Thursday, October 28, 2004

India Uses Canada as Back-Door to US

Metro reports Indian companies are opening back doors into the United States by setting up shop in Canada.

The idea is to offer alternatives to U.S.-based Fortune 500 companies that are eager to get some benefit from the cost savings of outsourcing. By moving work to a "near-shore" destination such as Canada, U.S. companies can mitigate the domestic backlash that may come with the "off-shoring" of jobs.

He said people shouldn’t be surprised that Canada is an ideal near-shore destination for U.S. computer services jobs. It happened in the automotive sector in the 1960s, with the film and television industry and with call centres.

Raju compared the outsourcing trend to the advent of disruptive technologies such as the computer or cellphones. They are innovations that can’t be ignored, he said, because they represent such a dramatic change in how companies do business and remain competitive.

"The benefits of global outsourcing are not incremental," he said. "If they’re incremental, they can be ignored."

Ignoring these changes is what got many U.S. companies in trouble, which is why Satyam is planting seeds in China, a market expected to be the next global outsourcing opportunity after India has run its course.

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