David T Darnell ([log in to unmask]) wrote:
: (All of Jerry Leslie's extremely informative message of 6/4/2002 at
: 13:46:54 hrs snipped)
:
: Jerry provides us with excellent information, not all boding ill for
: the future of Colorado or US senior programmers and the like.
It'll be interesting seeing how the U.S. handles so many people making
less than $ 25,000/year. They'll need places to live that they can afford,
perhaps boarding houses, which are rare in the U.S. They'll have to live
where public transportation is a viable option.
:
: But, regarding the outsourcing of data center services to India, how
: advisable is it to have important MIS operations based in a country
: that is at serious risk of war, including the possibility of nuclear
: conflict?
Good question, although the U.S. companies have political risk insurance
from OPIC:
http://www.opic.gov/
The Overseas Private Investment Corporation (OPIC)
that covers civil and political war:
http://www.opic.gov/insurance/welcome.htm
OPIC Insurance Main Page
"Whether it is the expropriation or nationalization of your assets
or losses that result from politically motivated violence such as
CIVIL OR INTERNATIONAL WARS, these risks affect businesses across
the globe every day. OPIC Political Risk Insurance provides the security
and peace of mind necessary to pursue opportunities in emerging markets,
places where the rules of the game can change drastically and suddenly."
OPIC's current cash reserves are only a little over $ 4 billion.
: India vs. Pakistan aside, is the region resonably stable ;-)
That doesn't seem to matter to the U.S. corporations. They've already
demonstrated that people are disposable by the way they treat their
U.S. employees.
Besides, they're already setting up facilities in Vietnam, where labor
costs are cheaper than in India:
http://www.vnunet.com/News/1130523
vnunet.com IT giants turn to Vietnam
IT giants turn to Vietnam
By James Middleton [28-03-2002]
"Emerging industry wins US government outsourcing deal
The US government last week signed its first deal to outsource
software development to Vietnam.
Under the terms of the six-month deal, the US state of Oklahoma will
outsource the development of a trade website to Vietnam-based
technology company Silkroad Systems.
A report published last week by Research Vietnam revealed that big
name North American companies are outsourcing to the country, along
with European and Japanese players.
Nortel, Cisco, IBM, Hewlett Packard, British Aerospace, BP and Sony
are just some of the names investing in Vietnam.
"We did not have any reservations about working with Vietnam-based
developers since the country has a vast pool of intellectual resources
that is largely untapped," said Hung Truong of Nortel.
Dan Stern, director of Research Vietnam, which produced the IT Vietnam
2002: Outsourcing to an Emerging Market report, said: "The fact that
Vietnam is starting to attract public sector work from the US
demonstrates that the country's emerging IT industry is finally
getting global recognition."
According to the report, IBM is setting up its own outsourcing centre
in Vietnam after successfully outsourcing projects to third-party
providers.
Le Quang Tri, IBM software solutions manager in Vietnam, stated: "We
are looking closely at Vietnam this year and may consider opening a
development centre in the near future.
"Work is going on and talks have already started between IBM and the
Vietnamese government."
William Baker, a director at Pacific Ventures, which will act on
behalf of the State of Oklahoma during the six-month deal, explained:
"If you can acquire the same or better technology and IT solutions at
50 per cent of normal cost, the bottom line becomes a reality.
"The combination of high quality work and lower costs makes Vietnam
a very attractive place for IT outsourcing right now.""
: Further, Indian companies providing these services would be attractive
: targets for Islamic extremists, would they not?
:
Many of the IT-related facilities in India are American-owned, making
them even more attractive targets.
These are some of the companies with facilities in India:
GE, Amex, Sun, Microsoft, MasterCard, Ford, GM, Compaq, Oracle,
HPQ (new H-P), Intel, Motorola, Accenture, EDS, IBM Global Services,
PricewaterhouseCoopers et.al.,
Ford Motor Company is saving $ 30-60 million by moving their IT and
IT-enabled work to India...
http://www.computerworld.com/softwaretopics/
software/appdev/story/0,10801,58739,00.html
Ford opens IT hub in India to save millions |
Computerworld News & Feature Stories
[snip]
"Ford plans to open a major IT hub in Chennai, India on March 29:
o The 80,000-square-foot facility will cost about $10 million to equip.
o It will handle CAD/CAM development, e-mail processing and application
development.
o The staff will include 700 to 1000 outsourced developers and e-mail
processors.
o Ford expects to save $30 million to $60 million per year..."
Those savings can be used to build a facility in Vietnam, Uruguay,
Spain, et.al., that can serve as a backup to the one in India.
The Economic Policy Institute has put out briefing paper that forecasts
U.S. unemployment to be 6.5% by the end of this year, and remain at 6%
throughout 2003:
http://www.epinet.org/briefingpapers/bp121.html
It ain't over till it's really over (EPI Briefing Paper)
"Slow growth will lead to rising unemployment in 2002
and high unemployment in 2003
[snip]
If the economy continues along its present course:
* Unemployment will likely reach 6.5% in November 2002 and stay
between 6.0% and 6.5% throughout 2003, even though GDP growth is
forecasted to return this spring. GDP growth will not grow fast
enough to keep unemployment from rising, let alone push it back
down to 4.0%.
* When unemployment reaches 6.5% in November, the black unemployment
rate will rise to at least 11.3%; the Hispanic rate to 9.0%; the
black teenage rate to 35.3%; and the rate for women who head
families to 8.6%.
* Several industries and occupations will have higher than average
increases in unemployment, especially cyclically sensitive
industries like manufacturing and construction as well as other
blue-collar occupations. Service industries have also been harder
hit in this recession relative to past downturns.
* The rise of unemployment from 4.0% in November 2000 to 6.5% in
November 2002 will reduce wage growth and work hours. A 2.5% rise
in unemployment reduces a middle-class family's earnings by 4.5%
(or $1,816) from what it otherwise would have been. For families
in the lower 40% of the wage scale, the decline in family earnings
will be twice as significant, dropping by 9.3%.
* The recession-induced departure from full employment-that is, the
increase from 4.0% to 6.5%-will likely end the recent period of
persistent hourly wage gains for low- and middle-wage workers,
reducing annual real wage growth by 2-3% for low-wage workers and
by 1-2% for middle-wage workers..."
That's enough to wonder how stable the U.S. will be.
--Jerry Leslie (my opinions are strictly my own)
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