Honey, I Decoupled Myself Ryan Krueger Mar 03, 2008 2:15 pm |
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I spent some time with a new friend who owns a thriving business who has half the company in Bangalore. His team in India has more schooling and training than their peers here, yet are eager to work for a fraction of the salary. The company is acquiring more office space and recruiting more talent from other firms in India. His partner actually chose to move to Bangalore and do the same work as my friend, effectively splitting the firm. What isn’t split is the tax burden, as in Bangalore the company qualifies for a tax holiday because of all the new jobs being created. It's expanding operations in India and he explained part of my own project would end up there. Cheap call center, IT consultants? Nope. They are high-end CPA’s and CFA’s.
Just in time for the surprisingly convinced majority of Wall Street to agree it's impossible for emerging economies to decouple from the U.S., these countries are busy working while we opine to ensure we’re right - it’s not a possibility its a reality and an accelerating one. My project is an example of a headwind in the U.S. – rising and more complicated taxes which are tailwinds in other countries busy flattening them. In this case it's something more; a job with a white collar.
I often turn to a wise futurist who attended my high school prior to creating the most popular and longest running reality show in television history. The fortune tellers he created share my best guess on the next leg of outsourcing.
We’ve outsourced something that won’t be cheap at all – a taste for our standard of living. I wrote last year, that we’d see India start outsourcing itself to even cheaper labor fueled by their own wage pressure. Come se dice “please hold, while we look into this” -- is Guadalajara, Mexico, the new home for Tata Consulting Services?
“We see costs rising in India and people becoming less available,” Gabriel Rozman of TCS said. “That’s why we’re going to places like Latin America, which has professionals and reasonable costs.”
I have a difficult time reading that quote, which I have done many times, and not believing we are about to witness consumption growth that will dwarf the peak in the U.S.; forget about this current debate about its valley.
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