Africa Enters Global Market For IT Outsourcing 442
nusratt writes "MarketWatch reports that many organizations 'are moving away from India as the place to outsource, because of the labor churn, and Africa supplies the highest rate of return on investments. New York's parking ticket system is managed from Ghana, Nigeria has an entire ministry for ICT, and Mauritius is building its own CyberCity. Gartner predicts that up to 25 percent of IT jobs today will be moved to emerging markets by 2010'."
Political stability anyone? (Score:4, Interesting)
Really now. India and Taiwan I can imagine as good sources for cheap labour. Stable and growing economies backed by a stable enough political systems. Now about most of Africa then? Only the countries at the northern most end and the southern most end ( Morocco, Libya, Algeria, Tunisia, Egypt and South-Africa. ) are anywhere near stable. The countries in the middle are plagued by atrocious economies that can't support anything, absolute lack of anything after YEARS of prolonged warfare and famine, no political stability whatsoever and plenty of tribal conflicts to boot.
I would think twice of investing resources in a country where the next day you might have to deal with 50k refugees from your neighbor camping on your grounds, the local fundamentalist warlord taking over control of the country and/or a tribal warfare because you've employed someone from tribe Z which pissed of tribes A to Y.
I really can't blame corporations. (Score:5, Interesting)
No chance (Score:2, Interesting)
There's a few places in Africa worth the trouble.
In the south, only South-Africa and only if the government can control itself and not become like the rest of Africa.
In the middle, maybe Ghana.
Up north, maybe some of the Arab countries.
IT == Plumbers? (Score:2, Interesting)
Re:ummmmm.... security? (Score:5, Interesting)
Oh. Wait a minute. No, it doesn't.
read it here (Score:3, Interesting)
My bottom line as a past identity theft victim is, I don't trust anyone or anyplace with my info now, although you are forced to provide it in some cases. I now use cash as much as possible, don't have an ebay or paypal, etc, account,never use them, don't pay any bills online, and tend to use postal money orders a lot for buying things "remotely", and even then, only if it's impossible to find or order what I want locally in a brick and mortar store. Yes, it's limiting, but still doable in our society, but it gets increasingly hard to do. It seems every business out there wants all your info, and nowadays every other website wants your info just to look at the website. Screw it. I love the *theory* of the internet, and I use it up to what my personal-choice limits will allow now, but the *practice* of the internet as regards any sort of rational "security" is a 50/50 crapshoot near as I can see as soon as "money" is involved in any manner. If your software isn't insecure, then the humans at the other end might be insecure.
Re:Go fuck yourself (Score:4, Interesting)
Remember, a lot of the people around here watch Star Trek, where race == culture.
Re:Equalization means down. (Score:1, Interesting)
It is physically impossible for the entire world to have the US standard of living. The Earth would be sucked dry like a field after a swarm of locusts.
Look at the pressure China alone puts on oil and steel supply! Sure China is a big country, but image when south east asia, africa and the middle east all start to grow their economies out like that?
Something will have to give...And I don't think it is going to be the lifestyle of the CEOs that is going to go downhill...no it will us (the workers) who takes the standard of living hit. The Waltons, Bushes, Cheneys, Kerrys, Kennedys and all the other elite families will be just fine...but will YOUR family be fine? That's what you should be thinking about. Not if the Walton families stock holdings are worth 20 billion or 25 billion. (not including the 5 or so billion each all the walton kiddies are worth)
Re:ummmmm.... security? (Score:3, Interesting)
What comes around goes around (Score:2, Interesting)
I then said something like, "But what if say Etheopians came along and could do it for 30 cents an hour instead of your $2.00, putting you on the street?"
They dismissed the idea and thought I was joking.
Either way, brains are becoming a cheap commodity. The closer you stay toward marketing and dealing with customer whims the safer your career. The world is cranking out low-cost Phd's just like any other high-volume factory. One can learn J2EE even if they live in a tent and eat flies.
A quest for information... (Score:3, Interesting)
Let me guess where you grew up (Score:1, Interesting)
Re:ummmmm.... security? (Score:3, Interesting)
Managers have little incentive to care. If the outsourcing company leaks customer information, it's the customers who suffer -- not the manager or the company that chose to outsource.
As far as trade secrets and other things that could hurt the company are concerned, they probably don't outsource those as much, and when they do, again the manager doesn't get penalized because nobody knows where the secret leaked from.
Austrian Economics and IT (Score:4, Interesting)
The governments of these African countries, like the government of India before them, are in the process of subsidizing the development of what is perceived to be a cash cow of limitless milkability, IT. This process is nothing more and nothing less than seizing money at gunpoint from other, more productive domestic industry (natural resources development as one example) or getting it from dumber countries (like, say, the US and its billions of dollars of foreign aid, ironically likewise looted from the American taxpayer), and giving it to another industry to make it grow in defiance of market forces. Governments are subsidizing the production of millions of PhDs, handing out favors to "tech-savvy" "entrepreneurs" and foreign companies to take advantage of the perceived riches of the tech industry, not realizing a couple of very basic tenets of economics:
ALL OTHER THINGS BEING EQUAL, WHEN SUPPLY GOES UP, PROFITS (AND PRICES) GO DOWN.
and
IT IS NOT POSSIBLE TO CIRCUMVENT MARKET FORCES. USING GOVERNMENT TO FORCE THE ISSUE LOOKS BETTER NOW, BUT COSTS MORE LATER.
The problem is, this is not an endless phenomenon. It wasn't profitable to locate things in India before, for a multitude of reasons (lack of infrastructure, lack of education, social problems, whatever). It will likewise be unprofitable in the future, when their millions of PhDs are hacking cabs in New Delhi to make rent, or becoming farmers. (You can see this process beginning now. The market there has reached capacity, and other places - like Africa, Land of Ceaseless Warfare, Spam, and Disease - are being seriously considered as places to invest in tech, because the market in India is getting too inflated.) It sure as hell has been unprofitable and/or just plain dumb to locate any form of tech industry capital in basically any African country, where the odds of its being nationalized, destroyed, or devalued in the customary and predictable political upheaval are astronomical.
The cornucopia of benefit from IT and tech in general is mostly illusory. It came about in the US largely through a government/Federal Reserve easy-credit policy in the 90s that allowed all manner of idiocy to get funding and look great on paper (AKA the dot-com boom - pets.com, anyone?), followed by the bust when all of these crappy investments based on bullshit were exposed as the stupid ideas that they were. Yes, there is some benefit to tech, as long as it enhances productivity and quality of life. No, its benefit on life and productivity are not infinite, nor is this benefit anywhere near as bountiful as some think. It seems that the governments of other countries, enthralled by the idea of a trillion-dollar business tax base (or "loot pond") springing up overnight with a minimum of effort, are going to go down this same road with precisely the same heartbreak at its end. The citizens of these countries would do better to leave their neighbors alone and spend their time farming and defending their property from invaders. After a few decades of respect of property rights and natural rights have set in, then they could begin working their way up the industrial/informational ladder, and would be in a much better positioin than we are now. (For that matter, we in the US should probably take the same advice.)
Oh well.
light at the end of the tunnel (Score:2, Interesting)
Outsourcing to Africa. That's great news. I thought it took more time to take outsourcing there.
Next on the list: Cuba and North Korea.
After which this outsourcing madness will - hopefully - stop.
chess
Cybercity in Mauritius (Score:1, Interesting)
Since the last 2-3 years, the (democratic) government has decided to set up a cybercity and have identified a zone where all sorts of new infrastructures have been built (Internet connectivity, electricity, roads, housing etc)
The governement has also built in the middle of the cybercity a cybertower which is a 15-floor building with the latest facilities (like Internet connectivity).
We must now rent the space and, for the moment, some foreign (especially Indian and French) IT-related companies (mainly call centers) have already come.
Unfortunately, the private sector is not too keen to invest in the cybercity right now. In fact, apart from the cybertower, the cybercity is empty... The reasons for that are numerous: (1) the economic situation is difficult worldwide for most companies (2) the IT sector is very volatile and risky and (3) Mauritius doesn't have the required workforce (and I have to agree with that even though I am a Lecturer in Computer Science at tertiary level and it's my job to train IT professionnals...)
So for the time being, our cybercity is somewhat only a cybertower with some call centers...