Looking for a Job in the Global Economy?
November 30th, 2007
Submitted By: Nicholas Miura
I’ve had quite a few recent discussions with friends about what makes Americans different than foreigners as the world becomes flat. One of the reoccurring themes that keeps coming up is that an American education helps create a well-rounded person who excels at innovation and problem solving, where others, Chinese and Indian especially, are too narrow in focus. Entrepreneurship and outsourcing were western traits, which is why America will come out on top in the end.
Here’s an article from the India Economic Times.
It seems that India has decided to be entrepreneurial and outsource – to the United States. All those call center jobs that Americans decided they didn’t want, or didn’t need are somehow coming back.
This raises an interesting question. Where are the American companies? Why hasn’t some bright young MBA student recognized that there was a business opportunity right in their own backyard? Instead, we got beat to the punch by Indian companies who are competing very well on the global stage.
Building on Robyn Bowie’s post ‘Need Help in School?’ - what is the future of American jobs? She wonders where the line will be drawn on what jobs can and will be outsourced. Is this the right question to ask, or should we begin to wonder when Chinese and Indian jobs will be outsourced to the United States? In our lifetime, will we see a time when foreigners come to the U.S. for medical tourism or Indian families are looking online for Harvard educated tutors for their sons and daughters?
Creativity and innovation is clearly not a United States commodity and just maybe we all should be a little more aware of where we fit into the global economy. Or, just assume everything will work out nicely - I’ve read that there’s a call center in Ohio who’s hiring.
Entry Filed under: Pre-Departure, China, India, Pre-Departure
17 Comments Add your own
1. Simone Michel | November 30th, 2007 at 2:44 pm
Here’s an article that was published toady on CRM News:
“Will Customer Complaints Bring Call Centers Back to the US?“
According to the article, companies are starting to bring their call centers back to the US based on customer complaints. The number one reason is language barriers. Even though Indian call center employees are trained in American accent and slang, it seems that many American customers got frustrated when both parties started to talk past one and another. A report released by CFI Group in Michigan showed that customers who believed they were dealing with a call center outside the United States rated their overall satisfaction 26 points lower than those who believed the center was U.S.-based. As we all learned in the OB class, this bad result is also based on stereotyping and therefore biased. But I have to admit, I have also experienced bad and unfriendly service from an overseas based Dell call center before. By the way, they have also decided to stop routing tech support calls for some of its products to India after complaints from customers.
AT&T is also brining call centers back onshore and Apple has just recently cancelled plans for a center in Bangalore. AT&T cites costs as the primary reason. An agreement with their union made having the call center employees on its staff feasible.
I can think of other reasons why call centers are coming back, for example problems with an international workforce (we have discussed this problem with Rami Shani). Additionally, yes Indians have great techs, but do they work in a call center? I doubt. Call center agents go through simple training and wade through their catalogue of questions when they receive a call. There are probably only a few knowledgeable people that know what they’re talking about.
So what will companies do in the future? Play the cost saving card, or the customer satisfaction card?
2. Chris Carr | November 30th, 2007 at 2:55 pm
Nick,
Good article.
Nicely highlights how changes in the population create new markets and business opportunities. A major reason some of this work is shifting back to the US is because such jobs are a potential boon for people who care for children or elderly family members at home.
See, e.g., WSJ, Call Centers Tap People Who Want To Work At Home.
Victory in business often goes to those who spot such opportunities and can execute in filling that need.
3. Jesse Dundon | November 30th, 2007 at 11:17 pm
Are these Indian companies really “outsourcing” to the US, or are they just investing in or creating companies that have a significant presence in America? I may be wrong, but I thought that outsourcing was having a part of the process completed outside the walls of a company. The company still sells the product or service in their own markets, but just gets the work done cheaper by taking advantage of specific comparative advantages of another business or nation.
It seems like the article is pointing out that smart Indian companies are expanding their operations into the US. They use Americans to serve other Americans for sensible reasons such as geographical proximity to the building (you wouldn’t hire an Indian to fly over and work in a hotel in the US, even if an Indian company owns the hotel). It is not so much outsourcing, but just an company hiring the citizens of the country in which it does business, despite the fact that the corporate office is located abroad.
Still though, it does bring up the concern of having foreign nations own so much of what was once American owned companies. What happens when America does not even own its own businesses?
I am currently reading Confessions of an Economic Hitman, which essentially asserts that American companies are directly responsible for creating a global empire (corporatocracy). Think about what would happen if this corporatocracy that is the US is “acquired” by India, China, or any other company?
4. Alex Thornton | December 12th, 2009 at 11:34 pm
It seems to me that companies should focus on making a superior product or service rather than on improved call centers.
I personally avoid products that are faulty and require me to call customer service. On the rare occasion that I have had to call in, I have received good service. I call in so rarely that I cannot remember the last time it occurred. If I do have ongoing problems with a product or service, I simply switch brands.
Then again, I might not be the typical customer. I am probably quicker than others to give up on a product and deem its cost “sunk.” Time spent dealing with customer service is, of course, money.
5. Phil Hamer | January 23rd, 2010 at 1:29 pm
To me this article seemed to have some kind of Planet of the Apes fear in it. I don’t think we got “beat to the punch.”
Does the fact that there are call centers in the states mean that foreign countries are outsourcing here? No, it means that those companies are successfully operating within the states and in order for them to provide customer service that will actually help customers they need American help for American customers. What good would it do if you called a Sony helpline and talked to a Japanese operator who knew little of your language and culture?
6. Erika Bylund | January 26th, 2010 at 12:30 am
The time of the outsourced American tutor is already here! I just got off the phone with my friend Shana who is currently preparing her papers and credentials to leave a high-paying I-banking job here in the states for a position tutoring Chinese students who hope to attain a coveted spot at some of the top American universities. When I asked her why she would leave such a cushy job, she replied that she, “needed to get out of the office for a while.”
Shana plans to stay in China, working as a tutor, for about two years. A native-born Chinese, Shana is fluent in both Cantonese and Mandarin and will devote the majority of her time to tutoring high school students who come from predominantly wealthy families. She stated that the “market” of Chinese parents eager to get their children into American universities is growing since many of these parents place a high priority on obtaining the best education. In China, much prestige also rests on getting your child into an American university, which will poise him or her to get a top-paying job and prominent position upon graduation.
Shana will be working for a private tutoring company started by a Chinese-American Harvard MBA graduate. The number of such private tutoring companies is growing with demand.
Regarding the “outsourcing” of the entrepreneurial spirit, I believe that pretty much anything can be learned. However, where Americans have the advantage is that fact that entrepreneurism is a core part of our culture. Our legends are not based on great warriors or kings or even presidents, for that matter. Our legends are based on stories of rags-to-riches, everyday Joes, that started with nothing and made fortunes. Our great buildings are testaments to some of the most prominent entrepreneurs (Getty Museum, Carnegie Hall, and Hearst Castle to name a few), not great kings and warlords. Americans love stories about boot-strappers. This is our history, and it is partly the product of a nation that fashioned itself in just such a way. That is one of the main reasons why the Chinese, Indians, and others want to send their students to the U.S. to study and have their children tutored by Americans. There are some lessons that only a product of the culture can bestow.
7. Jason Silver | February 14th, 2010 at 1:24 pm
Fareed Zakaria wrote “The Post American World”, a book that many of us 2010 MBA’s could have read last quarter. In his book, Zakaria points out that America can no longer be seen as the sole economic and political force in the world. China, India, and the other BRIC’s are experiencing tremendous growth and are catching up to the U.S. As this happens, the shift of American jobs overseas, will become foreign jobs coming to the states.
With the U.S. just getting over its post economic depression hangover, American’s are looking for ways to work and earn more money. If this means that they take jobs from foreign companies looking to cash in on the desperation of the American workforce, then so be it.
The U.S. has been able to use foreign workers to benefit its bottom line for years, its only fair that foreign countries and companies use us to increase their own bottom line.
8. William Ary | February 21st, 2010 at 6:20 pm
It is clear to me that there is no one place that does anything better than another. I agree with Thomas Friedman’s thesis that in the future economy, people will be selected for jobs because they are the best fit out of anyone in the world. Since employers can find good people anywhere, only the very best or those with very specific skill sets that are in demand will be hired. If those skills are available from workers in the USA, China or India, work will simply go to the worker willing to work for the least compensation. It is a testament to the power of the current recession that the place people will work for the least is the USA. I guess it was about time.
9. John Barry | February 21st, 2010 at 8:20 pm
Outsourcing to the United States should not strike fear in anyone’s heart as it does not mean that the U.S. is losing some “war for dominance” with other parts of the world. With the American dollar cheaper than it has been in quite sometime, and our workforce desperate for work, it is only prudent to seek help from American workers. We are no longer finding our economy strong enough to support even the most highly educated of us, so the days when the average American psyche considered jobs in call centers “beneath” us may in fact be coming to an end.
Specially now that the world has in fact flattened with the introduction of the internet, our all encompassing educations may in fact hurt the average American. The narrow and focused technical educations received abroad seem in my opinion to be more highly sought after than ever in this new online world we live in. Furthermore, when one takes a look at the average developers creating software, and earning large paychecks for their work, it is typically people whose first language is not english.
10. Frederick Peemoeller | March 12th, 2010 at 3:58 pm
I agree with Alex on this. Mustering up the nerve and calming myself down to actually call someone is something I have a hard time doing. When I hear of people that use a product in which they had to call a center to figure out what is going on, I quickly make a mental note and make sure I never purchase it. The fact that call centers are being improved doesn’t make me think to buy a product that is notorious for issues that a customer cannot solve by him or herself. Its about quality!
11. Jordan Wente | March 12th, 2010 at 4:08 pm
Its crazy to think about the affect globalization will have future of our country. What really does make Americans different from foreigners? I agree with Erica the one thing we do have going for us is our history of entrepreneurship and taking nothing and turning it into something great. I think culture plays a big role in entrepreneurship. Indian’s may be learning these traits but will it really be useful outside of India? One of the reasons entrepreneurs are successful is because they recognize an opportunity based on a problem or need that hasn’t been met. But is there a cultural factor in all of this? I think so. In order to recognize the need you have to understand the problem and the culture. Indian’s will surely excel at entrepreneurial ventures within India because of their ability to understand the culture and recognize an opportunity. I just have to question how successful they will be at recognizing an opportunity in a different culture. The ability for Americans to continue to recognize opportunities in their own culture is why I think that American entrepreneurial spirit will sustain itself in the future. However, it will be interesting to see what the future of other American jobs will be.
On a different note, I think the line on what jobs can and cannot be outsourced has already been drawn. The line depends on whether or not it will be profitable for the company to outsource. This includes customer service arguments. If customer service complaints affect profitability then the decision to outsource is clearly not the right one.
12. Jeff | March 18th, 2010 at 4:26 pm
I wrote earlier in a blog I submitted on “Who’s Outsourcing to Who” where I detail several examples where India companies were outsourcing to the U.S. In one case, the programming of GUI’s and the more technically difficult modules of the software were coming to the U.S. because the Indian programmers “were better at rote programming” and if more creativity was needed, it could be done faster and more efficiently by the U.S. programmers.
There’s no doubt that the U.S. needs to have a better way of getting innovation out of the classrooms and into products. We don’t currently have a good system to do this. I am given hope that we will improve in this aspect because this quarter I’ve been taking Dr. York’s Entrepreneurship course, and he’s been discussing how to translate ideas into reality. I’ve also been to several well attended seminars that address the issue. With this kind of attention, I think we as a nation are starting to get the idea.
13. Vitus Holzner | March 18th, 2010 at 9:45 pm
I am 100% with Alex and Will on that one. I think America won’t be able to compete against emerging countries like china and India on the lower end of the wage scale.
In my home country Germany we face very similar challenges. We are a nation of very high social standards, making labour an extremely expensive production factor.
No German company can compete on the low cost segment of the market. They need to differentiate themselves by delivering high quality products and engineering excellence. Germany registers more patents per capita than any other nation in the world.
Well and I believe that’s where the money is. We should stop whining about call center jobs that are shipped to Bangalore and focus on how we can grow and retain a highly educated, resourceful workforce that invents complex, high-value goods.
Resources:
http://www.whu.edu/cms/fileadmin/redaktion/LS-UnEx/Knowledge_Wharton.pdf
14. Matthew Perez | March 19th, 2010 at 12:13 am
If I learned anything from economics, it is that companies are profit-maximizing entities. They will do whatever makes the most sense in terms of meeting their bottom lines. As such, as long as there is a sufficient demand for call centers in the United States, they will exist. However, if a consumer continues to buy a product from a company despite the fact their call center is in another country, than there was not enough demand for a local call center. The point I am trying to make is that if a person is concerned about having a job in this global economy, pick one that there is a market for. If you want to work in a stable job in a particular area, find one that fits the area. Operating a Bugatti dealership in San Luis Obispo would probably not be one of them. In all, you must weigh the opportunity costs of your decision.
15. Leslie Mann | March 19th, 2010 at 1:08 am
No whining, I promise, but I must play the role of devil’s advocate regarding call centers and the almost tangible hatred of them. Having worked in a call center for a number of years (not Dell or AT&T, thank you…) I can safely say they are not necessarily the evil we all portray them to be. Call centers are supposed to be a service, not a frustration and while I do agree that high quality products and services should be expected, providing a customer support center or phone number to call is still the right move for most companies. It is the way the call centers are set-up, the way the callers are trained and the infused evil stereotype of call centers themselves that are the problem. If a customer has a question, it may not be to the fault of the product and that customer has a right to get their questions answered. Whether it is answered by an American or Indian, that all depends on the company and the amount of complaints it gets I guess. I don’t know about anyone else, but when I needed to report fraudulent activity on a recent credit card of mine, I really didn’t care who was on the other end of the phone call or where they were in the world, so long as they provided the service I needed.
16. Chase Janvrin | March 19th, 2010 at 10:00 am
I think we’ve been taking the readings a little too seriously. While reading the Post American World, and The Elephant and The Dragon, it’s easy to be a little fearful of the state of the States. But while this blog addresses a unique, and I think humorous, fact that call centers are coming back to the States, all of a sudden we’re finding a way to be upset that jobs are returning home. Isn’t that what we want? Who cares if they’re entry level jobs, people need them. Perhaps I am naive, but I actually do think everything will work out well. I have faith in America and Americans, and while there is no arguing that India and China are both taking bigger pieces of the pie, I think there’s enough pie to go around. And even if someday the pie pan is licked clean, leave it to America to cook up another one.
17. Chris Phippen | March 19th, 2010 at 2:24 pm
Nicholas brought up an interesting point with this article about India outsourcing to the United States; it being ironic that we are trying to move our call centers overseas while they are just sending them right back. I agree with Leslie in the respect that call centers are indeed something that need to exist, no matter where they are. It really is a great idea because it does create many jobs in an economy that has been hurting recently for work. They may seem like low-priority jobs, but someone has got to do them. And the fact that India wants to use the US instead of China or another top country is great because it shows they think highly of the way we work and how we do business. It shows that they can trust us with their services.
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