The NY Times responds to political pandering by the Democratic Presidential candidates.

Still, critics’ charges that trade is to blame are misguided. While trade can hurt some workers, most economists believe it plays a modest role compared with other forces in the economy, including advances in technology, the decline of trade unions and mushrooming executive pay. Many Americans benefit from freer trade, whether they are buying cheaper imports or exporting products.

The article goes on to paint an even clearer picture of global trade’s actual effect on the US economy.

Consider the four million manufacturing jobs lost over the last decade. That number is daunting — and the human pain behind it very real. But in most years the United States generates more jobs than it loses.

Suppose the critics are right and all those workers were displaced by cheap imports and factories moving overseas. Those lost manufacturing jobs — an average of 400,000 a year — amount to less than 3 percent of the 15 million jobs lost each year across the economy. Meanwhile, about 17 million jobs were created annually, which is why the unemployment rate at the end of 2007 was not much different than it was at the end of 1997.

Full article >> 

As a loyal Obama supporter, I’m prepared to withstand a bit of political pandering during a tough primary. Hillary’s not going away without a fight.

But, Obama’s latest appeal to the blue collar workers of Ohio - the “Patriot Employers Plan” - sounds as ridiculous (and misguided) as the Patriot Act.

Basically, the plan rewards companies for keeping jobs in the US - something I personally believe is admirable (after all, he’s not running for President of India).

However, the problem is that the plan is, well, stupid:

Mr Obama’s plan met instant scepticism from otherwise sympathetic Democratic economists who said it would require a large regulatory apparatus to put into practice. They also said that companies could “game the system” by spinning off overseas subsidiaries in order to reduce the offshore-onshore workforce ratio. ‘

“I would say that this plan is borderline unimplementable,” said a Democratic economist in Washington. “It is also puzzling. Normally presidential candidates only come up with plans that are unrealistic when they are losing. But Obama is now the favourite.

Mr. Obama, it’s better to stick with strong US training programs, the elimination of tax breaks for companies that have offshore labor (we don’t need them and shouldn’t get them), and most importantly, to stop the hypocrisy that is American economic policy. You can’t lecture others about buying your entertainment, agricultural goods, and Coca Cola, if you won’t give them a fair shot to sell to you.

Read the FT article >>

oDesk posts a map that highlights the cities, fees, approval ratings, and language proficiency of developers around the world.  

Although there is some skewing going on (I believe English proficiency is self-reported), the infographic is fascinating.  

the map

the full oconomy 

You do it every day and never think twice: buy something that was made in another country.

Maybe you make a big purchase, like a Honda or a BMW. Do you then refer to your car as your ‘outsourced’ ride? When you drink with your friends, do you get uncomfortable knowing that your champagne has been ‘outsourced’ to the French? How about when you eat a mango or a banana?

Of course not. Germans make better cars. The French know their wine. And produce comes from where it grows (or where people can pick it cheaply…California).

So why think of software that way? Global IT teams support cost advantages and time efficiencies that domestic teams simply cannot compete with. Done right, software can be developed more quickly and efficiently this way. From cars to wine to software, the principle is the same. It will inevitably get done where it can get done best.

As long as we refer to our work as outsourcing, we are stigmatizing something that is as old as civilization. What the monsoon winds did for the spice trade, the Internet does for software development.

So, let’s agree. Outsourcing is dead (long live outsourcing).

[and yes, this blog will soon have a new name]

Worldmapper.org warps world maps based on factors such as birth rates, GDP, and population. It amazes me how much more significant it feels to see a visual representation of something rather than to read facts and figures (which is why Al Gore climbing a ladder to show the rise of global warming in an Inconvenient Truth was an excellent touch).

Check out how fat India looks based on its population in 2050.

Kinda scary or exciting, depending on your feelings around volume and glasses of water (not to mention the presence of heavy metals in the water, the temperature of the water, the availability of that water, and perhaps the politics around access to that water - makes me want a coconut.)

Wanna see the US get fat? Check out their maps based on carbon emissions or GDP.

Sramana Mitra presents a logical, albeit frightening, twist on a solution for India’s struggling rural population.

The Atanu Dey-Vinod Khosla Marshall (should be available at the well-designed Khosla ventures website, although I couldn’t find it) plan goes a little something like this:

India’s economic growth depends critically on the development of its 700-million strong rural population living in 600,000 villages. The challenge is to manage their transition from a village-centric agricultural-based economy to a city-centric non-agricultural economy urgently.

The total rural population of India can be covered by about 6,000 RISCs each servicing the needs of approximately 100,000 people. By providing a full complement of services, RISC creates a ‘micro-city’ which seeds the formation of a city by drawing to it the population from the surrounding areas. RISC focuses on the development of the rural population, and not on the development of villages which are destined to be extinct anyway.

Sramana Mitra presents a twist, that given today’s outsourcing trend, seems perfectly logical:

I like the model. My suggestion, however, is to align each of these 6000 RISCs with a major employer, that can employ at least 5,000 people.

Arguments over economics aside, this scares me - probably because it seems like it could actually happen to a lot of cities, especially new “RISC” cities seeking to establish themselves.  Why not?  Their older brothers have spent the last 10 - 20 years clamoring for their piece of the outsourcing pie…within a government that is necessarily decentralized.

It could happen - a few years ago, companies like Dell became definitive in cities like Chandigarh - one of the factors that prevented Chandigarh from potentially being rebranded as DellWorld was its size.  A micro-city of 100,000 residents can essentially be owned by a corporation…mini-monopolies that can impose their will on cities.  Feels dangerous…besides, Orlando sucks.

Manish over at IndiAdRant summarizes a fascinating breakfast conversation between Narayan Murthy (Infosys) & Azim Premji (Wipro). After clicking over to the full interview, I was astounded at the striking similarity between Premji & Don King.

Jokes aside, a great conversation. The best quote comes from Murthy (he didn’t look enough like Don King to include his picture in this post), discussing the Tata-Corus deal.

To me, the confidence shown by Ratan and his people is, indeed, a watershed event in the business history of this country. When somebody writes the business history of India in the 2000s and 2100s, this will be described as a turning point in the history of the mindset of the Indian entrepreneur. That’s what I’m excited about.

Manish’s Summary

Full Interview

The Economist shares our astonishment at the 12.9% increase in the circulation of Indian newspapers:

…newspapers are struggling in Europe and America, but in India, as in China, they are booming.

I love this quote by M.J. Akbar (editor of Asian Age)

The language of aspiration is English and the medium of aspiration is the newspaper, so an English newspaper is almost a ladder on which this class seeks to rise.

(I can picture my little cousin, checking out a story on the Ambanis and plotting world domination)

While newspapers in industrialized countries continue to lament the loss of their audience to up-to-the-minute online competitors, India boasts 300 large newspapers…and seems to be adding new ones every week.

The future looks bright. At best, a mere 300m of the country’s billion-odd people are middle class; only 60% are literate. As the untutored crowds learn to read, they are likely to reach for a newspaper.

Besides, Indian papers are searching for ways to appeal to the illiterate class anyways:

Competition is forcing once-staid publications to spice up their content. Mumbai’s Midday tabloid has introduced a bikini-clad version of Birtain’s topless “page-three” girls, called the “Midday mate”.

The article also helped me understand why these newspapers have such atrocious websites…it’s easy to forget: only 1.2% of India’s population is online.

(more…)

Happy Diwali from doubtsourcing and the whole bcm team!

In the past few years, even Diwali has changed for those lucky enough to benefit from the economic boom in India.   Here’s to more of the same.