By Dean Whittaker

After the seventeen-hour plane ride over fifteen time zones, life at 40,000 feet finally landed me in the hustle and bustle of Mumbai (formerly Bombay) Airport.  The 1:00 AM arrival followed by the hotel chauffeur rescue at the airport left me exhausted, jet-lagged, and ill. It’s not a trip I would undertake very often.  My first impression of India was of people, poverty and pollution.

The people are wonderful and bright, and some are very well educated. The people I met were warm and welcoming. The poverty was overwhelming – 60% of Mumbai live in slums the likes of which I had never seen. The professional street beggars brought tears to my eyes. And then there was the pollution. When I first arrived I could not breathe and thought I was going to have to come home early from the CoreNet Conference. The air-conditioning at my five-star hotel helped me survive my visit. The temperature was in the high nineties during the day and the low nineties at night, with ninety-percent humidity.  

Mumbai consists of eighteen-million people living in a place that has six times the density of New York City! They have the least open space per person on the planet. One of their largest challenges is infrastructure. The traffic congestion limits travel by car to the speed of a few miles per hour. Perhaps one of my biggest surprises was to learn that vehicles have the right-of-way over pedestrians. Crossing six lanes of traffic on foot is not for the weak of heart nor the elderly.    

From my trip to India, I’ve come to realize that outsourcing (BPO, business process outsourcing) is real, but that it is responsible for only a very small percentage of the impact on American jobs. A number of major US firms have been acquiring Indian BPO companies since business costs are 40% less in India than here. Software development and R&D are growing rapidly. I don’t see us losing jobs to India yet, but I question whether further expansion of US operations will have a marked effect. I met with Intel, Adobe, and Cisco representatives, all of whom, along with IBM and Microsoft, were building large campuses to house, feed, and entertain their Indian talent.

My sense is that we will have regional economic winners and loser in the globalization of the economy. Those regions that can participate (and compete) will be winners. Those regions that are less agile will suffer. The speed of change and the ability to adapt to these changes will be critical. Preparing our communities and regions for change is essential.

The call center I visited teaches employees to speak American dialects, and some call centers use US weather maps to help callers empathize with the customers they support. The average wage was $200 per month for the bright, twenty-something youths who worked at the center. 

To me, globalization is currently about three issues: outsourcing, off-shoring, and automation. The latter is having a dramatic impact on manufacturing.  Here in West Michigan, we have experienced a 20% drop in manufacturing employment and a 60 % increase in productivity in the last three years. The rich get richer.  While the media and our politicians have the outsourcing issue WAY out of proportion, the global search and competition for talent is on.  Do we move the work to the talent or the talent to the work? Technology enables the separation of where work is performed to where it is consumed. India has the benefit of having been an English-speaking British colony, the recipient of low cost long-distance communication (because of over-capacity in world telecommunication capability), and a culture with a youthful, growing population (60% are under 25) that values education.

One of the most interesting comments made by Dr. Linda Lin of the University of Michigan, the keynote presenter at the CoreNet Conference in Mumbai, was that 51 of the top 100 economies in terms of output are not countries, but rather multi-national companies. What happens to small businesses when the multi-nationals can lower their costs by 40% by setting up shop in India?

Welcome to the global economy.