Financial Daily from THE HINDU group of publications
Thursday, Jan 08, 2004
Industry & Economy - Events
Outsourcing allows cos to be competitive:
Mr Dhruv M. Sawhney, Chairman and Managing Director, Triveni Engineering and Industries Ltd, greets Mr Mike O' Brien, Minister of State for Foreign and Commonwealth, UK, at the Partnership Summit 2004 in Hyderabad on Wednesday. Mr B. Ramalinga Raju, Chairman, Satyam Computers, and Mr R.M. Abhyankar, Secretary (ANA), Ministry of External Affairs, look on. The three-day summit will feature a number of speakers from India and overseas to discuss `India and the World: Engagement and Partnership.' A. Roy Chowdhury
Hyderabad , Jan. 7
WITH barriers both in trade and services sector, everybody loses. Outsourcing of jobs abroad, whether manufacturing, production or service activities such as call centres, allows companies to be competitive and ensures developed economies to generate new and sustainable jobs, according to the British Minister of State for International Trade and Investment, Mr Mike O'Brien.
Speaking at the Partnership Summit, Mr O `Brien said the British Government's view on offshoring is clear. It is a fact of economic life. Companies have the freedom to decide where to locate their operations. The British Government shares concerns of those immediately affected by plans to offshore service work. We take the local employment effects very seriously, but we need to maintain a sense of perspective.
"The British Government holds the view that you cannot protect free and fair world trade and practice protectionism at home. Instead, we shall work to enable and encourage firms in the UK to invest in new technologies, workforce skills and to move into advanced high value activities. We will protect our people without lapsing into protectionism," he said.
"Newspapers talk about the jobs lost. But say nothing about the number of jobs gained by companies choosing to locate in the UK. Britain as a whole benefits from globalisation and free trade. We read about office jobs being relocated to India by British banks and insurers, but not that one million people are employed in the UK financial services sector and that in 2002 alone another 5,000 jobs in the sector were created by inward investors. We read about some call centres being moved abroad, but we still have 5,500 call centres employing around 400,000 workers," he said.
"In Britain call centre industry is growing. Many call centres will remain in Britain because we have a quality workforce, a strong infrastructure, support for industry in Europe and central and local government. Everybody gains. If Indian business people want to invest in call centres in the UK you would be most welcome," he said.
The Chairman of Satyam Computer, Mr B. Ramalinga Raju, said: "With the death of distance and services playing a bigger role as each year passes by, we expect a larger chunk of service gradually getting outsourced. It is estimated that 80 per cent of the global economy will be through services and of this a significant part could be handled through virtual delivery. This will mean greater outsourcing."
Mr Dhruv M. Sawney, past president CII and CMD Triveni Engineering, said the only way to address some of these challenges posed with regard to outsourcing is by better networking. This will remove some of the apprehensions people have about job losses.
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