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Friedman on Outsourcing

February 27th, 2004 · No Comments

Thomas Friedman is one of the most intelligent and sensible writers. He is travelling in India, and provides a view which should silence the anti-outsourcing lobby in the US:

when I came to the 24/7 Customer call center in Bangalore to observe hundreds of Indian young people doing service jobs via long distance answering the phones for U.S. firms, providing technical support for U.S. computer giants or selling credit cards for global banks I was prepared to denounce the whole thing. “How can it be good for America to have all these Indians doing our white-collar jobs?” I asked 24/7’s founder, S. Nagarajan.

Well, he answered patiently, “look around this office.” All the computers are from Compaq. The basic software is from Microsoft. The phones are from Lucent. The air-conditioning is by Carrier, and even the bottled water is by Coke, because when it comes to drinking water in India, people want a trusted brand. On top of all this, says Mr. Nagarajan, 90 percent of the shares in 24/7 are owned by U.S. investors. This explains why, although the U.S. has lost some service jobs to India, total exports from U.S. companies to India have grown from $2.5 billion in 1990 to $4.1 billion in 2002. What goes around comes around, and also benefits Americans.

JadooWorks, [an Indian animation company,] has decided to produce its own animated epic about the childhood of Krishna. To write the script, though, it wanted the best storyteller it could find and outsourced the project to an Emmy Award-winning U.S. animation writer, Jeffrey Scott for an Indian epic!

“We are also doing all the voices with American actors in Los Angeles,” says Ashish Kulkarni, C.O.O. of JadooWorks. And the music is being written in London. JadooWorks also creates computer games for the global market but outsources all the design concepts to U.S. and British game designers. All the computers and animation software at JadooWorks have also been imported from America (H.P. and I.B.M.) or Canada, and half the staff walk around in American-branded clothing.

“It’s unfair that you want all your products marketed globally,” argues Mr. Kulkarni, “but you don’t want any jobs to go.”

He’s right. Which is why we must design the right public policies to keep America competitive in an increasingly networked world, where every company Indian or American will seek to assemble the best skills from around the globe. And we must cushion those Americans hurt by the outsourcing of their jobs. But let’s not be stupid and just start throwing up protectionist walls, in reaction to what seems to be happening on the surface. Because beneath the surface, what’s going around is also coming around. Even an Indian cartoon company isn’t just taking American jobs, it’s also making them.

Tags: Emerging Markets

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