It is all very well for US politicians and the media to blame the country’s job loss on Bangalore. But would a cut-back on Bangalored jobs and a freeze on outsourcing improve the employment situation? Bangalore-ing is no longer in vogue; it is a disincentive for companies seeking Obama’s stimulus package. But job losses are reported still.
It is not because of the concern of the rich for the uplift of the developing world or the benovelence of corporate America, but because of their enlightend self-interest that so many jobs got Bangalored, for so long, till some time back. A pity,the US can’t bring the Bangalored jobs back to Boston. Instead, the US recession has had a seismic impact on India, by way of loss of high-paying jobs, notably, in the software industry. Economists reckon the end of recession is in sight, but the six million plus lost jobs won’t be re-created anytime soon. In earlier recessions, they say, the US economy had managed to bounce back because of a steady stream of tech innovations that gave impetus to economic growth with high-value jobs creation on a large scale. The current recession appears to have drained innovative juice out of the entreprenuerial America.
According to Businessweek, America’s position as innovation leader is no longer unrivaled. Time there was when the country had the best of universities, the strongest corporate research, and a government that invested agressively in areas such as advance communications and space exploration. Upshot was a steady stream of world-changing innovations such as the transistor at Bell Labs, and the Internet at the Defence Dept. It was in such a scenario US companies outsourced jobs to India for cost advantage, but a lot more high-paying jobs were created within the US through breakthrough innovations. This time, they say, the outsourced software and manufacturing jobs have largely been replaced by low-wage service jobs in fast-food and retail sectors. The trend is attributed to a dearth of breakthrough innovations in recent years; and this is happening at a time when millions of jobs have been lost to recession. The point made in the Businessweek article is that the devil is not in outsourcing. The key to a bounce-back in the US economy may well be in outsourcing R&D.
IBM is already into it, with plans to set up overseas ‘collaboratories’ that match up company researchers with governments, universities and companies in other countries. IBM is looking at Saudi Arabia, Switzerland,China, Ireland,Taiwan and India. It is their enlightened self-interest that drives IBM and a few others into making deals to tap global R&D potentials for breakthrough innovations. The projects are in basic research, the benefits of which may not be evident, or seem tangible, for the next three to five years. The research process tend to have innovative spin-offs with commercial potential.
Companies that have strong R&D base may well see that it is in their best interest to look beyond national boundaries and their own corporate walls, and seek radical, and globalised collaboration for life-changing innovations.