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

Tue Nov 9 13:00:14 EAT 2010

Paul

As you work to develop the sector further ... can we split the BPO
Operators(Call Center) and IT/Software ?

While we may not create as many jobs, there is a case to be made for
IT/Software based on the fact that we are still in operation even bila
government subsidies etc etc

When we split, I would also ask that we do a local working group and not
focus on getting advice from the McKinseys of this world. Your local
operators understand and would advice the government better on how to grow
the space

Thanks

On Tue, Nov 9, 2010 at 9:07 AM, Harry Delano <harry at comtelsys.co.ke> wrote:

>
> 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 <kictanet-bounces%2Bharry>=comtelsys.co.ke@
> 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/>
>    - Comments<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/tab/comments/>
>
> INDIA REAL TIME HOME PAGE <http://blogs.wsj.com/indiarealtime/> »
>
>    - Email<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/#>
>    - Print<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/tab/print/>
>    - Permalink<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/>
>    -
>       -
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>       [image: Twitter]<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/#>
>       -
>       [image: Digg]<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/#>
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>    - [image: smaller]<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/#>
>    Text<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/#>[image:
>    larger]<http://blogs.wsj.com/indiarealtime/2010/11/08/the-obama-visit-an-outsourcer%e2%80%99s-perspective/#>
>
>  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.
>
> **
>  ** *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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