India Offshore Outsourcing Proves Effective

Over the past decade, Offshore Outsourcing to India has dramatically increased due to a number of economic and cultural factors. Lets examine why doing business in India is good business for U.S. headquartered companies.

It is widely known that India is the second fastest growing major economy in the world with a GDP (Gross Domestic Product) growth rate of 9.2% at the end of the second quarter of 20062007 (source: Wikipedia). Additionally, India has a stable, peaceful government that has a history of over 60 years of democracy; this stable environment provides a low risk outsourcing opportunity when compared to other foreign markets.

Indians understands service; the service sector accounts for over 50 per cent of India's GDP. The culture is polite, responsive, and courteous. This makes for a congenial relationship with partners and their customers. The Indian culture is a quality driven culture and naturally understands doing things right the first time.

India is a talent-rich country which prides itself in higher education with over 18,000 colleges and universities. Ironically, 17 percent of Indian college graduates are unemployed, which is higher than middle or high school graduates. College grads need work. By 2010, it is estimated that India will have the highest number of English speakers in the world (source: Tracking India).

The time differences between India and U.S. may seem challenging at first glance, yet the time differences have actually proven to be very favorable. India works while the U.S. sleeps. The 12 hour average time difference between India and the U.S. provides for 24/7 around the clock service.

India labor costs are a fraction of the U.S. labor rates. Typical salaries for technical staff range from $6,000 to $15,000 annually, while the U.S. equivalent worker commands a six figure annual income. This economic advantage has made the India offshore outsourcing decision a practical one. In fact, over 80 percent of U.S. companies surveyed have ranked India as their first choice for offshore outsourcing. Over half of U.S. based Fortune 500 companies employ Indian outsource talent.

Dr. Joe Greco is Director for the Center for the Study of Emerging Markets (CSEM) located in Fullerton, California. As part of the College of Business and Economics at California State University, Fullerton, CSEM was established to promote the flow of global information and technology between the academic and business communities. In particular, CSEM studies offshore outsourcing and it economic and cultural impact on US based emerging markets. You may contact Dr. Joe Greco at 714-278-4125 or csem@fullerton.edu or csem@fullerton.edu or at http://www.thecsem.org

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