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Africa Enters Global Market For IT Outsourcing 442

Posted by michael from the race-to-the-bottom dept.
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'."
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Africa Enters Global Market For IT Outsourcing More

Africa Enters Global Market For IT Outsourcing

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  • ummmmm.... security? (Score:3, Insightful)

    by JeanBaptiste ( 537955 ) on Sunday July 25, 2004 @05:48PM (#9796732)
    Would you trust any sensitive customer data in Nigeria? Im not being racist, just that they dont exactly have a glowing track record.
    • "Would you trust any sensitive customer data in Nigeria? Im not being racist, just that they dont exactly have a glowing track record."

      Just so ya know, you would have sounded less racist if you had mentioned the Nigerian scam (419 I think?) as a point for why anybody'd trust them.

      I'll be honest, though, I don't think it's all that fair to generalize. Sadly, though, I share the same fear, too. Hopefully one day I'll evolve.

      • Re:ummmmm.... security? (Score:5, Interesting)

        by Dibblah ( 645750 ) on Sunday July 25, 2004 @06:23PM (#9796919)
        No. In fact, it *is* fair to generalize. If a country is cheap to outsource to, it means that labor costs are cheap. Which means the workers get paid little. This is fine (commercially speaking) when you're just making running shoes. But when you're handing out IT support and the workers must have access to sensitive financial and proprietory information to do their job, this has to be something that crosses a managers mind.

        Oh. Wait a minute. No, it doesn't.
        • It isn't a coincidence that the highest rates or crime are found in the poorest areas (neighborhoods, cities, countries.)
          And any country that is a fiscal bargain compared to India is very, very poor.

          I will leave the rest of that equation as an exercise for the reader.
          • Can Nike afford to hire security to stop shoe thief in China, yes.

            Can Nike afford to have 20 pairs of shoes stolen a day in China, absolutely.

            Can Nike afford to pay $1 US a day for an employee in China, yes

            Can Nike afford to pay $100 US a day for employee in US, hell no.

            Now replace the word shoe with computers. Capitalism is the same everywhere.

        • Re:ummmmm.... security? (Score:5, Insightful)

          by drooling-dog ( 189103 ) on Sunday July 25, 2004 @09:30PM (#9797870)
          I don't think that embezzlement is a primarily a crime of the desperately poor. Greed knows no bounds whatsoever, and there are plenty of well-healed corporate executives who are happily ripping off their shareholders big-time in spite of their wealth.
        • "But when you're handing out IT support and the workers must have access to sensitive financial and proprietory information to do their job, this has to be something that crosses a managers mind."

          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,

      • Comment removed (Score:5, Insightful)

        by account_deleted ( 4530225 ) on Sunday July 25, 2004 @07:07PM (#9797118)
        Comment removed based on user account deletion

      • Re:ummmmm.... security? (Score:4, Insightful)

        by Gannoc ( 210256 ) on Sunday July 25, 2004 @07:24PM (#9797237)
        Just so ya know, you would have sounded less racist if you had mentioned the Nigerian scam

        Jesus Christ, he didn't say "How can you trust blackies with sensitive information", he said "How can you trust Nigeria with sensitive information".

        You can criticize a country, environment OR EVEN CULTURE without being "racist". I don't like beheadings in Saudi Arabia, human rights in China, or cutting off a girl's clitoris in India, but that doesn't mean I don't like Arabs, Chinese, or Indians. So everyone stop being so fucking sensitive.

    • Re:ummmmm.... security? (Score:2, Funny)

      by Anonymous Coward
      This sounds more like 21st century slavery to me. Yet again the white man is finding the black man is a cheap source of labor to be exploited. Instead of importing the slaves we're simply exporting the work for it to be processed there for slave wages and shipped back to our wonderfully ignorant consumers. Free the black man from the white man's corporations, ban all trade with Africa before it is too late and we have to fight another civil war over this.
    • UIt is not racist to point out that fraud committed by Nigerian outsourcing employee will not be subject to the jurisdiction of the US. A phone call that starts out, I'm agent Mulder of the FBI just does not have the same weight as it does in the US, and vice-versa
    • Hell, they trust our sensitive data to the Indians in the name of 'saving money' - yea, they will eagerly and happily hand it over to the Nigerians.
      Because we are going to let them, just like we let them hand it over to the Indians.

      The day people start calling in and canceling our accounts and orders because the company has moved 'operations' or 'development' overseas is the day the trend starts to reverse. Until then, expect it to get worse.

  • Nigeria! (Score:5, Funny)

    by Megor1 ( 621918 ) on Sunday July 25, 2004 @05:48PM (#9796733) Homepage
    Oh yes this is the country you want to trust for your outsourcing needs. "Thank you for calling Dell,.... Well sir I think I know how we can fix your computer problem, you see my uncle Prince Zambar the great had $434,000,000 (FOUR HUNDRED AND THIRTY FOUR BILLION DOLLARS) yadda yadda yadda."

    • Go fuck yourself (Score:3, Informative)

      by autopr0n ( 534291 )
      FYI The the nation that produces the most spam is the Good Ole USA. Just because this scam is popular in Nigera dosn't mean that most nigerian's are scam artists. A couple of months ago over 500 scammers were arrested. Of course slashdot decided not to publish the story.

      • read it here (Score:3, Interesting)

        by zogger ( 617870 )
        I read about that "500 scammer arrest" here on slasherdot. Not sure-don't recall- if it was a standalone article or a reference in a subthread though, but defintely it was here.

        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 thi
    • I wonder ... for an article that practically begs for Nigerian scam jokes, how many will be modded as redundant? Mind you, the submission itself could probably compete successfully for a +5 Funny, so no complaints here :-)

  • Nigeria has an entire ministry for ICT (Score:5, Funny)

    by wfberg ( 24378 ) on Sunday July 25, 2004 @05:50PM (#9796747)
    And as it so happens the Nigerian ministry of ICT has developed a product for the US Department of Homeland Security. Problem is, that the DHS can only contract out to a US based company or individual. Seeing as this contract is worth 480 MILLION DOLLARS, they will be glad to give you 10% of that, if you were to act as an intermediary.. There are just a feeeew formalities to be handled, like, oh, a Nigerian ICT business license, and this thing called a Remmitance Fee. Honest truth. They e-mailed me about it just yesterday.
    • Being a Minister or working in a ministry in many African countries means getting a nice Mercedes or other car and a bunch of other perks. The ministry need not be one that the country actually needs. Hence you're going to find various ministries that do nothing useful and implement no useful policies, but will accept various bribes, trips abroad and "expense claims" from the government and those wishing to do business in these countries.

  • Its not racism...Nigeria has a problem (Score:4, Informative)

    by voss ( 52565 ) on Sunday July 25, 2004 @05:51PM (#9796751)
    Nigeria is like the internet scam capital of the world they lack the legal infrastructure to be a trustworthy place to do business.

    Thats not to say they couldnt turn it around...but its going to take a lot of work.

    • Re:Its not racism...Nigeria has a problem (Score:5, Funny)

      by 0racle ( 667029 ) on Sunday July 25, 2004 @05:55PM (#9796775)
      But they have proved that they have the telecommunications infrastructure and the ability to forge international business deals worth many billions of dollars.
    • Africa is a lot bigger than just Nigeria. Plus it seems any company trying to attract outsourcing would need to do a lot to maintain security protocols - otherwise no one would do business with them again.

    • Re:Its not racism...Nigeria has a problem (Score:5, Insightful)

      by bcrowell ( 177657 ) on Sunday July 25, 2004 @06:18PM (#9796902) Homepage
      I have to agree. I run a small internet business selling my own physics textbooks, and recently I got a $1300 order from someone in Lagos, Nigeria. Ran the transaction on her credit card, and then waited for the money to hit my account before I shipped the order. My merchant service provider called me up, and explained that they were holding the money because there was a high probability of fraud. Contacted the customer. Her response: "Oh, if that credit card number didn't work, that's no problem. I'll give you three more, and one of those will work for sure."

      The weird thing about it is the lesson it teaches about the banality of crime. I mean, c'mon, using a stolen credit card number to buy physics textbooks?? There must actually be students in Lagos who want to buy the books, and I suppose this is simply her way of increasing her profit margin.

      Reminds me of China, where all these U.S. businesses tried to move into the market, and then found out that the whole country was basically run by Communist Party gangster-officials. India may be screwed up in many ways (population, children's lack of access to education, ...), but they are at least a more-or-less functioning democracy with a more-or-less functioning court system.

      • China is run by the Communist party? Surprise, surprise!!! I mean, it's a good thing those companies didn't do a bit of research before coming to China and investing millions.

        Africa's problem is that it's not politically stable. I've often wondered why Africa isn't competing with China and India for low-wage manufacturing, and the reason is because if you invest big bucks in Africa, next week there's a coup and rioters burn down your facilities.

        China is politically stable. You can invest your money here

      • Shoulda sent her some P-P-Physics Books!

        Actually I doubt she was specifically interested in the physics books, but more or less found you as an opportunistic score. She was looking for easier to sell loot and came across your listing for $1,300 in books, figured that it was worth her 5 minutes to see if she could scam you because if she does succeed she gets free books, and if she doesn't there is absolutely no recourse nor any real punishment for trying. You may not exactly need a new wall poster of Mik
      • At current textbook prices (over $100/book) ...
  • Whatever about the labour markets in India and China, the real reason for this move is too keep wages, everywhere, down. If the Indian or Chinese programmers start asking for an extra 50 cent an hour, move it to Africa. And hey! There's still South America and Latin America id things go wrong there too!

    I know outsourcing is supossed to bring everyone up to the same level, but what happens if a cycle emerges, whereby companies just pick a region on a decade by decade basis, keeping wages down permenatntly! They'd like too you know. But that's worst case senario

    Best case, years of outsourceing leads to an equalisation of wages globally. Lets just hope those wages are the level we're used to and not the level programmers in El Salvador.

    • Re:Keeping Wages Down (Score:4, Insightful)

      by _Sharp'r_ ( 649297 ) <sharper@@@booksunderreview...com> on Sunday July 25, 2004 @06:06PM (#9796842) Homepage Journal
      What this leads to over time is people in these third-world countries, as well as the people who are hiring them from around the world, gradually having a better life than they did before.

      As one country develops to the point where it's workers are efficient enough to be able to charge more for labor-intensive work like a call center, they move on to higher-paid work and the call center work gets moved to yet another country.

      You don't pay a backhoe operator to dig ditches by hand when you have a backhoe handy and it's not because you want to keep from paying the backhoe operator too much.

      There is a reason for this, it's called comparative efficiency and it's why trade between individuals exists in the first place.

      What you are missing is that in order to "outsource" work to any country, a company must pay the people who work there more than they were being paid already, otherwise they wouldn't work for them, would they?
      • What this leads to over time is people in these third-world countries, as well as the people who are hiring them from around the world, gradually having a better life than they did before.

        That is a logical consequence of importing Third World misery and desperation into the United States. If this country were to start acting in its own interests again, and not just the interests of its upper class, it would stop.
        • If this country were to start acting in its own interests again, and not just the interests of its upper class, it would stop.

          And these are this country's upper class people who are extatic about saving 3 bucks on $7, Made in China shoes in K-Mart, right? Hmm, I thought they had their shoes handmade in Paris or London...

          Remember, corporations would not outsource their labor if there would not be enough demand for cheap(er) (though maybe poorer quality) things, eventually there is someone paying with his
      • There is a reason for this, it's called comparative efficiency and it's why trade between individuals exists in the first place.
        True to a certain degree. But you have to take into account that there once was a similar situation between individuals. Which led to the formation of unions. Now, there are also competing individuals but far 'better' controlled because not easily able to unionize.
        And there are various types of market failure which the rabid pro-outsourcers overlook. Things like infrastructure etc

      • they move on to higher-paid work

        The problem is that assumption right there. As the mathematical gymnastics the US Gov't is going through right now to try and keep the unemployment rate down show, they DON'T move up. They never have and they never will, because the "higher-paid" work gets moved around with the call centers. Afer all, quality doesn't matter anymore, so why not?

        I predicted this over a year ago - it's corporate piracy, pure and simple. They drain a country dry and then move on.

    • Equalization means down. (Score:3, Insightful)

      by Anonymous Coward
      The US standard of living is based on cosuming 60%of the worlds resources. So there is a problem bringing everybody up to that level.

    • yeah, right.. (Score:2, Informative)

      by keeboo ( 724305 )
      Whatever about the labour markets in India and China, the real reason for this move is too keep wages, everywhere, down. If the Indian or Chinese programmers start asking for an extra 50 cent an hour, move it to Africa. And hey! There's still South America and Latin America id things go wrong there too!

      I think that South America is already quite expensive for that alreay... Perhaps Central America instead.
    • If you've hung around outsourced call centers, you would of have seen this happen in the last 5 years or so.
      Dell (or whoever) had a contract with a us outsourcer, techs got hired on at $12+ an hour by the outsourced company.
      Dell begins to get greedy, begins to try to re-negotiate and pay less for the same service.

      Outsourcer becomes fed up at some point and tells Dell to piss off.

      Dell ships jobs to India, pays $2 an hour.
      US outsourcer lays off the dell techs. Of course, the highest paid ones get laid off f

      • Re:Keeping Wages Down (Score:3, Insightful)

        by hazem ( 472289 )
        And people wonder why most tech people do not recommend Dell. Frankly, they suck. Our school district switched from Dell to a no-name computer outfit. Sure, there are some teachers complain, because they see the Dell commercials and think they're better. I ask them to give me evidence that the Dell computer is better than our no-name brand. It never comes.... the "Dell Dude" does not count as a qualified source for computer information!

        I love it when the Dell salespeople call and ask why we switched,

    • I know outsourcing is supossed to bring everyone up to the same level, but what happens if a cycle emerges, whereby companies just pick a region on a decade by decade basis, keeping wages down permenatntly! They'd like too you know. But that's worst case senario.

      Or - the people could start their own companies, and stick it to the man.

      What is it with this defeatist attitude around here? If you hate your job, then quit, and start your own company! BE YOUR OWN BOSS!!! Reap your own dividends!

      Liberty. Wh

  • Comment removed (Score:3, Funny)

    by account_deleted ( 4530225 ) on Sunday July 25, 2004 @05:51PM (#9796755)
    Comment removed based on user account deletion

  • Light and Fluffy, but interesting (Score:5, Informative)

    by lofi-rev ( 797197 ) on Sunday July 25, 2004 @05:52PM (#9796760) Journal
    It's not super in depth, but over at cio.com they have interactive maps [cio.com] comparing different parts of the world for outsourcing.

  • Sure, send money to Nigeria (Score:3, Funny)

    by Woy ( 606550 ) on Sunday July 25, 2004 @05:53PM (#9796761)
    Yeah, i'm glad money is flowing into Nigeria, as i am about to complete a transaction with a Nigerian prince that will settle my money problems for good. I laugh at thee.

  • Nigerian ICT (Score:2, Funny)

    by Anonymous Coward
    Dear Sir:

    I represent a technology company employing thousands of programmers whose founder recently suffered an untimely demise. Without his leadership, these programmers remain without work, and soon will drift away to find other jobs with the government. If I could find an overseas company to employ these programmers, we could avoid the government acquiring these workers and save your company millions of dollars in the process. I propose that you keep 90% of the savings, while 10% goes to me as a find

  • language gap (Score:2, Funny)

    by jokach ( 462761 )


    Chief among the strengths of the African continent, says Rive, is the fact that English is really strong. "It is a different accent, but it is well understood.


    Maybe now we can understand the person on the other side of the phone ........
  • Yes, capitalism _will_ solve hunger in Africa.

    (And cut the 419 jokes, already. Christ, so obvious)
    • If the capitalism comes in the form of small ventures it probably will save Africa from famine. If it comes in the form of internationally funded corruption (aka the IMF) or in the form of mega corporations it will simply keep the people impoverished for another several decades.
      • Yes. Because International Corporations are running rampant in China and India, causing widespread decrease in standards of living.
        Or maybe not. The poorest countries in the world are those with very low per capita foreign investment (ie. Big Bad Corporations). You do the math.
    • No, it won't. The places that are starving are not the places that will have phone centers. The places that are starving tend to have very corrupt governments which won't allow their people access to food. Most of these people cannot even read their own langauge, let alone English.
      It isn't like there isn't enough food to feed these people, it's that often times when we try to help, the governments won't allow many aid workers into the countries and when people try to ship food aid in, it just ends up
      • Actually what you would be describing wouldn't be capitalism at all, it would be more like fascism where property rights don't exist. Capitalism is not a classic 'ism', but simply a few steps below anarchy in terms of personal freedom. You can do whatever you wish, except take another man's property without his permission; including his life or posessions.
        A government that steals from its own people is not running a capitalist state in the first place.
    • how can capitalism solve hunger in Africa when it hasn't even solved it in America?

      maybe you meant some of the luckier Africans' situation will improve?
      • Hunger is solved in America, and in most first world countries. When was the last time heard of anyone dying of starvation in these countries? Malnourishment is not the same thing, since it often comes from making poor personal choices.
    • I wish there was a way to put seeds or spuds into the ground (dirt), put some water on them, shoo away the birds and rodents, and a few months or so later collect up baskets full of food. That would solve the hunger problems in Africa for sure.

      Naw that would never work. Folks need to understand that food doesn't grow on trees, for Christ's sake.
  • Churn in India may be a problem, but AIDS is a pretty big problem in Africa - which unfortunately will affect churn as well. A few stats on AIDS in Africa:

    * 5.4 million new AIDS infections in 1999, 4 million of them in Africa.
    * 2.8 million dead of AIDS in 1999, 85 percent of them in Africa.
    * 13.2 million children orphaned by AIDS, 12.1 million of them in sub-Saharan Africa.
    * Reduced life expectancy in sub-Saharan Africa from 59 years to 45 between 2005 and 2010, and in Zimbabwe from 61 to 33.
    * More t
    • AIDS is actually a problem in India too, but Gartner and crew don't want to let you know about them(because they are trying to sell you outsourcing). India has the highest number of HIV infections outside of Africa(about 4 million and growing)
      India and China are also trying to sweep diabetes epidemics under the rug. Because of genetic factors, some doctors consider Asians much more prone to diabetes as they settle down into office jobs than people of European decent.

    • Re:AIDS = Churn (Score:3, Insightful)

      by twiddlingbits ( 707452 )
      Yea all those deaths of AIDS in Africa..those deaths used to be counted as starvation, diseases brought on by Malnutrition, parasites, dysentery, diseases and the like. If AIDs was truly an "epidemic" as they say such as other diseases then 3/4 of the entire African continent would be dead by now after 25 yrs of HIV/AIDS infection. Deaths (such as from TB) that used to be counted as due to a specific disease or the horrid living conditions are now classified as AIDS "related" so the countries can get UN mon
      • That's correct. If you look at the criteria used for evaluating AIDS in countries like the US (HIV testing) and compare it to the criteria in most African countries (often based on dubious extrapolations from visible symptoms alone - no HIV testing), it's an absurd comparison. It's completely unscientific.

  • Political stability anyone? (Score:4, Interesting)

    by Dark Lord Seth ( 584963 ) on Sunday July 25, 2004 @06:03PM (#9796825) Journal

    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.

  • All is not lost (Score:3, Funny)

    by loginx ( 586174 ) <xavier@NosPam.wuug.org> on Sunday July 25, 2004 @06:07PM (#9796847) Homepage
    I'm working on a very efficient business model that I will implement very shortly... it goes as follows:

    Good Day Sir,

    My name is John Smith, I am a district manager at the New York Bank of Commerce (NYBC) and I am contacing you to obtain your help in an urgent matter.

    Several weeks ago, Prince Adhi-Butta Gambei, passed away in a plane accident on the coast of Los Angeles, leaving in our safe a fortune estimated to no less than 2,600,000,000 nairas. Yes, that is 2 Billion, six hundred thousand nairas (approximately USD $20,000,000 or Twenty Million US Dollars).

    With your help, I believe I may have an opportuny to move these funds to a separate account before my government can take possession of these funds but I need the help of someone familiar with the nigerian political system and I will provide you with detailed instructions that will help you pretend that you are the legitimate heir of Prince Adhi-Butta Gambei.

    Once the funds are transfered in your NYBC account, I will move these funds immediately to an off-short account, leaving in your NYBC 30% of the amount. That is 78,000,000 nairas... YES!! Seventy Eight Million nairas (or USD $600,000).

    However, openning an account at NYBC will require a minimum balance of USD $14,000 (1,820,140 nairas).

    I was able to place $6,000 of my personal funds in this account, however I require your help in providing the remaining $8,000 (1,040,080 nairas) in order to reach our goal.

    Best Regards,

    John Smith

  • I really can't blame corporations. (Score:5, Interesting)

    by Freston Youseff ( 628628 ) on Sunday July 25, 2004 @06:07PM (#9796849) Homepage Journal
    Seriously, if the labour is as skilled, what's the justification for keeping the labour in the 1st world? Moral crusading on the idea that this would only be justified if the outsourced workers were paid an identical wage falls flat on its face; "victims" of outsourcing would be identically as pissed as they are now as they're having wages undercut. We're going to have to admit sooner or later that your average African or Indian brain can process the simplicity of IT work as well as your average Euro-American IT worker. If you ask me, offshore workers still have a very large hurdle to jump in order to become as useful in processing IT labour: predominant mastery of major lingua francas.

  • No chance (Score:2, Interesting)

    by alwynschoeman ( 673941 )
    As an African I know that his is one prediction that is not going to become reality.

    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.

  • The U.S. outsources to Canada (Score:3, Insightful)

    by otisg ( 92803 ) on Sunday July 25, 2004 @06:14PM (#9796875) Homepage Journal
    I read an interesting article the other day. This article was describing Canada as a great place for the U.S. to outsource its jobs, because:

    1. same time zone
    2. same language
    3. similar work ethics and culture
    4. lower wages
    5. highly educated
    6. geographically closer ...
    Makes sense, eh?
  • hurriedly pasted text (before we start getting the: bandwidth exhausted for the next millennium message)

    By ECT News Syndication Desk 07/18/04 5:49 PM PT

    There are many areas in which African countries, eager to move into this space, can carve out a niche for themselves. The lucrative call center sector is one such area. Creating an environment that makes offshore outsourcing in Africa attractive can have many positive spin-offs for the continent as a whole, not just in terms of increased employment, a

  • IT == Plumbers? (Score:2, Interesting)

    by dustinbarbour ( 721795 )
    Eventually, the IT industry will be spread evenly across the entire globe. We're like plumbers. Everyone needs a plumber and everyone needs PC techs, IT managers, et cetera. I'm sure the plumbing industry started out in a few locales and plumbers got pissed when their company decided to hire plumbers and train plumbers in Africa instead of sending the plumbers back at home to do the job.
    • A plumber in pakistan isn't installing pipes in my house in the USA, the comparison is not valid. The issue with IT is that remotely administering networks/systems is entirely within the realm of possibility. With nothing more than a skeleton crew local to keep that connection alive, a skeleton crew that can even be shared by different companies, the bulk of IT tasks can be done overseas. Plumbers don't have to worry about hordes of cheap Indian plumbers remotely doing their job while not incurring the c

  • Same old corporate welfare (Score:4, Insightful)

    by danharan ( 714822 ) on Sunday July 25, 2004 @06:20PM (#9796911) Journal
    It is also vital that African countries nurture tertiary education, customizing tertiary education courses to capture the market and produce the needed skills to be attractive to investors.
    Yay, let's encourage corporate welfare for foreign corporations!

    In this tested and failed system, multinational corporations no longer need to pay training costs for their workforce. Governments also compete by subsidizing infrastructure - and sometimes by direct cash subsidies too.

    God forbid we actually train Africans in IT so that they could deal solve their own economic challenges.

  • You gotta love Gartner (Score:5, Informative)

    by foidulus ( 743482 ) * on Sunday July 25, 2004 @06:24PM (#9796921)
    Oh yes, offshore outsourcing is going to be huge! Oh and by the way, we do have our own offshore outsourcing consullting services! [gartner.com]
    Not saying they are wrong, but you just gotta wonder if they may have alterior motives....

  • WorkForce Strength (Score:4, Insightful)

    by Greenisloved ( 689734 ) on Sunday July 25, 2004 @06:26PM (#9796933)
    Reasons why India is better to Invest:

    1.Upcoming Youth workForce:

    I would like to remind everyone, that 50% of indian population is below 25 years of age and only 54% of popuation are literate.Slowly this is improving , people are imbibing english into their lifestyle more.After Bangalore, New Delhi ,Mumbai Hyderabad ,Chennai there are other cities like pune,Ahmedabad , Coimbatore ,Mysore coming up big time to meet up the standards.upLittle towns have already become better.Villages are improving etc.Looks like workforce is improving

    2.Upcoming alternative IT workforce:

    Already there are overwhelming amount of indians whose undergrad major is mechanical or electrical or some other non comp-sci degree but still they are seduced for quick bucks in IT.Honestly if u have good aptitudde and some basics of programming, one can sustain in IT field with hardwork.I was thus saying there is an upcoming workforce there.

    3.upcoming Quality English Workforce:

    Importance of english is overstressed in schools.Indians watch a whole lot of English movies , listen to Music and its almost a status symbol if you are good with english.And besides , Nerds are the heroes in India.You would watch Indian heroes in movies are projected to have a strong academic background .Anyone who can bring big bucks to the family is hailed and treated like a hero.So English workforce is improving tremendously.India has 18 official languages.Jus imagine if People in US speak so many languages.Languages come with diverse culture,customs etc.And English is undoubtedly the uniting factor among diverse Indians.All Work is documented in English becuz most of them dont know many regional languages.

    4.Content with Salary
    :
    Most of the people with non comp sci majors who work in other areas earn half as comp sci workers.And if an IT employee asks for more money , that reform would not be easy cuz there are so many talented Indians wthout jobs stalking streets day and night to bring themselves and their families to a decent existence.Btw , The salaries provided to many IT people are very high already.They enjoy superior life style.The point is "Salary increase is minimal and would not be a burden to investros".So in the long run, they are stable and cheap.

    I would still invest in India , cuz

    1.Abundant and still latent talented English speaking IT workforce
    2.Upcoming Quality of workforce
    3.Democracy and approachable govt policies.
    4.Already Established.
    5.Investment cost is low and not likely to grow higher and would propagate to different unexplored places.

    Sorry for the long Article , couldnt condense..

    • Mmmhh.... lets see consider this from the point of view of a country like South Africa:

      1.Abundant and still latent talented English speaking IT workforce Getting there
      2.Upcoming Quality of workforce Got that
      3.Democracy and approachable govt policies. Got that too
      4.Already Established. Check
      5.Investment cost is low and not likely to grow higher and would propagate to different unexplored places. About the same situation as India

      Now consider that Africa operates in the same time zone as Europe,
  • and this is what they had to say [uni-stuttgart.de]
  • ...all these outsourcing companies run out of newer, cheaper places to go? Asia, Africa, South America - all these places, as they climb the economic ladder, will eventually not be the cheapest place to outsource labour to.

    I wonder what sort of economic adjustments will happen when price isn't such a huge consideration in the provision of IT services?

  • at what point should we worry that (Score:3, Insightful)

    by holy_smoke ( 694875 ) on Sunday July 25, 2004 @06:37PM (#9796975)
    Core business functions like customer support, coding, design, and manufacturing are leaving North America?

    Admittedly I am a tin-foil hatter by nature, but its scary to me that corporations are throwing work en masse over the borders seemingly without concern for long term impact (loss of core competency in the North American organizations) or strategic risks (war, etc).

    At what point to we say to ourselves, "shit, we just sold the farm but we still need to plant crops(!)"
    • If the companies have enough people to make money off of, then they can afford their own army to protect the corporation.

      Most of these groups will be called, Enterprise Risk Management, or Corporate Asset Management...

      etc.. etc....

      Remember the Shinra Corp from FFVII?

  • US: Our Race to the Bottom (Score:4, Insightful)

    by reynolds_john ( 242657 ) on Sunday July 25, 2004 @06:56PM (#9797060)
    If Gartner says it, It MUST BE TRUE (tm). Clowns.

    The essence if stupidity is this - the more we "compete" with third world countries, the more we as a nation are going to lose. Third world countries don't have our living standards, our infrastructure, or many other opportunities we have worked for for so many years. They don't require benefits, which thanks to our broken healthcare industry (read insurance racket) eat up huge portions of company dollars. They don't require fair living wages, benefits, any kind of job security. So how do we compete globally? Do we push our standards into the toilet in order to accomodate corporate greed and government corruption?
    We have two options - force our standard of living down to the early 1900s level in order to "compete" (what we are doing now), or have a US-based revolution that redefines America as a self-sustaining entity - reliance on our own farmers, manufacturing industry, service sectors, etc. In this mode, we refuse to give up the quality of life we have built for ourselves, and start requiring other countries to come to our level playing field if they wish to participate.

    What amazes me is that with America's huge installed base of great programming and IT knowledge, there is no influx of jobs coming from the other direction.
    Are we SO overpaid that our economy must first experience a massive depression in skills, education and fair wages in order to "compete" (artificially) with the rest of the world? Do other countries' people actually believe that somehow they won't experience the same problems and that they will all become rich and famous; their management won't outsource back to America if the wages are cheaper?

    Say what you will about Unions, but my friends, America's Corporate Greed is ready and willing to exploit you, and teach your management the tricks of the trade. If you think we're overpaid over here, then check our statistics on labor at the department of labor and statistics url:BLS [bls.gov]. Note that union workers on average get a few $ more per hour than non-union. And yet, people still believe they are evil. This is typical claptrap from businesses that don't wish to impact their profit margins in order to "compete". How soon we forget the awful abuse our parents and grandparents experienced at the hands of large business - and the need that created unions in the first place - it hasn't even been a hundred years.
    Remember that everything over here costs a LOT MORE than in India or other countries, even if the vast majority of crap (and I do mean CRAP) we buy comes from China (hello, WalMart).

    So, anyone care to speculate where the bottom is, and when we'll reach it?
    • Say what you will about Unions, but my friends, America's Corporate Greed is ready and willing to exploit you, and teach your management the tricks of the trade.

      That's my entire fear about unions... They play into the hands of the corporations for the right price. And often it's a bit less than most people think.

    • Re:US: Our Race to the Bottom (Score:5, Insightful)

      by Corpus_Callosum ( 617295 ) on Sunday July 25, 2004 @07:20PM (#9797217) Homepage
      The essence if stupidity is this - the more we "compete" with third world countries, the more we as a nation are going to lose. Third world countries don't have our living standards, our infrastructure, or many other opportunities we have worked for for so many years. They don't require benefits, which thanks to our broken healthcare industry (read insurance racket) eat up huge portions of company dollars. They don't require fair living wages, benefits, any kind of job security. So how do we compete globally? Do we push our standards into the toilet in order to accomodate corporate greed and government corruption? We have two options - force our standard of living down to the early 1900s level in order to "compete" (what we are doing now), or have a US-based revolution that redefines America as a self-sustaining entity - reliance on our own farmers, manufacturing industry, service sectors, etc. In this mode, we refuse to give up the quality of life we have built for ourselves, and start requiring other countries to come to our level playing field if they wish to participate.
      There is one other alternative - the most practical one - make best use of our position as leader of the first world to innovate and bring new industries into existance (such as biotech, nanotech, advanced computer technologies [ AI, etc.. ], space tech, etc..) and allow the third world to commoditize the jobs that we cannot compete for anyhow. Allow them to take the jobs so that we can focus on doing what needs to be done anyway.

      • Re:US: Our Race to the Bottom (Score:4, Informative)

        by frank_adrian314159 ( 469671 ) on Sunday July 25, 2004 @07:52PM (#9797399) Homepage
        make best use of our position as leader of the first world to innovate and bring new industries into existance (such as biotech, nanotech, advanced computer technologies [ AI, etc.. ], space tech, etc..)

        Well, let's see...

        Biotech - most of the drug companies are already moving R&D to India; it's a lot cheaper when you can dump your leftovers in the drain rather than having to dispose of them properly. Test subjects are cheaper, too. GE has moved their next-gen MRI stuff there, too. So much for medi-tech. as well.

        Nanotech - Most MEMS fabrication is going to be done in China. Most economists say it doesn't pay to have your R&D for fabs far away from the fabs themselves. Most EDA outsourcing is already offshore (as is a lot of design). What makes you think MEMS work is going to be any different?

        Advanced computer technology - Name one that an Indian or Chinese brain can't figure out as well as an American one. Most robotics AI work now is being done in Japan. US funding for same is in the dumper and it is highly unlikely that publically traded companies will see the short term payoff to invest in speculative technologies.

        Space tech - Well, see what I said about "advanced computer technology" and double it for this. Plus the government is sloughing off research in this area as fast as they can.

        Bottom line, we don't have a premier R&D system anymore. Corporations don't want to fund R labs to fuel the D. Regulated monopolies (which once provided them) are now simply quasi-protected entities that still have to answer to the corporate shareholders. Government R&D continues to be slashed and most of that money goes to universities to train foreigners because Americans know that once they work for X years studying science and technology their jobs will be gone.

        High tech doesn't buy the future in a world of open and fast communication - the knowledge diffuses too rapidly. Unless you have some structural barrier to knowledge and/or job migration, it will happen.

        My opinion - we saw the collapse of unfettered socialism about twenty years ago. It's about time for the collapse of unfettered capitalism. My best guess says about five years from now...

  • I remember debating some Indian IT'ers who said things such as, "But if we can do it cheaper, we have the right to the job."

    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'
  • How possible is it to tax US companies that outsource its labor and provide subsidies to those who hire an all american work force?

    I mean yeah it sucks that those countries are in situation where american corporations feel it's less expensive to exploit their people but its just starting to get silly.

    A couple of weeks ago I visited my grandmother in North Carolina and fixed her computer. She started telling me horror stories about talking to "Bob" on gateway tech support. The funny thing about it is that
    • Its already started in limited ways. Dell and other companies that originally moved their support offshore have moved their corporate/government/education etc. support back to the US. This was due to wide spread disgust with the level of support from the overseas tech people (both in tech knowledge and in communication).

      Whether the average American consumer will continue to deal with it is a different question though.

  • A quest for information... (Score:3, Interesting)

    by east coast ( 590680 ) on Sunday July 25, 2004 @07:16PM (#9797187)
    So, fellow whiners and moaners, where do we find who's outsourcing and who isn't? I've looked a bit on the web and most of the sites seem to be done by 14 year olds with complaints about only one or two companies. Is there a real orginization that combats outsourcing?
  • FWIW, ACS has data entry people in Ghana. Second largest employer in the country, too. ACS does the back-end IT on tons of stuff; you've probably used their services today and not even known it.

    The other interesting thing is that ACS had a processing center in Mexico, and is moving it to Fiji. ACS chooses countries based on political stability, english language skills, and low labor costs. So either: Mexico's government has become unstable (doubt it), the english speaking labor has lost its ability to spea

  • Seriously, Africa needs this. India may be overcrowded but they have more graduate degrees than the entire US workforce and even the poorer folks are generally pretty civil. Africa on the other hand is one of the few places where a few hundred thousand people can be slaughtered and not get any attention in the news. There are many countries that are horribly poor. In the long run that hurts everyone. The key to battling this sort of problem is education. The smarter the kids are the less likely they will fa

  • As Theodore Vail once said... (Score:3, Insightful)

    by KC7GR ( 473279 ) on Sunday July 25, 2004 @10:33PM (#9798206) Homepage Journal
    Money is not an end. It is a means to an end.

    My own view is that short-term profit is NEVER as important as long-term survival. So many companies and so many people, though, rarely look beyond the next quarter's profits.

    Until that attitude changes WORLDWIDE -- until money itself is seen merely as the tool that it is, not as some sort of object of worship -- I think we'll continue to see this sort of insanity in terms of hemorrhaging jobs overseas.

    I fully expect that such a radical view will get moderated down as 'flamebait' or 'troll' or something similar. So be it. No amount of Slashdot moderation will change the truth.

  • Just two years ago I wrote [slashdot.org]
    about future of African outsource market. It was modded funny...

  • Austrian Economics and IT (Score:4, Interesting)

    by sdeath ( 199845 ) on Monday July 26, 2004 @01:56AM (#9798999)
    The fundamental problem is this:

    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.

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