XIMB Organizes Talk on "Economics of Outsourcing" by VP-CTS

XIMB Organizes Talk on "Economics of Outsourcing" by VP-Cognizant Technology Solutions

One of the most happening economic events of the 21st century has been the phenomenon of outsourcing business. We are cognizant to the fact that India, with its good quality yet cheap labour, has amply benefited from this. To most of us, outsourcing of business may seem to have an impact only in the Indian scenario, but in actuality, the affect of this phenomenon is as global as can be.

It is quite clear, therefore, that most of us do not exactly have a clear idea of what this buzz on outsourcing is all about. To dispel some of the myths about outsourcing and present a much clearer picture, the campus of Xavier Institute of Management, on the 19th of September 2006, was graced by none other than the Vice President of Cognizant Technology Solutions, Mr. Siddhartha Mukherjee.

As Mr. Mukherjee was introduced to the audience, the welcome applause was aptly complemented by the eagerness to learn, exhibited on the faces of the young managers of tomorrow. The presentation stated thence. A legend of a manager himself, Mr. Mukherjee first gave a brief layout on how the entire discourse would go. Post presenting the agenda, he went on to talk about some of the popularly held beliefs about outsourcing, some of which were correct and some downright erroneous. According to him, the fact that quite a few people will lose their jobs is true. This is inevitable as the economic forces of demand for good quality labour together with the supply of cheaper alternatives for the same elsewhere, rule supreme in today's global economic environment. However, the belief that these jobs will disappear couldn't have been farther from the truth. What many people forget while reaching this incorrect conclusion is that the process of outsourcing actually creates job opportunities elsewhere around the globe.

A fear most of the people in the western countries are grappling with is that wage rates there will decline due to the effect of outsourcing. This, according to Mr. Mukherjee, is true to a certain extent. He justified his statement by stating that this was a simple yet inevitable economic cycle. This kind of a thing is bound to happen as the demand for more expensive labour falls. Then again, one must not forget that the wage rate of the emerging economies will rise as well. A large chunk of paranoid westerners are from the United States, and they feel that the U.S. economic recovery is not having the desired affect of creating jobs. This is a wrongly, albeit popularly, held belief. According to Mr. Mukherjee, outsourcing jobs offshore has nothing to do with this lack of job creation, which by the way, are finally on the rise, thus, negating this wrong belief.

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Contributed by -
Sumit Misra,
Member, IlluminatiX,
Media & PR Cell of XIMB,
Xavier Institute of Management, Bhubaneswar.

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