competition report
1 Where Are the Indian
Googles, iPods, and
Viagras?
O
V E R TWO DEC A D ES ,
India has established
itself as the global hub for software development and back-office services. The
story of how Indian software engineers capitalized on the millennium-bug scare to create an information technology
(IT) services juggernaut has inspired countless other Indian firms to attempt to repeat the same feat for customer contact, analytics, legal, and medical transcription services. In many of these segments, India has achieved a dominant share of the offshore market, with estimates that India accounts for
65 percent of the global offshore IT industry and 45 percent of the global business process outsourcing industry.1
1
H5674.indb 1
8/16/11 7:30:32 AM
INDIA INSIDE
Moving work offshore to India has had some inescapable implications for the mobility of white-collar jobs in the
Western world. The traditional concern in the West has been about immigrants coming onshore to compete for local jobs; now, the effects of that competition can be felt from distant offshore locations such as India. Although estimates of the extent of the flight of jobs from the developed world to India remain embroiled in controversy, there is little doubt that the process has caused considerable angst in the West. Support for free trade has fallen as people in the developed world have grown alarmed by its perceived threats, rather than charmed by its potential virtues. Thus, in a recent global poll of fortyseven countries, the United States came in dead last in the percentage of the population supporting free trade.2
Yet many Western elites argue that this fear is misplaced, because the distinctive advantage, still monopolized by the developed world, is innovation. For example, in The World Is
Flat, Thomas Friedman argues that apprehension about free trade is based on the mistaken assumption “that everything that is going to be invented has been invented,
Googles, iPods, and
Viagras?
O
V E R TWO DEC A D ES ,
India has established
itself as the global hub for software development and back-office services. The
story of how Indian software engineers capitalized on the millennium-bug scare to create an information technology
(IT) services juggernaut has inspired countless other Indian firms to attempt to repeat the same feat for customer contact, analytics, legal, and medical transcription services. In many of these segments, India has achieved a dominant share of the offshore market, with estimates that India accounts for
65 percent of the global offshore IT industry and 45 percent of the global business process outsourcing industry.1
1
H5674.indb 1
8/16/11 7:30:32 AM
INDIA INSIDE
Moving work offshore to India has had some inescapable implications for the mobility of white-collar jobs in the
Western world. The traditional concern in the West has been about immigrants coming onshore to compete for local jobs; now, the effects of that competition can be felt from distant offshore locations such as India. Although estimates of the extent of the flight of jobs from the developed world to India remain embroiled in controversy, there is little doubt that the process has caused considerable angst in the West. Support for free trade has fallen as people in the developed world have grown alarmed by its perceived threats, rather than charmed by its potential virtues. Thus, in a recent global poll of fortyseven countries, the United States came in dead last in the percentage of the population supporting free trade.2
Yet many Western elites argue that this fear is misplaced, because the distinctive advantage, still monopolized by the developed world, is innovation. For example, in The World Is
Flat, Thomas Friedman argues that apprehension about free trade is based on the mistaken assumption “that everything that is going to be invented has been invented,