India's Dwindling IT Labor Advantage

Optimize Magazine > Corporate Culture > India's Dwindling IT Labor Advantage > September 2004: "Turn on the television news and you may find yourself concluding that virtually the entire U.S. IT industry may one day be located in India. There's no doubt that in recent years global IT-sourcing activities have increased dramatically. A recent survey finds that 90% of U.S. companies send IT work offshore to India, as compared with the second most popular locale, Canada, to which only 10% of U.S. companies send IT work. Ironically, this very success is straining India's ability to deliver on the value equation. Despite the country's enormous population, our analysis indicates that India has a limited pool of qualified IT professionals, leading to an acute demand�supply imbalance by 2007. We've estimated the impact of this imbalance on wages, staff attrition, and overall quality, and therefore, on the industry's cost structure. The modeling suggests that India's cost advantage might be cut in half, and possibly more, by 2007."