rediff.com
Basab Pradhan
Why Europe is indifferent to outsourcing
March 01, 2004
<snip>
Today's markets are global in nature. As US companies in any industry start lowering their IT, backoffice and R&D costs by going to India or China, they will slowly but surely out-compete their European rivals. Their business processes will be more efficient, their product development cycles will be shorter, while their European counterparts cling to the past. It won't be pretty.
Truly speaking, Europe has not implemented any protectionist laws to keep global services out of Europe. They simply haven't had to. The existing laws are enough to keep it on the fringes of the economy. What they need to do is to embrace global services with open arms. Make changes to encourage it.
Before it is too late.
=======================
Let me start by saying I no longer believe offshore outsourcing to be a "threat to American jobs" or anything similarly dramatic. As Doug has shown, the numbers are not large enough to account for labor stagnation in the US. What I do believe however, is that offshoring is being used by American capital to discipline labor -- to, in other words, threaten workers with becoming 'surplus', one of capital's primary weapons.
So, at this point in my developing view on the topic, I'm more concerned with the class warfare elements which I see in play almost everyday (at a recent meeting for example, in which high salary programmers were informed paycuts were necessary to preserve "competitiveness" -- offshoring hung above everyone's head like a blade). I'm also interested in the fantasies of capitalists -- the belief in increased profit through endless reduction of labor costs, which is the true goal, despite noise about 'quality' and 'efficiency' and so on.
Regarding Mr. Pradhan's essay...
This is a truly hilarious piece and very revealing.
Here is an executive for Infosys, one of the top Indian outsourcing services firms, lecturing Europeans on how they'll be left behind (deprived of a vague good called, in a weasel way, 'efficiency') if they don't increase 'labor flexibility' by which he means of course, capital's ability to discard labor -- for cause or not.
I like Mr. Pradhan's candor; we need more executives like him -- honest adversaries who show their hand quite clearly.
.d.