On Outsourcing

Well, outsourcing has been talked about a lot. A more recent article is this one from NY Times (you might be required to register at NY Times) by Paul Samuelson, the Nobel prize winning economist, now at MIT. I think his strong point about long term outsourcing could lead to wage losses in the US ("If you don't believe that outsourcing changes the average wages in America, then you believe in the tooth fairy") was true (see Amardeep's blog also), especially with highly technical research and development work also being outsourced in addition to just things that made simply economical sense. I didnt quite get the rebuttal by Jagdish Bhagwati (In Defence of Globalization):

Mr. Bhagwati and his co-authors write that such an assessment of the education systems of India and China "almost borders on the ludicrous." In an interview, Mr. Bhagwati said, "You have a lot of people, but that doesn't mean they are qualified. That sort of thinking is really generalizing based on the kind of Indian and Chinese people who manage to make it to Silicon Valley." The Samuelson model, Mr. Bhagwati said, yields net economic losses only when foreign nations are closing the innovation gap with the United States.

An interesting point, but I think education turnout (in terms of number of students graduating), at least upto the undergraduate level is much more in India and China than the US. Bangalore alone produces over 35,000 undergraduates from different streams each year.

On the down side, I have heard some really sad stories about people being exploited in call centers here in Bangalore. I am trying to find some press articles on this, more on this soon.