcontracting and outsourcing activities.
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jnny
ethical seo
I think that is a valid point.
At the same time India cannot just continue to survive providing benefits from labor arbitrage alone. I have not discussed foreign exchange implications or the fate of Ireland.( which has a history of outsourced call centers)
My main argument, which I have not covered so far in my blog so far, is that ultimately labor mobility and cost of labor would be critical in job creation and retention.
Labor will move to where the work is (immigration policy has a role here) or work will move to where the talent pool resides. For the next 10- 20 years or so Indians would play a huge role in providing that talent pool. (irrespective of where the job is located).
To me India's USP is qualified manpower... skilled and unskilled, (construction workers in the Middle East which will contribute directly and indirectly to the growth of India.
US will see increased volumes in skilled work force (in about 10 years) if education becomes a priority and is more affordable, which I guess will be one of the focus areas for the Obama administration. However the cost of labor ten years from now in US vs India is something I am unable to gauge at this moment.
I think that is a valid point.
At the same time India cannot just continue to survive just from labor arbitrage alone. I have not discussed foreign exchange implications or the fate of Ireland.( which has a history of outsourced call centers)
My main argument, which I have not covered so far in my blog so far, is that ultimately labor mobility and cost of labor would be critical in job creation and retention.
Labor will move to where the work is (immigration policy has a role here) or work will move to where the talent pool resides. For the next 10- 20 years or so Indians would play a huge role in providing that talent pool. (irrespective of where the job is located).
To me India's USP is qualified manpower... skilled ( IT/healthcare/finance/call centers) and unskilled, (such construction workers in the Middle East) which will contribute directly and indirectly to the growth of India.
US will see increased volumes in skilled work force (in about 10 years) if education becomes a priority and is more affordable, which I guess will be one of the focus areas for the Obama administration. However the cost of labor ten years from now in US vs India is something I am unable to gauge at this moment.
Shall cover these in more detail.
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