The Indian Economy Blog

April 11, 2006

Shifts in Working Conditions

Filed under: Business,China,Growth,Labour market,Outsourcing — Naveen @ 8:51 am

Two news incidents caught my eye that had a similar vein of job market conditions running through them. One, read about young American workers conducting part of their work-life in Bangalore in Americans seek opportunity in booming Bangalore. Two, labor shortage in China enables an increase in working conditions and benefits as portrayed in Labor Shortage in China May Lead to Trade Shift.

The buzz about the first one is interesting, would it make sense for the average American as well to entrepreneur from Bangalore “remote” location to offset the initial set-up costs? The second means that rural India could well benefit from the cost of production increase in China, in the long run. Policy lesson. Produce roads, especially lots of spoke-and-wheel connectivity. That will precipitate a demand for electricity and enable a decrease in transaction costs for micro-entrepreneurship.

Hat Tip: Development Bank Research Bulletin and Priyatam.

4 Comments »

  1. Hi ,
    this is about “Americans seek opportunity in booming Bangalore..”
    Question is should we celebrate (as a trigger happy community ) a small anomaly ? or we should be more concerned about incidents which are pointing to emerging trend ?
    The news when digged out is not really very inspiring. Americans are famous for aberration. So much so that aberration is norm there. When the person named Peter wanted to come to India, bangalore what is more important is his intension behind. He clearly was not looking for a long term employment in India. All he was looking for is a brief stint with a company famous for outsourcing. And being in the industry I assure you the kind of work outsourced there is often donkey work. (if you do not believe it , ask the employees not HR or some manager …) It is just that they did not automate this plain vanilla
    work and they need some human being to do this.
    Now what Peter is doing is he will go back to US in 2 years at the most and will tell his next employer ( the real employer ) that he knows how stuff work out there in the India , I can manage them better. He was just trying do something different. That is all. I am sure this is not something very inspiring thing for us.
    Now my grievance is on the way that news was presented is exposing only Half Truth. Some people went even further to tell us that some “American aspire indian jobs .” (I would pray for that day but it hasn’t arrived yet). Coming here means 70-80% salary cut for them. Ask any one how hard it is to miss even 20% of someone’s salary and you will know the hardship they are under in India.

    In the same article they have mentioned that there is a trend in US to go to emerging market to understand it , like Budapest , Prague ( if I am wrong spelling either excuse me , seldom they come in paper which I read ..) . So we people are actually celebrating the fact that we are now on par with Budapest and like . hah. Open up your eyes. Do not read news interpretation. Read the news .
    I am no pessimist to shrug off . I am a just a pure critic.
    So people open up your eyes.

    Comment by Ajeet ( the antithesisist ) — April 11, 2006 @ 2:59 pm

  2. «would it make sense for the average American as well to entrepreneur from Bangalore “remote” location to offset the initial set-up costs?»

    If you want to get funded by a Silicon Valley VC nowadays your business plan must include that too, at least in part.

    Some USA startups have been *entirely* staffed in India or Malaysia, check for example:

    http://seattlepi.nwsource.com/venture/191189_vc17.html

    Comment by Blissex — April 12, 2006 @ 5:16 pm

  3. Finding skilled labor in China has always been difficult, but there is no labor shortage there yet. Not even close. The first tier cities are getting more expensive, but this just means foreign companies are going to need to look more to the second tier cities, such as Dalian, Qingdao, Tianjin, to name a few.

    China Law

    Comment by China Law Blog — April 12, 2006 @ 11:41 pm

  4. rural India could well benefit from the cost of production increase in China, in the long run. Policy lesson. Produce roads, especially lots of spoke-and-wheel connectivity. That will precipitate a demand for electricity and enable a decrease in transaction costs for micro-entrepreneurship

    Yes, we need more and better roads. But what about a better rail system as well… Atanu had a couple of great posts on this subject some time ago… see here

    http://indianeconomy.org/2005/07/22/irts-part-2/
    http://indianeconomy.org/2005/07/17/an-integrated-rail-transportation-system/

    Comment by Prashant — April 13, 2006 @ 7:53 am

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