Offshore Comes Home
In other words Infosys, the Indian IT service giant that is increasing its revenues at, oh, 50 percent a year or so, is establishing a U.S. consulting arm to compete on both quality and price. If you're making half-a-million a year telling clients how to implement technology strategy, that's a scary thought.
I thought about this earlier in the week while reporting on the Wipro acquisition of Austrian chip design company NewLogic. (See Wipro's Wireless Expansion.) In another bit of "reverse outsourcing" -- which is poised to go from obscure economic term to official buzzword status in the upcoming election year, even though a Google search on the term still turns up fewer than 900 hits -- Wipro will actually have a European-based R&D shop, aimed at the relatively sophisticated wireless LAN market -- presumably paying European wages and taxes.
As they move into higher and more complicated technology markets, not to mention tech consulting, hot Indian IT firms like Infosys, Wipro Ltd. , and TCS are making acquisitions in North American and Europe and hiring Western developers, engineers, and consultants -- and, at least for now, creating good jobs (though at a much lower rate than the manufacturing and call-center jobs that are fleeing to the subcontinent). "When you hire locally, you hire as per the local requirement," Sanjiva Singh, EVP of SlashSupport, a Chennai, India-based tech support company that this year opened a small San Jose office, told Ela Dutt of the Hindustan Times. "You have to pay local salaries and local everything according to local conditions."
This is not going to make a dent in the U.S. unemployment rate; in fact it's liable to increase, not decrease, downward pressure on wages, as the consulting example shows.
But it's a sign that globalization is a whole lot more complicated than either its apostles or its fiercest opponents tend to admit.
— Richard Martin, Senior Editor, Unstrung