Indian Software Firm to Outsource to U.S.
RENEE MONTAGNE, host:
For years, American companies have been seeking a competitive edge by outsourcing some of their operations to India. Now the tables are turning. An Indian software company called Wipro announced it will open a software design center in Atlanta, Georgia. The company expects to hire around 500 computer programmers in the next three years.
NPR's Adam Davidson reports.
ADAM DAVIDSON: The new center is not a sales office. Most big foreign companies have sales and project management offices in the U.S. Wipro itself already has many of them. What makes this new development surprising is that Wipro is opening a software development office - one of those cubicle farms of software coders that many fear are disappearing from the U.S., moving offshore - mostly to India.
Lori Kletzer, who teaches international economics at UC Santa Cruz, says that while this the first time she's heard of an Indian firm doing this, it's not terribly surprising - at least not now.
Professor Lori Kletzer (Economics, University of California, Santa Cruz): Three years ago, I would have been surprised. Seven years ago, I really would have been surprised.
DAVIDSON: Kletzer says this is a sign that the Indian software industry is maturing. It's no longer just trying to be as cheap as possible.
Prof. KLETZER: It is not just about labor costs. It is also about the value of the product being produced.
DAVIDSON: As recently as three years ago and certainly seven years ago, Kletzer says, it was all about cheap labor costs. At first, Indian firms mostly did the dull, routine programming tasks that don't require the most brilliant software engineers. Companies could hire lots of Indian programmers for the price of one American, and that's still true, says Raja Velazuami(ph), head of international HR for Wipro. He says American programmers still make a lot more than their Indian competitors.
Mr. RAJA VELAZUAMI (Director, International Human Resource, Wipro Technologies): That could be a fairly sizable gap. It can be as much as (unintelligible).
DAVIDSON: An American programmer gets 10 times as much as an Indian programmer?
Mr. VELAZUAMI: Yes, it could be.
DAVIDSON: So why in the world would a company based in India hire 500 Americans in Atlanta when they could get 5,000 programmers back home for the same price? Velazuami says senior Wipro staff asked itself one question.
Mr. VELAZUAMI: Are you competing on a cost point of view, or are you competing on another perspective completely?
DAVIDSON: He says Wipro already has programmers all over the world - India, of course, but also Canada, Mexico, Brazil, Eastern Europe. All those countries are cheaper than America, but American programmers know things. They know about American culture, American idioms. There are lots of projects that require programmers with that sort of knowledge. And then some projects, particularly defense-related, require that all programmers be physically in the U.S.
So, Velazuami says, these pricey American programmers are well worth it, since they'll bring in jobs Wipro wouldn't be able to get otherwise. Kletzer says there's another reason to open this U.S. office.
Prof. KLETZER: There are political advantages for these very big companies to have production located in the United States.
DAVIDSON: At a time when many in Congress and around the country are highly critical of U.S. jobs moving overseas, Kletzer says foreign companies like to be able to point out that they also create jobs in the U.S. In fact, the Georgia Department of Economic Development says that roughly 25 percent of jobs in the state are with foreign-based companies.
Adam Davidson, NPR News.
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