Small US firms to up offshoring to India

[OhioChick]

Source: Economic Times India

14 Apr 2008, 0111 hrs IST

BANGALORE: A recession in the US may now be real and official. But irrespective of the downturn, Indian tech enterprises have some reason to smile. A new breed of outsourcers are emerging in the US, who could help Indian providers to offset some of the impact of the recession on their businesses.

These are the thousands of small and medium enterprises that are increasingly waking up to cash in on the outsourcing wave, a market opportunity explored by their big daddies for a couple of decades now.

"SMEs in the US are under severe pressure to increase profitability and business margins. This will force them to outsource and even have M&A arrangements with Indian firms. India is going to be a great beneficiary of this trend. This will substantially offset or minimise the impact of the US recession on Indian industry," said Adam Larkey, partner at Wolet Capital Corporation, a New York-based investment banking firm.

By March 2008, India had received SME outsourcing deals worth $7 billion from the US as against $6.2 billion in the previous year. This is expected to be $8 billion by March 2009 and $11 billion by March 2010. The total outsourcing from the US by that time would be $54 billion.


Read more: http://timesofindia.indiatimes.com/Business/India_Business/Small_US_firms_to_up_offshoring_to_India/articleshow/2949618.cms

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Snip~ "The total outsourcing from the US by that time would be $54 billion."

Us Corporations (big and small) taking away US jobs....one by one. :mad:

[sasquatch]

1. Yeah guys that will definately help the economy

Nice job assholes.

[Deja Q]

2. Their hubris will ultimately be misplaced.

Other reports say Indians are too costly and corporations are eying other countries, such as Russia.

[babylonsister]

3. K&R. Do they know what they're doing? Ugh. nt

[OhioChick]

5. They don't care....

it's all about the bottom line. Too bad in the process they won't have US citizens to buy their products/services.....they'll be too damn poor.

[JDPriestly]

4. And if American small businesses outsource their work to India,

who will hire their American customers? If their America customers don't have jobs or barely earn enough to pay rent and eat, who will buy the services and products of the American small businesses?

Somethin's gotta give here. In the end, no one profits. No one gains. This is false economy.

[amandabeech]

6. I have read that managing plants in Mexico and overseas can be a real problem for smaller businesses

The cost savings tend to be less than advertised, and the whole production is a real hassle.

On another forum, one poster stated that smaller manufacturers in his area were quietly moving production back home from Mexico because turnover was greater than expected, management in another culture was more difficult than expected, overall security was a problem, and Yanquis weren't exactly welcome. The plants were moving quietly, though, because institutional shareholders demanded the move to an allegedly low-cost part of the world and were unlikely to view favorably any move back here, whether it made real sense or not.

You have to wonder how well the Indian excursion will go, especially now that the rupee has moved higher against the dollar,

[OhioChick]

7. China is standing by...

China marches into outsourcing

http://www.latimes.com/business/printedition/la-fi-outsourcing8apr08,0,6718464.story

[amandabeech]

8. China will pose the same problems as India or Mexico.

Small operations will find it hard to find extra time to manage over several time zones, a very different culture, serious security concerns (aka lawsuits), and in China's case with records, perhaps a lack of reasonably proficient English speakers (as you know, many in India know English well, but have an accent that is difficult for some Americans, myself included, to understand).

The cost of doing business in China is increasing, China is getting a bad rep (deservedly in many cases), and believe it or not, the Chinese are letting the Yuan or Renminbi currency rise slowly but steadily against the dollar.

Believe me, I don't want any of my records going there for security, and I don't want any jobs going there at all (Edwards supporter here). But I think that China's cache is waning somewhat, which is good for us.

[Mountainman]

9. Just what do they think will bring back consumer confidence?

Who's going to spend when they here that their job my go overseas? Who will buy the goods and services of America's small business?