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Outsourcing: Come Sail Away With IT
Last month, The Tennessean newspaper ran a feature article on a major outsourcing player based in the state, which despite the outsourcing issue being a politically charged issue, is not faltering. The article wrote that the "furor over 'offshoring' doesn't appear to be hurting business for Nashville-based ClientLogic Corp., one of the largest providers of corporate outsourcing services in the world. During the first three months of 2004, ClientLogic officials say, they have picked up $50 million in new or expanded contracts from 13 clients. By comparison, ClientLogic picked up $65 million in new business during all of 2003, when the company had total revenues of $433 million."
The Tennessean: Outsourcing Firm Thrives Despite Offshoring Flap
An IT Passage to India
India's national elections catapulted Sonia Gandhi to the head of the Congress Party, a decision that could have a big impact on the nation's tech sector.
"The prospect of a government in which communists could have a significant voice has rattled financial markets, which prospered under the defeated coalition. Investors have expressed concern that the new coalition could slow or even reverse economic reforms, including the privatization of state-run industries, which began under a Congress government in 1991 but gathered steam under [Prime Minister Atal Bihari] Vajpayee. One key stock index suffered its biggest one-day drop in more than three years Friday, the same day a leader of the Communist Party of India-Marxist (CPI-M) called for the dismantling of the privatization ministry. Congress Party leader Manmohan Singh, a former finance minister, tried to reassure investors, telling reporters that 'we are not against disinvestments per se, if it is shown to be in the national interest. We are open to all options,'" The Washington Post reported.
The Washington Post: Gandhi Steps Closer To Indian Leadership (Registration required)
An opinion piece in The Wall Street Journal today made a correlation between the Indian election results and Sen. John Kerry's opposition to outsourcing. "The Indian election upset that has unseated Prime Minister Atal Bihari Vajpayee may have one unintended victim: John Kerry. After making the loss of American jobs from outsourcing to countries like India a key part of his presidential campaign, the Democratic challenger may no longer have an easy scapegoat to rail against. Now, his suspicion of tech-savvy Indians who are speeding up their country's global integration will be shared by the new government in Delhi," wrote Swapan Dasgupta, former managing editor of India Today. "In the past, incumbents have been voted out for either their high-handedness or the perceived corruption of their governments. This was the case with Congress Prime Ministers Indira Gandhi in 1977, Rajiv Gandhi in 1989, and Narasimha Rao in 1996. This time, the rejection of Mr. Vajpayee was grounded in policy. The 2004 election was dominated by two themes: his leadership and the slogan 'India Shining.' This last may have been the creation of a clever copywriter, but it reflected the difference the Vajpayee government made over the past six years. Aimed at kindling patriotism with feel-good economics, 'India Shining' stressed India's IT and telecom revolutions, the roads program that will link the four corners of India, and the promise of becoming a global power by 2020. Deputy Prime Minister L.K. Advani, the government's ideologue, went on a bus journey across India publicizing 'India Shining' and promising a government that would unleash India's potential and creative energies. To gum-chewing 21-year-olds working in call centers and poor farmers in drought-affected India, he invoked the same vision of India as one of the five largest economies in the next 20 years."
The Wall Street Journal: Commentary: India Dimming (Subscription required)
India's IT Divide
Business Week has an article that explains why India's economic IT reforms did not help keep the existing power structure in the company in tow in the recent elections. "The mandate for change rode a wave of political sentiment that has swept the country: a potent mixture of rage and disgust at politicians who failed to deliver the benefits of reform to the ordinary Indian, especially in the rural areas. While 65% of Indians depend on agriculture for their livelihoods, the sector contributes only 25% of GDP, and that figure is falling. Very little of the money allocated for rural development by New Delhi actually reaches the poor, usually due to corruption and political and bureaucratic listlessness. And little of the benefits of India's structural reforms in sectors like finance, taxes, manufacturing, and privatization of state enterprises have trickled down to the countryside," the magazine wrote.
Business Week: A Win For India's Farm Team (Registration required)
The New York Times on Saturday reported on the country's massive digital divide. "As India prepared to vote this spring, strategists from its ruling party mapped the country's first modern electoral campaign. They boasted of sending four million e-mail messages to voters and transmitting an automated voice greeting from the popular prime minister, Atal Bihari Vajpayee, to 10 million land and mobile phones. But the hype over the high-tech campaign obscured these statistics: In a country of 180 million households, only about 45 million have telephone lines. Among India's 1.05 billion people, only 26.1 million have mobile phones. And while around 300 million Indians still live on less than $1 a day, only an estimated 659,000 households have computers ... The message that the Hindu-nationalist-led government had delivered the country to a new era of prosperity was belied by the limited reach of the media to deliver it. That gap - the coexistence of a growing middle class with the growing frustration of those excluded from it - helps explain why Mr. Vajpayee's government has been turned out of office in the biggest upset since 1977, when Indira Gandhi lost after imposing a state of emergency."
The New York Times: What India's Upset Vote Reveals: The High Tech Is Skin Deep (Registration required)
The news has not been good for India's financial markets. "India's stock market took the biggest plunge in its 129-year history Monday, prompting a halt in trading as investors panicked over how communist parties would influence the policy of the incoming coalition government of Sonia Gandhi," The Associated Press reported this morning. "Prices partially bounced back later in the day, but the main index still ended the day with double-digit declines, after Friday's drop of more than 6%."
The Associated Press via The Wall Street Journal: Indian Market Dives on Worries About Gandhi's Government (Subscription required)
Worth noting: CNET earlier this month published a package of stories on outsourcing.