US Economy slowing down

[BaBu]

I think India and China is sucking blood out of US and it will not last. India is redefining how services are delivered in global operating model and china is revolutionising manufacturing by producing products at massive scale lowering operating cost.

I have worked in BPO sector before and right now making a transition from BPO to KPO by doing knowledge based academic work in the field of financial research. However, sometimes i feel guilty of doing someone else job. The flat world as Nandan of Infosys says is a simple process and concept where we are transitioning high labour processes to cheaper cost effective locations. Raju, CEO of Satyam said few weeks ago that one IT job created in India generates an additional 3 more indirect job. My thinking is: One IT job offshored from US will destroy 3 additional indirect jobs (in US) in the same way.

I remember reading an article where TCS sended a project manager to transition process in Mumbai. When project manager went to US, he learned that IT department is laying off 45 people and sending 45 jobs to Mumbai. Apart from loosing core job, someone will loose his home, someone will have to part away with his car, someone will stop sending his kids to school etc.

3.3 million jobs will be offshored from US by 2015 as per neoIT reports. The total labour workforce in US is 130 million. So, almost 3% of workforce in US will be offshored. My main cause of worry is the same as my thinking. 3.3 million will loose jobs directly, how many people will be affected indirectly? If 1 job cut affects 3 indirect jobs, then close to about 13-14 million people will be affected out of total population of 300 million. The flat world will affect about 4-5% of US population and there will be tremors in the form of newspaper articles, personal stories felt across the nation.

World is an imperfect place. India needs army of transition managers, project managers and operational experts to carry mass migration of low and high end service processess to India disrupting exisiting community and social harmony and creating an anxious and volatile life for the displaced worker. IBM global services plans to have 100000 professionals in India by 2010- 30% of IBM global workforce will be in India by 2010.

I am proud what infy, wipro and TCS are doing. Infosys invented the global delivery services model and it is a business disruption model. Finally, India is making impressive mark in IT services derisking India delivery model by capturing other low cost locations and becoming global corporations. But, at the same time sometimes i feel guilty and think about poor americans who are paying price of internet invention-Flat World.

Offshoring will not help American economy. I dont know whether recession will hit US or not but offshoring coupled with huge spending in Iraq war sounds negative. Middle class in US is getting serverly affected due to service offshoring hitting the most important part of US economy- Consumption Demand.

Lets pray for peace and united flat world.