The emergence of the Indian outsourcing boom caused a lot of concern initially among American workers and politicians, worried about jobs. But it wasn't too long before it became clear the addition of more skilled worker, in technology and services, was a positive development, and that the market was capable of correcting any short-term pain. Still, the industry continues to change; the New York Times has a pair of articles today about some of the challenges facing Indian outsourcing firms. One of the big problems is that contrary to popular mythology, there's not a never-ending reserve of highly-educated, English-speaking workers. Though we often hear about how many engineering graduates come out every year in India, many of them are not sufficiently skilled so as to be employable. That problem is in part due to problems in the education system, particularly at the higher levels. Another interesting development is that these firms are increasingly courting employees abroad, including some from the US. Some of them will work in India, in management roles, while in other cases these outsourcing firms are feeling the need to beef up their physical presence in the countries of their clients. You could call this the reverse of the brain drain, the phenomenon whereby top talent from developing countries often comes to the US for opportunity, but what it actually shows is that national origin of countries or employees is increasingly meaningless. And next time some economic events cause you to start panicking, perhaps you should wait a few years to see how things unfold.
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