the New Economy

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Subject: the New Economy
  I have been reading a Local Business newspaper today. One article is called Tapping in to India´s potential market.

What appears to be happening, is new Canadians are using their knowledge of their home country as either a potential market for Canadian made products, or as a source of labour and products for Canadian consumers.

While this is a great new opportunity for new PR´s, it also presents some downsides (from an immigration/job perspective).

One entrepreneur, Gurmit Dahliwal has spent about $300,000 to establish a software development facility in India because he believes skilled software programmers are more numerous on the subcontinent. He also knows that he can pay them one third what he would have to pay in Canada.

We can cheer for the enterprising PR who has used his home connections to make a great business for himself... but what about all the IT workers coming to Canada looking for work.

I don´t have any answers or profound comments, but it appears that our global economy hurts us and helps us at the same time.

[02-06-2005,18:07]
[***.181.198.246]
sharon
(in reply to: the New Economy)
Yep, global economy.
You ain´t seen nothing yet, big firms outsourcing their bookkeeping to India. Call centres in eastern Europe and India learning their personel to speak and understand not only the language but also the local dialects so when they call Joe Smith in Arkansa he thinks he´s getting the call from 2 blocks away. X-rays or scans , being taken in western hospitals, mailed 10.000 miles aways and send back whitin hours after being diagnosed by Indian doctors at 1/5th of the price a western doctor would charge.
And there are so many more examples to give.
Yep, it´s getting a small world.

[02-06-2005,18:50]
[**.194.183.155]
John
(in reply to: the New Economy)
Given this reality, how does a country predict its economic needs? I am guessing the plumbers, electricians, and carpenters can heave a sigh of relief. You can´t really outsource that kind of work!

I must admit I have been thinking alot about the IT professional that has been working full tilt (and being paid relatively well) in their home country on foreign contracts. Many of them now have the economic and educational ability to leave their home country - only to discover that all the jobs in their field are back at home.

There is a sad irony in all this.

[02-06-2005,19:15]
[***.181.198.246]
sharon
(in reply to: the New Economy)
Frankly I disagree with the thought Sharon.

These are what are know was "Short-run" effects. These were bound to happen after the Globalization effects of late 1980s.

Remember the boom period in the U.S. and Canada? That was when GATT agreements called opening the world markets. The G7 nation leaders were almost holding the world at ransom to open their markets or face sanctions.

The emerging market countries and developing nations saw their home business base erode when the likes and giants of GM, Ford, Pepsi, Coke, etc. walked into the home markets. Of course local competition was no match.

However, these economies adapted themselves to tasks which they were "comparatively advantaged of"; like manufacturing and service sector. The effect of which we are seeing now in the U.S. and Canada because of outsourcing.

What people (I mean the general population) fail to see is that it does not mean end of the world for their own markets. It is a signal to move to making something else, something innovative. Of course plumbers, electricians and bus drivers are not going to do that.

These are cyclical phases - remember what brought wealth to the west in 2000s? It was the invention of automobile, Aircraft Technology, Computers, Software Technology. Now we must innovate something else. Could be in Biotechnology could be Nano Technology - I don´t know...

Lessons from Economics teach us that trade never succeeds if we treat it as a ZERO sum game. i.e. in your example if Mr. Singh invests 300,000 in India it means Canada is at loss of 300,000. No, it means saving the money to get job more efficient to get the saved money to work on something else. In end the wealth of Canada as a nation grows. However, when the nation does not need that software guess who will suffer if he does not adapt to the changing environment?

Lesson derived is doing what each nation is best at. Canada as a nation and Canadians shall have to strive to be at forefront of innovation to generate new wealth. If Canadians as a work force are not efficient at the process of manufacturing software they should let the Indians do it. Why make something for e.g. 100 $ when you can get it for 35 $? This process must go on to keep the advantage.

Hence it is very important to always get the best in their fields as immigrants unless their own home grown are filling the quota. If the policy of the govt. looses that focus, that will be the beginning of the decay of the nation.

Unfortunately by nature of the path developed nations have taken globalization is a irrevocable path. Hence, it is best to innovate, rather than block the process. You know it is impossible to manufacture at the same cost as in say India and China. However if it is something which they can?t manufacture ? of course then you keep your monopoly. Take the example of Microsoft

[02-06-2005,21:16]
[**.244.28.246]
Spike Me
(in reply to: the New Economy)
I understand and agree. I am only thinking about the new PR with IT skills getting off the plane and looking for work. While we are not outsourcing everything, the job market is getting leaner for those skills that can be bought elsewhere for less money.

This issue is near and dear to my heart. My fiance is coming to Canada with a masters in software engineering. Just this past week he helped his boss (with his well practiced english skills) secure a large contract with a US company. Cheap by US standards. 3 years work for 20 staff there.

Will he find comparable work once he is in Canada? I hope someone tells me yes.

[02-06-2005,21:52]
[***.181.198.246]
sharon
(in reply to: the New Economy)
I hope these clowns will slow down in their eagerness to haul every damn job to other places... They might as well hire the new immigrants here at lower salaries than ship the jobs to other places... By the way, it is not the new economy but some-what-screwed-up economy.
[03-06-2005,10:49]
[***.202.54.29]
in canada
(in reply to: the New Economy)
As Spike has pointed out, history is a witness to the fact that economies adapt to changes. It has been happening all this while and will continue into the future. The research in the US has shown outsourcing has not damaged the economy, rather has helped it. Its just people are pissed off because they lost their jobs and somebody has to be blamed for it, so they try to cite some emotional examples. (like I lost my software job to Indians and I´m now a plumber or what...EVER )
At one point of time it was the British (with the obvious help of their colonies) who held the trade dominance on the world. This was bereft of any help from technology. Then there was the industrial revolution, and slowly the paradigm shift was towards the nations that went heavy on technology, slowly the Russians and Americans chipped away into being global superpowers. This is all a cycle. With the total intrusion of Computers et al into our lives, todays technology invariably has to be in the IT sector. Countries like India now hold a key factor because they are well armed with this technology. Even though you might argue that they work for cheap etc, in general, if you compare them to others in the same field, their work is better. I am saying "in general" so don´t cite examples about certain individuals who have had fake degrees and cannot do justice to their jobs etc etc. But the point is that we can sense the changes globally, China for example, with its enormous trade surplus can hurt the USA if it wants to, and it also holds a good base for IT too, the only drawback is that they can´t speak english the way the westeners want them to speak. In these circumstances its always better for the countries in power to embrace immigration to maintain their competitive edge, but this comes at a price, there will be a drop in the standard of living to some extent, but they have to be ready for it. So in the short term if you turn a Nelson´s eye towards immigration, the long term effects will be beyond comprehension.

[03-06-2005,12:18]
[***.242.242.2]
Raj
(in reply to: the New Economy)
Sharon,

As I mentioned your spouse any have to upgrade his skills to match the requirements in Canada. But then one good thing about US and Canada is that companies look out for adaptive power and learning curve rather than whole emphasis on what you actually know before you begin work.

But, being an optimistic - if he has the skills to secure contracts, he sure can get a job. Maybe he can change to the business side of the work? Name of the game is adaptability and always being on the forefront of learning curve.

Raj,

I agree with your comments. China is more of a potential threat than India. If the whole software and Call Center business is taken away India is nothing compared to China in trade. India will have to use it real advantage at work, its workforce for that India has to completely change it´s labor laws so India can walk the mass production path like China and then really grab the big chunk of Business.

As for Canada and US they will have to keep striving at developing better technologies which emerging markets like China and India shall always need. That is how trade works!!

[03-06-2005,14:35]
[***.113.160.29]
Spike Me
(in reply to: the New Economy)
thanks guys... this has been really interesting. a wonderful change from ´how long do I have to wait´

Raj, you are right. My guy will likely get out of the programming end of the industry (even though he is good at it) and move to the business side, or do something totally different. That does not discourage him. It is just a lot of education to put to the side.

[03-06-2005,16:24]
[***.181.198.246]
sharon
(in reply to: the New Economy)
Just to point,

You are forgetting that IT is not only Software engineering and solutions development..
The Software industry is known to be already outsourced everywhere by indian and pakistanis, it is not only a canadian phenomen.. but what about systems and database administration? systems engineering and integration? network engineering? IS Management.. i know all these are like plumber work.. can´t outsource them.. and this is more than half of the IT industry.. so if all immigrants from the Indian continent are Software developers and programmers.. and can´t find jobs in Canada, this does not mean all the other IT fields are encountering the same!
or are they? correct me if I am wrong..


[04-06-2005,09:37]
[**.217.224.34]
Michka
(in reply to: the New Economy)
About china.. I don´t see them as a potential risk.. they need at least 1 generation to be able to communicate well in an understandable language, I am not arrogant but I am speaking from real facts I encountered with several chinese leading companies in my international expertise.. one of them was Hwawei..
[04-06-2005,09:40]
[**.217.224.34]
Michka