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News

November 19 2008

Kuruvilla presents to IGAC: Outsourcing to India

Service Sector Outsourcing to India

Patricia Moscoso, ILR BS '11, comments on outsourcing's possible influence on ILR student career choices

Patricia MoscosoIt hit me earlier this month that in my three semesters at Cornell, I had only taken one class about the rest of the world. Though I do love "Government 3553: Issues Behind the News," it constitutes a very small percentage of my cumulative coursework. Instead, I have spent most of my life, at home and at Cornell, caught up in the purely domestic issues that dominated dinnertime conversations and the evening news in my Washington, DC-area hometown. The party politics and daily machinations in Congress have always shaped my conception of what the government does, and I always grew up a little skeptical of the accuracy of the international news relegated to page A17 of the Washington Post.

Accordingly, I jumped on a chance to hear the ILR Global Affairs Club feature Professor Sarosh Kuruvilla delivering a talk on service sector outsourcing to India. Knowing very little about India, I knew his talk would be interesting, more credible than anything I could hear on the news or on the campaign trail, and immediately relevant to my career choices. Drawn by curiosity and the promise of samosas, it seemed like a natural choice to attend. 

His presentation and our discussion completely delivered on all counts. Professor Kuruvilla described the important context for American outsourcing, starting with widespread job loss in manufacturing in the 1970s. I was surprised to learn that IBM had begun to export information technology jobs around the same time: I always associated it with the dot-com bubble of the 1990s.

Professor Kuruvilla introduced us to the realities of business process outsourcing (BPO,) the widespread practice of sending portions of any firm’s total operations overseas, from technical support to billing to radiology. With rapidly advancing technology and the prospect of telepresence, any kind of technology that allows users to feel or give the appearance that they are present, the economic reasons to keep more expensive jobs in the United States slowly diminish.

I was most struck by the extent to which outsourcing to India had progressed and the immediate implications for families not unlike my own. Most of the jobs that we consider "safe" in America are no longer guarantees, especially since there are now more English speakers in India than there are in America. Professor Kuruvilla’s list of jobs that were easily exportable was staggering, including most of the white-collar jobs with good benefits that most middle-class parents could once comfortably advise their children to pursue. In many cases, those jobs are easily outsourced with new lightning-fast communications and India's booming technological infrastructure.

Professor Kuruvilla recounted a conversation with his friend about what careers would be wise for his son to pursue.  Mainly concerned with finding a job that had a reasonable chance of staying in America, the father was seeking a job that required a bachelor's degree or less. Professor Kuruvilla told him that the safest jobs were ones that required a physical presence at the workplace. His list was about one-tenth the size of careers that could be sent to India without any significant hassle, limited to nursing, hairdressing, and precious few others.

Countless high-paying jobs are also at stake, including many of the jobs that his Ivy League students are considering. Professor Kuruvilla explained that legal research, the destiny of many ILR undergraduates, often only requires Lexis/Nexis and many law firms in India offer trained (In US law)  paralegals at 1/5th the cost. Many high-paying jobs in financial services are heavily computer-based and do not necessitate a physical presence in the United States.
It seems to be just a matter of time before middle-class parents, like mine, will have to tell their Ivy League-educated children exactly what Professor Kuruvilla's friend will tell his son. Attending a school like Cornell is a financial hardship for us, but the choice was made knowing that the investment would pay off in the end, even if not in an obvious monetary sense.

My parents and I talk about my career all the time, but we have never considered that many of my desired careers may not be in the United States by the time I graduate from ILR in 2011. My mother hasn't said yet, "but make sure you get a job that's going to stay in America." Though hopefully heading toward the federal government, I left the lecture with a haunting sense that no job is safe without serious educational reform to strengthen our human capital in the United States.

Professor Kuruvilla concluded his presentation on an optimistic note that political action will naturally come from realities that have been brought to the doorsteps of middle-class Americans with some semblance of political clout. Unions lacked the political power to prevent manufacturing jobs from going overseas, but a vociferous protest from the middle-class could prompt some action for Congress. I am convinced that the best action would be reforms in American public education, steering American students to the highest levels of educational attainment and professional success. We believe strongly in our American ingenuity, and only educational reforms will help us make it real.

In the mean time, the United States should be able to cooperate with Indian business to prevent some of the bleeding of American jobs. I believe in India as another democratic superpower with interests not entirely different from our own. Subsidies for American corporations who keep jobs in the U.S. are a temporary, but potentially successful solution.