India Outsourcing of Services

• 2040: India will be world's 2nd largest economy
• Recent econ success can be attributed to the business process services workers provide
• US and UK businesses outsource much work to India, especially to the City of Bangalore

  • Many Indian citizens = fluent English speakers due to colonialism
  • This gives India a comparative advantage when marketing call center services to English-speaking world
  • Bangalore = usually high broadband capacity
  • City is a long established 'tech-hub' due to early investment in the 1980s by domestic companies e.g Infosys, Wipro and foregin TNCs e.g Texas Instruments
• PROs

  • Call center workers earn good middle class wages (Indian standard)
  • Nightclubs + 24 shopping malls in Bangalore show relatively high purchasing power of new India 'techno-elite' who now normally earn £40 a week
  • Indian outsourcing companies = extremely profitable
  • 1981: Infosys founded - revenues of $9bn in 2015. Top 20 global companies for innovation according to Steve Forbes.
• • CONS:
  • Some business process workers report that they are exploited
  • Highly repetitive work - business often conducted at night (time zone difference); sometimes in 10 hr shifts, 6 days a week
  • Despite growth, gap between rich and poor sharply widened.
  • More billionaires in India than in UK but also has 86.8mn living in extreme poverty
  • 6% of total population live in extreme poverty
  • 2018: 65% of households had access to a toilet