In today’s economic climate, workers run the risk of hearing, “I am sorry, but your job has been outsourced to a company in India.” While outsourcing once focused only on jobs like call-center operators and data-entry positions, today it has branched into many other industries.
As Thomas L. Friedman points out in his book The World is Flat: A Brief History of The Twenty-First Century, Indian companies are expanding into reading CAT scans for American hospitals, working in the lucrative U.S. gaming industry and even preparing American tax returns.
The challenge for American companies and the students studying to work for them is to understand why this is happening and what can be done to adapt.
It is impossible to discuss outsourcing trends without considering the effects of globalization. As defined by The World Bank, globalization is “the growing integration of economies and societies around the world.” Using tools such as the Internet and global financial markets, international borders are increasingly transparent and the level of connectedness is on the rise. While many debate whether globalization’s effects are beneficial, the fact remains that it is happening, and we must understand this in order to comprehend the outsourcing phenomena.
The reason for outsourcing labor is based on common sense. Rarely a day goes by when there is not a story about the rising cost of health care in this country or our collective propensity to file lawsuits. These financial burdens, particularly on corporate America, cause companies to seek cheaper labor markets to stay competitive. To no surprise, entering stage right are Indian and Chinese workers prepared to accept lower wages to do the same jobs as Americans. What a deal.
From the American perspective, the most painful truth about outsourcing is that India and China seem to better understand the value of education in this global economy. Perhaps this is due to a difference in experience. For many Indians and Chinese, hardship is something they have grown up understanding firsthand. Academic achievement allows for differentiation in large populations and can be the promise of future success.
In February 2003, Time magazine’s Asia edition featured an article profiling a book that an estimated three million Chinese have bought titled Harvard Girl Yiting Liu. It covers a Chinese family’s approach to getting their child into a top-notch school.
In the magazine article, a very telling Chinese saying reads, “Academic success will give you a house with a golden roof and a spouse as pure as jade.” Unfortunately in America, the best way to that house with a golden roof seems to be with your own reality TV series.
Adapting to the challenges of the outsourcing environment of tomorrow must be achieved through the molding of the education system of today. As Bill Gates rightly commented at the National Education Summit on High Schools in February, “America’s high schools are obsolete” — and for many reasons, one being the way students are tested.
I don’t advocate testing just to test. After all, there seems to be little benefit from simply comparing test results to the previous year or measuring achievement based on the number of Advanced Placement tests taken.
With the increased use of outsourced labor, when our competition is more likely to come from Bangalore or Shanghai rather than Raleigh or Austin, we must set goals and compare achievement accordingly.
In December, the Organization for Economic Cooperation and Development released test results that showed America’s 15-year-olds rank 24th out of 29 industrialized countries when it comes to practical math abilities. Rather than only focusing on the disparity of education in America, a national effort needs to be led to ensure competitiveness with future global labor trends.
There may be a bright side to outsourcing, though. While we might lose some jobs to countries that are willing to do them cheaper, with an honest focus on American education, churning of the economy can create jobs in new areas.
This is not a sure bet, though. As Friedman writes, we used to hear our mothers admonish us to eat our dinners because people in China and India were starving. Now, Friedman implores his daughters to “finish your homework — people in China and India are starving for your jobs.”
Aaron Hill is a juniormajoring in firstname.lastname@example.org