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Exporting jobs
- Thread starter UVLC
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Here is a company in NYC that promotes to financial companies the idea of using workers in India to do equity research...http://www.irevna.com/home.asp
Hard blow for many finance MBA's...congratulations on spending $70,000 for your MBA degree but we here at Merrill,Goldman,Lehman,and Bear have no job for you because we are saving tons of money by hiring workers in India for a tenth of the cost.
Hard blow for many finance MBA's...congratulations on spending $70,000 for your MBA degree but we here at Merrill,Goldman,Lehman,and Bear have no job for you because we are saving tons of money by hiring workers in India for a tenth of the cost.
Technically, any job could be outsourced. By that logic the whole companies will move over. However, there are a few consideration that will prevent this from happening.
First, most of the projects outsourced are non-core projects, such as various support and re-enegeneering projects. For example, support and maintenence of a COBOL based back office system can be safely outsourced. However, nobody is outsourcing analytics (and in fact, all analytics produced overseas are as crappy as it can get), since nobody wants to loose the "core competence". The logic is very simple - in America, if there a specialist who is good and knows something special, he will quickly get to the point of breakeven cost to profit. In India, for example, the specialist will be getting far less and there is plenty of room for him to grow to BECP. Thus, a key specialist can be easlity bought over by some local company that will take over the business.
Second, the actual cost of outsourcing is quite high, sometimes compensating for the cheap labor. For example, specification costs for IT projects that need to be outsourced soar 5 or 6 fold. You would find that equity research will be even less productive - since people there have no idea what to look for. Even though H&R Block outsources tax returns to India, the real clients with real money still go to local CPA.
Thirdly, salaries for MBA's equivalent in knowledge to American is not as low as you think. In fact, 10-15 years will equalize the salaries on both sides, you can see that happening for practically all information-related fields (see my previous post regarding IT salaries).
Busted out laughing at this, some no name company Irevna is going to change the world, lol. Ya, sure, the biggies are running to outsource inhouse research.
The jobs going overseas are grunt work, replaced here with higher paying work. No one noticed how lower paying manufacturing jobs were replaced with higher pay tech jobs during the 90's?
Amazing, I posted a question asking what kind of grant money foreign schools were receiving and no one replied even those who say the U of Moscow was so great. Subject changed from how great the so called foreign schools are to companies are exporting jobs and US MBA's are going to have a hard time.
Some of you have no idea what your posting in the first place.
"Amazing, I posted a question asking what kind of grant money foreign schools were receiving and no one replied even those who say the U of Moscow was so great."
Well it was completely paid for by the government before Communism fall and nowdays Im sure it is still all government subsidized with possible mob involvement?
I do not really understand your point about grant money. You know, all educational systems are different.
Well it was completely paid for by the government before Communism fall and nowdays Im sure it is still all government subsidized with possible mob involvement?
I do not really understand your point about grant money. You know, all educational systems are different.
Quote from axeman:
Soon... the CEO will be here
pocketing his huge bonus for saving the company so much
money. But he will be all alone in a huge office with the
entire rest of his company in india
So than the investors are finally recognize that they can simply invest directly in India, and pay lesser salaries and bonuses for CEOs over there ...
Unlikely, CEO or top management runs the show.
India can produce drugs at a fraction of what it costs to make them in the West. Indian chemists can reverse engineer a patented molecule within months. Copies of global brands like Pfizer's top-selling cholesterol drug Lipitor and Bristol-Myers Squibb's popular anticlotting drug Plavix were sold in India within two years of those drugs' global introduction. These reverse-engineered drugs were then exported to unregulated markets in Asia and Africa, sometimes a whole decade before their patents expired in the United States.
India's total drug exports, including those to the United States and Europe, grew from $1.8 billion in the year ended March 2001 to $2.5 billion in the 2003 fiscal year, according to the Organization of Pharmaceutical Producers of India, a trade group. Demand for Indian generics has enabled Indian drug makers to pour money into their manufacturing operations. Currently, they have 60 plants approved by the Food and Drug Administration, the highest number outside the United States.
Predictably, the holders of patents in the United States have been busy filing lawsuits to battle the patent challenges the generics makers file with the F.D.A. The litigation process is a long and expensive one, something only a few Indian companies can afford. And even if the legal battle is won, distribution in the United States poses another hurdle since Indian generics makers have neither a large portfolio nor a wide marketing network.
The patent fights over the United States' $17 billion generics market are particularly ferocious. "The U.S. is an attractive market for Indian exporters, whether shoes, software or drugs,'' said G. V. Prasad, chief executive of Dr. Reddy's. "It is huge, fast-growing and offers the biggest margins."
"In the 1980's, Western drug makers sneered at India's drug entrepreneurs asking, 'Who are these madcaps?' " said Dr. K. Anji Reddy, chairman and founder of Dr. Reddy's. "Today, they are staggered by our never-say-die attitude.''
http://www.nytimes.com/2003/12/26/business/worldbusiness/26drug.html
India's total drug exports, including those to the United States and Europe, grew from $1.8 billion in the year ended March 2001 to $2.5 billion in the 2003 fiscal year, according to the Organization of Pharmaceutical Producers of India, a trade group. Demand for Indian generics has enabled Indian drug makers to pour money into their manufacturing operations. Currently, they have 60 plants approved by the Food and Drug Administration, the highest number outside the United States.
Predictably, the holders of patents in the United States have been busy filing lawsuits to battle the patent challenges the generics makers file with the F.D.A. The litigation process is a long and expensive one, something only a few Indian companies can afford. And even if the legal battle is won, distribution in the United States poses another hurdle since Indian generics makers have neither a large portfolio nor a wide marketing network.
The patent fights over the United States' $17 billion generics market are particularly ferocious. "The U.S. is an attractive market for Indian exporters, whether shoes, software or drugs,'' said G. V. Prasad, chief executive of Dr. Reddy's. "It is huge, fast-growing and offers the biggest margins."
"In the 1980's, Western drug makers sneered at India's drug entrepreneurs asking, 'Who are these madcaps?' " said Dr. K. Anji Reddy, chairman and founder of Dr. Reddy's. "Today, they are staggered by our never-say-die attitude.''
http://www.nytimes.com/2003/12/26/business/worldbusiness/26drug.html
This is why I wouldn't bet on much from India and why the US always holds the edge against the world in the form of intellectual property, namely patents. The US exports grunt work freeing up minds to work on R&D and the life of the future while the world lag behinds, always trying to catch up.
Freeing up minds for R&D? Sure, if those workers were qualified for that.
Like another poster mentioned, for top-researchers there's already an international labor market, at which you have to compete with the world's best. I guess, your kind of response is only human, because who wants to face up to the fact that already now or at the last within ten years for every worker in the West there are ten Indians/Chinese waiting to do his job for a fraction of what he earns under abominable conditions? A taste of this can be had by watching the development of companies like Samsung and Kia. A few years ago they were considered low end producers of poor quality products. Nowadays Samsung can take on any premium brand in electronics and Kia produces the best-selling 4x4 in Holland. Its undeniable that countries like China have a strong comparative advantange in the form af a highly motivated, cheap and within a number of years also well-educated workforce. Whether the large middle-class in the West will be able to sustain it's standard of living is at least doubtful, imo.