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Listen to that sucking sound
Wednesday, March 05, 2003 Remember Ross Perot's famous line that the "sucking sound" you hear is the jobs moving South because of NAFTA? Well, that higher pitched sucking sound you now hear are jobs being transferred to India over fiber optic cable. This article gives you a good background on the emerging role of India as a back office to financial institutions. But it's not just the big companies -- American Express, Citigroup -- that are in this game. Two weeks ago, I talked with a partner in a mid-sized CPA firm in Charleston. That firm is now using an Indian company to key tax returns overnight at about 10% of the cost of doing returns in Charleston. And it's not just back office operations. Call centers are also transferring jobs to India. Here's an Internet site for one of these centers. As the site notes: "In a call center operation, manpower typically accounts for 55 to 60 percent of the total cost. In India, the manpower cost is approximately one-tenth of what it is overseas. Per agent cost in USA is approximately $40,000 while in India it is only $5,000." And call centers...often thought of in this country as low wage service jobs...are shifting to higher end centers in India that manage all aspects of customer relations. (U.S. call centers, faced with the competition, are trying to react.) It's no time to panic...but India's emergence does underscore one important point. In the global economy, brainpower is what matters. As EDPros we have largely stood on the sidelines in the education reform debate. We can no longer afford to sit around. We need to start delivering clear and concise messages. Every child needs to read by the fourth grade. Dropping out of high school is unacceptable. A high school education is no longer a ticket to the middle class. Every one needs a K through 14 education. posted by Ed Morrison | |
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