A mouse-click brings India to NY
US workers lose out as India becomes a destination of choice.india Updated: Dec 08, 2005 12:41 IST
As American business tracks a path to India as a destination of choice, economists and policymakers in US are warning that American workers are losing competitiveness in a global economy.
This week Intel's CEO Craig Barrett announced the chipmaker would invest some $1 billion in India. JP Morgan Chase announced it was hiring 4,500 Indian graduates for back office support by 2007. And Bill Gates, the legendary founder of Microsoft, seems to have made India his second home.
The creeping uncertainty about the future of the American economy is not just restricted to information technology.
In an opinion piece for The Washington Post on Tuesday, Norman Augustine, the former chairman and CEO of Lockheed Martin, who was part of a high-level panel to assess the shortcoming of the American workforce, says, "In the five decades since I began working in the aerospace industry, I have never seen American business and academic leaders as concerned about this nation's future prosperity as they are today."
"Workers in virtually every economic sector now face competitors who live just a mouse click away in Ireland, Finland, India, China, Australia and dozens of other nations."
Augustine points to the mouse-click that brings India to Pennsylvania Avenue. "US companies each morning receive software that was written in India overnight in time to be tested in the United States and returned to India for further refinement that same evening," not to mention, call centres in Pakistan or Brazil. And high-end jobs are up for sale to such developing countries, he warns.
"The level of foreign direct investment into India continues to rise dramatically," contends Anirban Basu, co-founder and chairman of the economic consultancy firm, The Sage Policy Group in Washington. The Intel announcement is simply the latest in a string of announcements that suggests that interest in India grows by the day, he said.
"However, there has been and is a benefit associated with the fact that India has not received large sums of foreign investment," Basu maintained contrarily. "Because of a lack of foreign investment, India has been forced to develop a competitive banking system able to finance domestic firms."
Despite the high growth rate and the Indian government's promises to facilitate foreign investment, there continue to be institutional barriers to FDI, which experts hope will fade over time.
"India enjoys certain advantages the Chinese do not and over the long haul, assuming India continues to make changes, India will close the investment gap with China," Basu said.
"If you compare the American workforce to much of the world, it is quite educated. However, America has glowing shortages in Math and Science," he concedes.
"There India has advantages. Indian young people are disproportionately committed to achieving excellence in Math and Science. They understand that Math and Science are principal gateways to prosperity."
Combining this aptitude with English proficiency equals India having a larger stock of the world's most valuable resource than any other nation. "And it would be difficult for Americans to compete with these talented, motivated, educated, farsighted young Indians," Basu asserted.
At the same time, Western entrepreneurs have complained occasionally about corruption and red tape. But India is not alone in that, they agree. Russia, for instance, has a seemingly more endemic problem.
"But India is alone in terms of the size of its markets," Basu noted. And it was improving its intellectual property rights regime. "So in hand with all the corruption, lack of infrastructure, no single-window, etc. ... India remains one of the fastest growing economies in the world."
First Published: Dec 07, 2005 12:39 IST