Death of a Newborn Panic

The Indian Outsourcing Panic of the 2000's, like the "Japan, Inc." peril of the 1980's, may already be running out of gas because Indians are getting too rich. In the digital revolution, it seems that even American stereotypes of who is going to steal our "jebs!" is subject to Moore's Law, according to a new article put online by Forbes: "The Coming Death of Indian Outsourcing."

Manufacturing concerns in Michigan are targeted for a particularly ironic comparison...

All 150 TruAdvantage employees in India were laid off. That's been a familiar tale in Detroit--but no so far in India. But that's changing.

Changing how?

As the 1:3 cost structure becomes 1:1.5, it will soon become inefficient to use Indian labor. Why not Oklahoma or British Columbia? For many Europeans, Eastern Europe has already become more compelling than India. The pure labor arbitrage equation will no longer balance.

ADP, the largest U.S. payroll services provider, has 45,000 employees worldwide, of which only 2,500 are in India. It has around 1,000 workers in El Paso, Texas, it's expanding a location in Augusta, Ga., and it's opening a facility in Jackson, Miss. It's also growing a location in Halifax, Canada. ADP isn't moving its workforce to India--it's hedging its bets geographically. On a recent earnings call, ADP's chief executive used terms such as "smartshoring," and "nearshoring" to describe the strategy.

I have an idea. Perhaps American doomsayers should begin outsourcing anxiety production to Indian workers -- if they can afford it.