Outsourcing
There's a controversy in many countries about what is
called ‘outsourcing’, that is when companies contract out areas of their organisation
to other companies, often in other countries. In one form or another, this trend
has been going on since the 1950s. Hong Kong with its much lower wages was able
to make cheap goods at prices that English manufacturers could not compete with.
Singapore and Malaysia grew rapidly by producing electronic goods cheaply to fuel
the computer age. Eire attracted electronic and computer companies, subsidised
by the EU, to reverse the outflow of its population.
So when companies move their services to India, where cheap labour allows them to undercut their Western counterparts, they are simply following the same trend. Eventually, India, like Singapore, will raise its standard of living so that its workers will have to receive competitive wages to the West. China is following the same trend but are producing manufactured goods rather than supplying services.
Redundant computer programmers in America now find themselves in the same position as car workers and other semi-skilled workers have in the past. People dislike change and blame those who have taken their jobs, but this is how these countries have risen up to the same standard of living as the West enjoys. The same people who complain about poverty in the developing countries, often also resent globalisation, although it is this globalisation that allows these countries to raise their standard of living.
When electronic manufacturing moved to countries such as Singapore, America stayed
ahead by developing systems and software. In England, there was huge shift when
coalmines were shut down and steel plants were shut in the 1980s. People who had
spent their lives working in a mine or a steel mill were made redundant. Often
they came from generations of workers in the same plant. The work in these places
is often boring and soulless. Most workers don't do these jobs because they enjoy
them, but because they need the money and know of nothing else. Suddenly, life
presents them with an opportunity to move onto something more rewarding and they
resent it.
In India, many of the jobs being outsourced are in call centres. In Australia, and I suspect in most Western countries, this is usually semi-skilled work and has many similarities to production line work. It is routine and strictly regimented. In India, call centres employ graduates and it is considered high-prestige work, even though the employees are paid less than in the West.
In order to stay competitive, Western countries have to stay a step ahead, in the same way as they have done in the past. However, there are two main differences to similar conditions that existed previously. The first is the sheer scale of countries such as India and China. They have over a billion (1000,000,000) people. If all these people were to reach a similar standard of living as the West, there would not be enough petrol for the cars or bricks for the houses, and in any case, if they reach a high standard of living, who would produce the cheap goods?
The second problem is that the Western economies are running out steam. Recent apparent growth has been on borrowed money. If they collapse (and this is quite probable), they will bring the developing countries down with them.
