Outsourcing: What Does it Mean for India, China?

Dennis Faas's picture

In the last few years -- perhaps even decade -- the cost of wages has forced many technological jobs to a place in our galaxy far, far away.

Manufacturing as a whole has exploded in China and the Far East, but in recent years, the boom has expanded to include other nations in the near-Pacific theatre with a workforce capable of technological achievement.

The most recent market for manufacturing outsourcing has been India, but as its wage rates increase, its appeal to the North American and European tech industry decreases.

Outsourcing is most widely known as the delegation on internal duties to external corporations or general entities. As North Americans and Europeans have become unionized and simply demanding (perhaps rightfully so) when it comes to their wages, major industry leaders have moved their base of labor operations to places like China, Taiwan, and India.

From the automotive workforce to the technological industry, workers in these countries have been deemed capable of the same tasks as North Americans, just much cheaper. (Source: wikipedia.org)

In recent years, major corporations have sunk billions of dollars into developing overseas plants, but now the workers in the underpaid nations are fighting to increase their nest egg.

Or, at least pay for a nice dinner once a decade.

The result in India could mean a serious decline in demand for their products. With the international community now aware of their potential, major corporations -- some competing with home-grown product -- are muscling their way into the Indian market. As wages increase, so must product quality, and according to some, that still isn't at the same level as commodities from the United States. (Source: eweek.com)

However, this isn't the first time India -- or any "underdeveloped" far or near-east country has faced rising wages and a demand to meet that in quality.

In early 2005 it was reported that India had the fastest growing average salary amongst its regional competitors, including China, Taiwan, and Korea. In the year since, the American dollar has weakened, making the cost of rising wages in India an even greater problem. (Source: pacificnews.org)

Although China and India appear to be the next major global contributors to the technological industry, the (understandable) demand of workers for reasonable wages could cause far more than a few violent strikes or unionization.

In each, it could mean an economic revolution the world has yet to experience.

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