[kictanet] Outsourcing, a perspective following Obama's India visit

Tue Nov 9 09:07:09 EAT 2010

Hey Paul,

Thanks for highlighting this. A very important case study component, for our
huge talent pool
available currently in this country..

Harry

  _____  

From: kictanet-bounces+harry=comtelsys.co.ke at lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=comtelsys.co.ke at lists.kictanet.or.ke] On
Behalf Of Paul Kukubo ICT Board
Sent: Monday, November 08, 2010 3:22 PM
To: harry at comtelsys.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: [kictanet] Outsourcing, a perspective following Obama's India visit

Listers

The following article appears in the Wall Street Journal. Two points of note
for our reflection upon as Kenya. 

1. Labour supply shifting to small and medium sized businesses globally.
Kenyan talent providers can enhance their participation in talent websites
like freelancer.com to promote and sell their services directly.

2. On some services, India can deliver the project at a 10th of US prices
for the same quality. The India US dependency is very high even among small
businesses in the US which depend on Indian labour to provide basic IT
services. This is an opportunity for Kenya.

Enjoy the read...    

The Obama Visit: An Outsourcer's Perspective

*	Article
<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer
%e2%80%99s-perspective/> 
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INDIA REAL TIME HOME  <http://blogs.wsj.com/indiarealtime/> PAGE >

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By Arlene Chang

Outsourcing has been a major political whipping boy between the U.S. and
India in recent months but U.S. President Barack Obama and Indian Prime
Minister Manmohan Singh both tried to quell the controversy in remarks
before the press Monday. Mr. Obama said outsourcing was the subject of
stereotyping in the U.S. which has to be updated and Mr. Singh said India
was not in the business of stealing American jobs.

Matt Barrie is chief executive of Freelancer.com, an online marketplace that
connects businesses looking to outsource work with service providers, many
of them in India. The site has 1.9 million members. He talked to India Real
Time's Arlene Chang about his view of the U.S., India and outsourcing. Here
are edited excerpts.

<http://s.wsj.net/public/resources/images/OB-KT655_MattBa_D_20101108051230.j
pg> 

Freelancer.com 

Matt Barrie, chief executive  <http://Freelancer.com> Freelancer.com

IRT: As head of one of the largest outsourcing websites, you must have a
view on outsourcing of jobs?

Mr. Barrie: We were founded in 2004 and since then, our two primary markets
have been the U.S. and India - expectedly. Of the employers posting jobs,
90% of those jobs come from the U.S. and of the jobs being completed 90% are
done by Indians.

I do not see this as Indians taking away jobs from the Americans or
outsourcing as being a bad thing.

If anything, this has been a tremendously good exchange. You have about 25
million small businesses in the U.S. and each of them needs people to help
run and sustain their businesses. But they may not necessarily have the
money or budget to do it through normal channels. Here, the service
providers, a majority of which in the case of freelancer.com are Indians,
are providing those businesses with the services they want within their
desired cost.

IRT: Is it a stereotype in the U.S. that India takes away American jobs?

Mr. Barrie: It is a stereotype but the stereotype is actually contradictory.
Most of our members seeking services are small and medium-sized businesses
and each one of them needs to, for example, get itself a website and
maintain it. This need is not necessarily met by the supply available within
the U.S.

Small businesses are always thinking of getting their things done for a
lesser cost, they need to be constantly cost effective. The service
providers on our website provide those services to them at a fraction of the
cost. This enables small and medium-sized companies to cut costs, become
more competitive, and thus helps them grow their business - all of which in
turn helps the U.S. economy. As we talk, there are a tremendous number of
jobs being created in the U.S. just, say, in internet businesses, whose
back-office operations are being supported by outsourced hires.

IRT: What are the statistics for the outsourcing exchange on your website?

Mr. Barrie: Since we started in 2004, we have completed around 850,000
projects and seen $67.41 million traded. Of the 1.9 million users we have,
400,000 of them are from India and are service providers. A similar number
are service seekers from the U.S. The average cost of a job through our
website is less than $200. So, as an example, if someone wants to build a
website for their business they would normally have to pay about $2,000 in
the U.S. to get that job done. On freelancer.com, we have people who do the
job for $200. That's one tenth of the actual cost. The U.S. is the largest
poster of jobs for us and India has the largest pool of service providers,
but India is also a significant employer. After the U.S., U.K., Australia
and Canada, it is India that posts the highest number of jobs that need to
be done.

IRT: What is the future of the outsourcing industry globally?

Mr. Barrie: I think the next five years are going to be extremely
interesting. Labor markets are always in flux and while the big businesses
are doing the bulk of trade, there is already a fundamental shift in the
amount and direction of labor supply.  A huge amount of that labor supply is
shifting to small and medium-sized businesses globally and as that happens
there is going to be a revolution in places like India.

If a person wants to start their own small business, all they have to do is
go online and get someone who can get up a website for them and manage it -
all this done on a shoestring budget.

With more such businesses coming into being, there will be more work and the
jobs not available previously will be out there. I think the off-shoring of
the work of small and medium-sized businesses is going to provide an
unparalleled opportunity for the U.S. and India, helping U.S. businesses in
being more competitive and helping Indians get jobs that were not previously
available.

IRT: What do you make of President Obama's statement in Mumbai Saturday on
there being a stereotype in the U.S. about outsourcing to India?

Mr. Barrie: I think a lot of what he said is rhetoric. He is in a
politically different situation now after having lost the mid-term elections
back home. I think he is pandering to the Indian-American vote bank back
home when he said that, when he goes back to the U.S., he wants to be able
to tell his countrymen that India has in fact created 50,000 jobs for
America.

Ends

Paul Kukubo

CEO, Kenya ICT Board

Sent from my iPad

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