Sun, I'm not sure about Social Security, and you may be right, however I believe that when it comes to demographics and employment, the US will be ok. In fact, I was buying staffing stocks yesterday afternoon in the last hour before the market closed on election day.
The outsource to India thing is a business fad, IMO. Do you remember Quality Circles? Does anyone do that anymore? Now, the cost difference is definitely visible, but what are the quality of ones software deliverables when the code comes back? I am a corporate IT director in charge of a Fortune 500 company and oversee corporate software development. Although I do have one IT resource in India, he does integration work with systems that we have in India, Australia, China and the rest of Asia. I would never ship a large scale project down there because of communication problems; what I'd get back would probably be far from what I'd want. If I could do a $50K website for $10K in India but it doesn't work, my opportunity cost is far greater than the expense savings.
Similarly, the Indian call centers are a joke. I get really turned off when I call for support and end up talking to someone that I can hardly understand. I have heard this from a number of other people also so I know it's just not me. If Dell saves $5 on the cost of that support call but I resolve to never buy another Dell computer because their support stinks, what opportunity cost is that?
Believe me, it's a trend for sure, but it's a fad in the long run. Demographically, we have a lot of baby boomers going out of the workforce in the next 3-5 years and my prediction is that there will not be enough Americans to go around in 4 years for all of the jobs. Labor utilization is the one metric that Greenspan has consistently stated he watches and labor inflation will eventually cause the Fed to take away the punchbowl, again. |
