Power Fails Again in India
Recently, we learned that nearly 3/4ths of India’s citizens suffer from malnutrition.
Now, we find out the electrical grid can’t support demand, nor do they have sufficient coal to generate power when it’s operating.
This must be terrible news for the thousands of U.S. firms which have outsourced their IT and customer service to India, resulting in higher unemployment here:
In India, wages increased 13% in the past year, Lippman says. China has also had double-digit inflation. “If that continues, over the next few years, the cost savings will evaporate.”
There is some indication the lemmings are turning:
[T]he chief information officer of General Motors told Information Week magazine of his radical plans to cut external IT projects. Arguing that the US carmaker’s reliance on contractors led to sluggish decision-making, he will reduce the proportion of such work done outside the company from 90 per cent to only 10 per cent.
I saw it in 1994, 2000 and 2008. Businesses look to each other when making strategic shifts. They decided inexpensive Chinese imports doomed manufacturing after NAFTA and shut down. They did it again in response to the most recent recessions. And now, over $8T in private equity is sitting on the side in cash, waiting to see what happens next.
Outsourcing appears to be out of favor with conventional wisdom. Of course, that’s tough news for companies like the local insurance company which dropped $500K on an India-based SaaS solution.