IBM"s India Gambit Pays Off. Europe Loses Out.
IBM reported second quarter profits up 11% and said it was due in large degree to shifting the cost of what I call "information labor" from Europe to India. This is very significant.
IBM has fired 14,500 people in the past 14 months, mostly in Europe, and replaced most of them with Indians.
Europeans will lament this shift and some may say that cheap labor in India is hurting them. Wrong perspective. To stay competitive in this integrated global marketplace engineers, scientists, designers, architects--all the information worker folks around the globe--have to boost their skill levels and value they offer for what they charge. It's only natural to want the government or professional guilds to step in and establish rules, regulations and minimum compensation laws to stop the shift of jobs to Asia. But however, well-intentioned, it isn't likely to work.
The commoditization of information and knowledge can't be stopped so we all have to keep climbing the "value ladder" by differentiating ourselves and offering more for what we get paid. European information workers are very highly paid on a global basis. They have to offer IBM and other global corporations much, much more than their India and Chinese competitors. They aren't. They can. They must.