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BANGALORE, India – Kenny Jones adjusted his microphone, waiting for his cue. "Radio Inigo 919. It's 20 minutes after 10 o'clock."
He took a couple of breaths over the fading beats of Katy Perry's "Teenage Dream" before asking listeners to call in and let off steam over problems on the airport road.
"Every day there are 400 new cars added to the streets here," said the DJ from Ohio who now hosts one of hottest radio shows in Bangalore.
NBC News
Sean Blagsvedt, a California native, works with an Indian colleague on the streets of Bangalore.
His show, which plays international music, has a massive following among the young technology crowd in this, India's high-tech hub.
"This place is really booming," he told me when he came off air. "It’s very happening, a real melting pot. People come from all over the place. Look at me!"
A little later, in another part of this rapidly expanding city, I met Sean Blagsvedt, from California, who started up Babajobs.com, a pioneering employment agency for blue collar workers, such as drivers, cooks and gardeners, which uses text messaging.
"Basically, people text in their profile, a simple profile," he told me. "We then send back a text of matching jobs. Suddenly the phone is a digital tool that enables people to get connected to better information."
Blagsvedt came to Bangalore in 2003 for Microsoft, but left four years later to set up Babajobs, seeing an opportunity in the explosive growth of cell phone usage in India, which now has more than 700 million cell phone lines.
"There's a lot of hope in this city," he said.
I didn't expect to meet people like Jones and Blagsvedt in Bangalore. After all, this is the city frequently blamed for taking American jobs. Its India's outsourcing capital, and "to be Bangalored" has fast become a term for losing a job.
Some 60 percent of the work done by India's $60 billion IT and outsourcing industry for the U.S. is done here. The industry employs around 4 million people, and Bangalore is the hub.
President Barack Obama chose to skip this city which used to be at the top of the list for visiting dignitaries. So I came here to see what he is missing.
Not about cheap labor, about ‘being global’
Obama, when he was still a candidate, declared that he wanted to see jobs created in Buffalo, not Bangalore.
But the city has continued to boom, and Bangalore has now moved well beyond the call centers and back-office work where outsourcing started in the 1990s.
The city now hosts some of the world's most cutting edge research and development work, and the glittering new office blocks here are a roll-call of America's technology giants, employing highly skilled Indian workers.
Unlike most visiting dignitaries, President Obama has opted not to go to India's high-tech capital of Bangalore, the center of the outsourcing industry he has blamed for taking American jobs. NBC's Ian Williams reports.
"We don't do things because it’s cheap. We do things because of the expertise available here," said Raj Raghavan of GE India Technology. GE, the parent company of NBC Universal, has set up in Bangalore its biggest technology center outside the U.S., employing 4,000 people on work that includes the latest medical diagnostics and aero-engines. (Msnbc.com is a joint venture of Microsoft and NBC Universal),
Still, in spite of rapidly increasing wages here, skilled software engineers cost only a fifth of their U.S. counterparts.
But Raghavan was quick to say, "This technology center is not about outsourcing, it’s about being global."
GE is also now concentrating increasingly on developing products for the fast growing Indian market. Raghavan showed me a portable electro-cardiogram GE's developed for rural healthcare.
"India's going to be big for GE," he told me. "It's a win-win situation for everyone."
There is a similar story at CISCO and at Texas Instruments, which is celebrating its 25th anniversary in Bangalore. Texas Instruments released a picture to a local newspaper of their first satellite dish being unloaded from the back of a bullock cart.
For many U.S. companies, their Bangalore operations give them an important foot in the door, and they say benefits will flow back to the U.S. as the Indian market takes off.
‘Jobs will go wherever the talent is’
Early one morning I visited Tutorvista, which provides online tutors to the world. It too is booming, with the fastest growth from the U.S.
"People think we are taking jobs away from the U.S.," said Srinivas, a tutor, between teaching algebra lessons to two high school students in the U.S., where it was evening. "It's unimaginable that this could be done from the U.S. The cost would be 10 or 12 times what we are providing."
Tutorvista, which charges $100 per month for unlimited access to a private tutor, argues that far from taking jobs, they are providing an additional service for people who could not afford the cost of a private tutor in the U.S. Their biggest growth area recently has been from older people attending community colleges, going back for more education during the economic downturn.
A recent survey of Bangalore's IT workers found a majority understand the anger in the U.S. towards outsourcing. But they were proud of the work they are doing.
“Jobs will go wherever the talent is," said Sunder Prakashaw, who runs a company called Get Friday, which provides personal assistants to small businesses and busy individuals. "America will have to find new ways to reinvent itself."
One of Sundar's proudest moments was when a client phoned from the New York subway, where he was lost, and Get Friday helped him figure out where he was and organized a taxi for him a couple of stops down the line.
‘Jobs based on merit’
Technology colleges are expanding across Bangalore to meet the demand for skilled workers. One of the most prestigious is RV College of Engineering, where I met students working on a project to design a racing car. They were defensive about accusations that Bangalore is taking American jobs.
"As long as people are getting jobs based on merit, that shouldn't be a problem I feel," one of the students told me.
Yet in many crucial ways, they were still looking to America. They showed me their car, telling me the engine and the chassis material came from the U.S., since it was the best source. And after graduating, 10 out of the 15 team members said they want to do post-graduate work in the U.S., which for them was still the best place to study.
Later that day I read another newspaper article complaining about the outsourcing of jobs. Only this time it was an Indian newspaper article about jobs moving away from India, where costs are rising fast, to the Philippines, which is now set to take over as the call center capital of world. It seemed that Bangalore was being Bangalored.
Which I guess is the reality of a globalized economy.
Before I left the city, I bumped in to Sean Blagsvedt again at a packed city bar. It was "Booze and Clues" night, a drink-fueled quiz night, attended mostly by the tech crowd, and his team was doing well.
He told us that four members of his family had recently lost jobs in the U.S.
"The U.S. economy has to make things the world wants," he said.
His business is rapidly expanding across India, providing a simple but very effective service for a huge sector of India that previously only learned about informal jobs via word of mouth. He now plans to expand to Indonesia.
The relationship between Bangalore and America is a complicated one. It’s certainly is not a zero sum game. There is so much more to this city, and it’s far from being all bad news for the U.S.
I think on balance, Obama should have come here, but I'd be interested to hear whether readers of this blog think he was right to ignore India's most dynamic city.
Leave a Comment:
Congress needs to use tax incentives to encourage investment in production and job growth in the US. Congress should use tax disincentives such as taxing profits on foreing production or facilities of US corporations at a higher rate to compensate for the lower labor costs of those operations. Make it less economically advantageous to offshore jobs and production.
Totally Agree, Tax credits for US Corps that create work in the US. Tax Penalties for those that out-source. for the Government its a win/win because the created income taxes will offset the US Corp tax credits. for US Corps its a win/win as well because if more people had jobs, they could afford the products.
Continually finding ways to make cheaper products by outsourcing to cheaper countries is a losing battle for the US as a whole. the more unemployed in the US, the less people can afford products, so they try to make cheaper products.. and the circle continues..its a losing battle..
On top of that from a federal perspective you have less and less people paying taxes.
Sadly enough, the government will never put in place such a logical incentive/penalty to create work here in the US because the big corps are actually the ones running the country. at least thats my opinion.
I totally disagree! We should not be encouraging inefficiency and subsidies that go against free market economics! Instead of trying to keep jobs that we can no longer compete with, we need to work in areas that we can compete in! We can't have it both ways! We had it good for the last century and preached free trade across the world. Now it's our turn to be in the losing side, and instead of unraveling the efficiencies that have been created with a global economy, we need to be creative and find our competitive edge!
Just think if Clinton would have tried to keep the jobs in the United States we would have been still on top of the pile.now the pile is on top of us.
ellie: Clinton signed NAFTA, he did not write it, and it was sign by the majority of the Republican in Congress at the time. George Bush senior came up with it and made the deal with Canada and Mexico. And like it says, it is NAFTA. North America Fair Trade Agreement. Notice the North American in it? Not India, Indonesia or any where else. Learn before you post. And put the blame where it belongs. God I hate spinners.
I believe IT outsourcing is a fad that is already showing signs of weakness. I worked in the IT area of a Fortune 50 company that invested heavily in building a presence in Hydrobad and never really realized the benefits they expected. There are a number of cultural and communication issues that make it a difficult proposition. The short version is that although the pay rate is much lower, it took much longer for projects to be completed according to specification, normally because of extra iterations. That company is already scaling back their plans with the realization that it's not an apples to apples comparison.
I do believe in capitalism and I think the government should be less concerned about job protectionism and more focused on the root causes of why public education is so horrible. If education continues to languish at the current pace we will eventually be at a competitive disadvantage to the third world, in which case I would not fault India or any other country. It was the global economy that made the US powerful and it will ultimately be the global economy that will be our downfall as we get even more fat and lazy.
The imbecile accountants and HR losers do not care. They only watch the bottom line and their prejudicial social engineering agendas, and care not one wit about quality. Anything and everything my company offshored to India took at least seven times longer to get any kind of result than what my team and I could accomplish, and in most cases they never could complete a simple troubleshooting task, let alone control a complex, capital development project. The accountants are the ones flying this craft into a crash landing, and they don't care.
If Indians are so much cheaper and more talented in Bangalore, then keep them in India. Do not hire them and bring them here to the United States. Since Bangalore is the new Garden of Eden, they will be much happier living there than here in Austin, the Bay area, New York, Raleigh, Seattle and LA. An ocean of technically talented professionals in the United States are still searching for opportunities at the same salary as the ones you immigrate into our country. Only media liars and HR imbeciles tell us Indians are cheaper. I know this because I offer employers to do the same work for 3% cheaper than all competitors, and I have twenty years more experience than any of them and I hold two technical masters degrees.
Yes, we can all thank the great Bill Clinton for the beginning of NAFTA and outsourcing. Remember when Ross Perot warned against this with his giant sucking sound speech. Now the president is over kissing backside in the outsourcing capitol of the world. It is lonely at the top but if you can't lead when you are holding the most powerful job on the planet, step down for the good of us all.
I wonder how long it is going to take Americans to realize that this president is not a liberal. What we have here is another corporate lackey continuing the work of the corporate fascist "New World Order" dream. How about it folks, do you see the "thousand points of light" yet? On the brighter side , however, we can expect absolutely no change for the next two years and more than likely indefinitely! Hello! there is only one political party in this country, and it isn't working for us any longer. Good bye Middle Class, it has been a nice ride but short.
I doubt that Bangalore needs an endorsement to be recognized as a great city. The agenda of the US President during this visit was to encourage Indo-US business partnership, and not to scout for a great location for American businesses.
Secondly, a big item on the President's agenda was security and defence contracts. Since Pakistan is an ally, the President cannot verbally acknoweldge Pakistan as a perpetuator of terror. But, by paying homage to the victims in Mumbai, he has shown that the US understands India's concern. This was necessary for gaining support for purchase of American Military hardware and technology.
I can certainly understand the anger and frustration regarding the job losses. A quick question though, how come nobody complained when all the manufacturing jobs moved out to China...before that to Korea, Mexico, Japan, Taiwan etc. Is it a case of the white collars cribbing too much! No doubt this is a serious issue for American people, white collar workers and others. But as the article indicated, jobs will move to wherver it's cheaper and more efficient. Today it's India, tomorrow it could be Vietnam or Nigeria.
This is nothing new, it's been happening since the industrial revolution. Instead of playing the blame game, people and the government should focus on fixing the root cause. But then that's not much fun, is it?!!!
"fixing the root cause."
American workers are over-paid, companies are over-regulated, and both are over-taxed. If we are to be competitive with the world, we first have to level the playing field. We can start with a flat national sales tax replacing all other federal taxes. That hits domestic and import goods the same, leveling that part of the playing field. Our politicians can negotiate a global business regulatory treaty, so all businesses, no matter where they are located, have to play by the same rules. Finally, labor has to throw off its communist union bosses and reorient their loyalties to the people who pay them rather than to the communists, socialists, and Democrats (but I repeat myself) who prey on them.
How in the world can you say that American workers are overpaid when I can't afford rent? Maybe union workers are overpaid (I firmly believe that THEY are) but the rest of us that aren't in a union are struggling to get by.
American workers are overpaid compared to the same skill set across the global economy. However, it's also true that our high per capita income also has Americans paying more for expenses by the simple fact that we have higher incomes. We can afford to pay more. The full transition to a global economy will take a long time to reach full efficiency and will have many hard and rough transformations. However, in the end it will benefit all.
We need to outsource our President....
The emperor has no cloths
It's a lie that there are not enough talented people in technology in the USA. Many many Americans with degrees, talents and experience in IT and engineering are unemployed. Many American university graduates in IT and engineering never get the chance to start their careers in IT and engineering because companies hire very small number of people in America. They prefer to hire in India only because of cost. Yes, only because of cost. Indians are not more talented than the Americans. The living condition in India is much cheaper than the USA. So, the Indians can afford a decent lifestyle at cheaper cost than the USA. America will lose more and more high-tech, IT jobs to India. Americans young generation will be more and more discouraged to pursue degrees in IT and engineering as they will know that they can't get jobs after graduation. Gradually, America will no longer be a technologically advanced developed country. America will become a third world country where many Americans will live without jobs, and in poverty. This will affect adversely the American power in the world. America will no longer remain a superpower. America's days are over unless our politicians do something to stop supplying technology, money and jobs to India.
The other thing this article fails to note is the difference in educational requirements. Most of the time, an IT professional looking for an IT job in America has to at least have at least a BA to even be considered for a job. In India, people train for a particular IT specialization like programming in C#, or SQL but aren't required to have any other type of formal education. Bottom line, an American has to go to college for four years before he can enter the job market whereas the Indian only needs one year, a year concentrating only on programming C# for example. Another issue is cost. An American student has to pay for the four years of college (10s of thousands of dollar in some cases) whereas the Indian student get the training free of charge. Indian bears the cost to help them reduce their high unemployment rate.
So how does America keep its jobs here when labor is cheaper and India is pushing their citizens to only learn what they need to get an IT job.
This is a complete falsehood. Please get your facts right.
#1. All Indian IT companies take only graduates with 3/4 year bachelor's degrees (computer science or other) at a minimum.
#2. Some people choose to take up additional courses POST their regular bachelor's or master's at their OWN cost. This is because competion is so intense (supply exceeds demand in the Indian job market) that people have to be from a good college (and with good grades) to qualify for a job or pick up an extra skill.
#3. Indian govt does not pay for an individual's college education. In fact, they don't even pay for school education which I believe is largely free in the US. Cost of higher education has gone thru the roof in India in the last 10 years BUT still not at the levels of US though.
America's days as a great power is over. Many many American IT, engineers are unemployed. American high tech industry, sensitive technology, money, investment and jobs are leaving America and going to India. More and more American students are becoming discouraged in going to IT and engineering becasue they know they will not get jobs after graduation. Unless our politicians do something to supply technology and hightech jobs to India, America will become a third world country in 10-15 years from now.
Although no one should discount the hardship and uncertainty faced by an individual who has lost his or her job, nothing is that black and white. The popular misconception is that outsourcing always means job loss and a windfall profit for the company doing the outsourcing. A more accurate perspective is that for companies, it is often a matter of staying afloat or struggling to grow, not getting windfalls, and with regard to jobs – when economies are not stifled by protectionism – job losses and gains tend to balance out. Please see more at my blog post Law Without Borders.
Furthermore, those American companies with manufacturing and service set-ups abroad haven't made these arrangements to take advantage of the tax deferral. They have done it because of lower operational costs, or because of the proximity to target markets, or for other reasons that may have nothing to do with tax breaks or outsourcing of jobs. Changing the tax code to remove the deferral will only create a barrier that will reduce the ability of U.S. companies to compete in today's global marketplace. If the U.S. government offers incentives and tax credits to companies that create more jobs for the American workforce, that might help a bit.
Vidya Devaiah
SDD Global Solutions
What a pant load! Once *they(The Owners) have reduced this country to third world status it won't matter any longer. The only thing standing in the way of this "New World Order" are the developed countries with a middle class. Once this obstacle is taken care of there will be nothing left but the working poor and the Owners, just like the serfs milling around the base of the castle way back when, hoping for someone to throw a scrap of food over the wall and realizing it will only be a bucket of crap or medieval "trickle down"
Greed and corruption are not the result of immutable human temperament-greed and fear of scarcity are in fact being created and amplified the direct consequence is that we have to fight with each other in order to survive. The World Bank is in fact a US bank supporting US interest for the US hold veto power over the decision as it is the largest provider of capital and where did it get this money you guessed it made it out of thin air through the fractional reserve banking systems. Taken cumulatively, the integration of the world as a whole, participate in terms of economic globalization and the mythic qualities of “free market” capitalism, represents a veritable “empire” in its own right. Few have been able to escape the “structural adjustments” and conditionalities” of the World Bank, the International Monetary Fund, or the arbitrations of the World Trade Organization, those international financial institutions that however inadequate, still determine what economic globalization means.
Such in the power of globalization that within our lifetime we are likely to see the integration, even if unevenly, of all national economies in the world into a single global free market systems, the world is being taken over by a handful of business powers who dominate the natural resources we need to leave while controlling the money we need to obtain these resources the end result will be a world monopoly base not on human life but financial and corporate power.