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The aim of outsourcing isn't just cutting costs! In fact, the primary objective is to speed innovation and generate growth for the company. India is the pioneer of Offshore Software Outsourcing on the basis of its capabilities that are yet to be explored extensively. The software development and operations carried out in India are vital for the growth and future of the biggest, most profitable companies across the world. So much so, that the inexpensive software outsourcing services provided by brilliant Indian engineering, business, and medical graduates, have become indispensable to the American Economy.
While this rise of Outsourcing in India is viewed with great joy, as the road towards prosperity, it is also the cause of unrest among several Americans who feel threatened by the Indian techno take-off. Some consider India as the root cause for the increasing number of jobless Americans in the technical services. The rate is 6.7% for electrical engineers and 7.7% for network administrators. In all, the Bureau of Labor Statistics reports that 234,000 IT professionals in America are unemployed.
The offshore shift is the biggest cause for job losses. India is the biggest site for IT development work for big US companies. Plunging global IT costs, lower wages, are responsible for the revolutionary change. Most companies claim that they are not laying off any software engineers but are merely adding on to their resources by hiring Indian professionals. This would augment their US Research and Development teams, spur innovation and job creation, speed up product launches, develop more prototypes, and upgrade quality.
The trend, beneficial for most and disruptive for few cannot afford to ignore India. McKinsey forecasts that by 2008, the IT services and back office work will witness a boost and grow five-fold to employ 4 million people and generate $57 million worth software exports. This will account for 7% of India's gross domestic products. India is becoming a fast-growth economy on the basis of its brainpower!
For all the development, there is something very obviously lacking in India to achieve immediate growth like China. And that is the undisciplined work force poor infrastructure with Indian courts taking years and years to resolve contract cases and the Indian highways are more of choked, crumbled roads lined with slums and piles of garbage. The population is strife with illiteracy with the bureaucracy being corrupt and dysfunctional. Moreover, the governments 10% budget deficit is alarming!
Despite all the draw backs, India is positioned to have a more far-reaching impact on the US than China ever did! Indian knowledge workers have permeated deep into the marrow of the US economy and continue to sense enormous opportunity. They are all set to drive India's boom! The government of course needs to immediately tackle the problems plaguing India. With India forging ahead and clearing all bottlenecks one by one, the world's largest and rich Diaspora population will prove an asset!
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