Financial Daily from THE HINDU group of publications
Friday, Oct 22, 2004
Info-Tech - Insight
Foreign employees of a software company at a colony on the outskirts of Hyderabad.
As India grows as a centre for knowledge work, exciting times are ahead, not only in terms of a broad spectrum of knowledge work coming here, but also in foreign nationals opting to work out of India. This trend is clearly visible across sectors, says G.B. Prabhat, Director, Enterprise Business Solutions, Satyam Computer Services. "Across every industry spectrum pharmaceuticals, market research, IT, or even manufacturing there is potential for knowledge work to relocate to India," he says.
When knowledge work relocates in small chunks there is little attraction for a foreign workforce to relocate to India. But when this happens on a much larger scale, many foreigners will face the prospect of either relocating to India or losing their jobs. For example, most IT majors like Infosys, Wipro, TCS or Satyam, which have offices in the US, across Europe, South-East Asia or China, are making a concerted effort to have the right ethnic mix in the workforce at their overseas centres. Satyam itself has a few hundred foreign employees and there are "discussions to rapidly diversify the ethnic nature of our workforce in India and outside. It is the right thing to do because, if you're going to be a citizen of the world, you cannot operate a workforce that is 90 per cent Indian and 10 per cent foreign and expect a majority of the revenues to flow in the opposite direction. That will not be tenable. At our centres outside India, we are making efforts to make our workforce multinational," says Prabhat.
Giving an example, he says the Chinese government is already talking to Satyam particularly out of Shanghai on how Chinese professionals, today, find India the most attractive destination for IT and want to send a host of Chinese graduates to do an internship in India "at no or nominal pay, provided their living expenses are taken care of. If we're able to absorb them and keep them in India after the internship, they would be happy to stay here."
He adds that in all the interviews his company is doing currently with people of different national origins, "we are being told by the candidates: `Please don't think that I would work only out of Germany or US, or UK. I would be willing to be as mobile as an Indian that you would consider for this position. If, on a later day, you feel that I must migrate to India and run a facility out of India, I would be more than happy to do it."
G.B. Prabhat, Director, Enterprise Business Solutions, Satyam Computer Services.
While this is for the future, he adds that there are already foreigners who are specifically asking for positions in India "because they see the future being here. They know that eventually India will provide them with everything that the western world gives them now, plus more if they are lucky. So they're asking for jobs here," says Prabhat.
Also, his company has a number of non-profit agencies working to increase the ethnic diversity of the Satyam workforce in India. "They are going to bring graduate students from all over the world who would do internships and be absorbed here. Our esteemed competitor Infosys has had delegations of foreign students doing internship in India. That is not out of just curiosity to see what Infosys or India is all about; it is also out of their abiding interest in running business out of India. So there are enough signals in the environment to tell us that relocation of foreign workers is going to happen in the knowledge industry in India." He adds that such requests come from American, British, German, Chinese and Malaysian workers, and at different levels in the workforce.
Would Satyam pay its foreign-origin employees in India the same kind of salaries it pays its Indian workforce? "Absolutely, being an equal opportunity employer, we'll have to abide by whatever the local circumstances demand."
On why foreign nationals would want to work out of India, Prabhat says, "The worldview they are all adopting is that all manufacturing will, in some manner or the other, eventually centre around China, and India will clearly take the lead in information flow. They believe there is a long-term future in industries relating to information flow, which will also involve knowledge work. Given our educational infrastructure, English-speaking ethos and the bias towards intellectual work in India, there is no choice but to relocate here."
And in this phenomenon, clearly the early birds will derive a greater advantage. And, in many ways, foreigners opting to work out of India will also get a higher quality of life at a much lower price. "For one thing, they will not be spending much time on menial tasks of the day which can be done by domestic help here. They're also looking at larger, more spacious houses and increased material comforts in what they can buy. But what they cannot buy are the roads, electric supply, etc, but these will improve," he says.
Prabhat points out that the most extraordinary improvement in India in the last 10 years has been in telecom. "A phone rings whenever you dial, there are no wrong numbers or lines going dead and the remotest corner of India can be accessed. Today, the India to US call has a far higher quality than vice versa. In most incoming calls, the voice is feeble as the lines are choked. But our outgoing calls are much better in quality than the incoming calls from many countries."
Of course, huge improvements are needed in roads, power supply and, above all, airports. "All our airports are in a terrible mess; even when we claim to renovate we do such a shoddy job, as we did at the international terminal in Chennai, which is worse than what existed earlier, even though larger. If we can take care of these things there is no stopping India. In education we're absolutely on top; our education system is far tougher ... that is why they say that Indians are groomed better for knowledge work and hence do well. Healthcare facilities in our metros are excellent. Coming to entertainment or sport, let's take golfing, which, for the Japanese, is much better here; their golf clubs are packed."
On whether foreigners would be willing to work long hours in industries like IT, where Indians put in 12 to 15 hours a day, with virtually no weekends, he responds, "What will be their choice? Once they are part of the system, it is very unlikely they'd be able to work differently and survive. I think the work ethic is still very strong in many economies. I don't think it is reluctance to work in as much as an opportunity to work. Also, they all know that if they were to resist on that count, they will face the graver danger of not having a job. So you have to play by the local rules and I expect them to comfortably adapt."
But the challenge as well as huge opportunity, when this large-scale relocation of jobs to India takes place, lies in the development of second-level cities like Coimbatore in the south or Pune in the west, says Prabhat, adding, "at the expense of a bit of modesty", that he had predicted this trend in 1997 in his book, The 3D Competitive Space: Managing in the New Economy (McGraw Hill India). Making a case for companies giving their workers "excellent lifestyles at slightly lower than regular salaries", he had argued, "People flocked to New York and Chicago and continue to flock to Delhi, Bombay and Madras because of the large number of jobs in these cities. If the same jobs are made available in much smaller towns, there would be a large number of takers since people would, for a given salary, be able to afford large houses and a better lifestyle."
He sees this already happening. "This will mean a more orderly development of the entire country rather than all the investment going to Mumbai, Delhi or Chennai. As this happens, the congregation of services will also move to these cities," he says, citing the example of Shanghai where the first few migrants "were really terrified, but today, Shanghai rivals any American city, and is sometimes even superior to an American city." But if foreign workers are hesitant to relocate to Shanghai today, it is on two counts language and uncertainty on legal rights. "But in India, even though onerous to deal with, there is a well defined legal system which dispenses justice, and India is strong in the international lingua franca, English."
So, if more Americans come and work here would it help to mitigate the outsourcing backlash? "Absolutely... but the wise way to project this is not as something that creates job losses but that which creates job relocation... enriching the whole world."
At the moment, Bangalore is clearly the preferred Indian destination for foreign workers, "but the infrastructure there is cracking at the seams, the traffic is much higher than in Chennai, there are more people for less land, pollution is high and frequent power failures take place. Chennai is an attractive alternative destination but I'm thinking of the day when Tiruchi, Coimbatore, Pune or Baroda will become preferred destinations."
Picture by K. Ramesh Babu
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