Offering services to the world

SUN JOURNAL

India: As technology obliterates distances, this impoverished but highly educated nation is attracting U.S. and European companies.

May 06, 2000|By Dexter Filkins | Dexter Filkins,LOS ANGELES TIMES

BANGALORE, INDIA -- The latest wave reshaping the global economy springs not from Silicon Valley, nor from the canyons of Manhattan, but from offices and warehouses here.

Visit your doctor and there's a chance your file, dictated over the phone, will be typed up in India and shot back overnight into the physician's computer.

Miss the monthly payment on your new refrigerator, and the person who calls to bug you may be sitting in an office in New Delhi, 10,000 miles away.

Request a different flight, and your plane ticket, scanned into a computer, may flash on a screen in Bombay, where a young college grad will punch in the change.

As technology obliterates distance in the global marketplace, this impoverished country seems paradoxically poised to seize the latest opportunity. Full of English-speaking university graduates desperate for work, India is rapidly becoming a magnet for service jobs ranging from the mundane to the cutting-edge. Most of these jobs - from data processing to high-end engineering - are tied to U.S. and European companies, which are setting up offices across India at a rapid rate.

Indian business and government leaders are eagerly clearing the way, in an embrace of Western service companies that marks a departure from the country's historical attitude toward foreign capitalists. After independence in 1947, Indian governments largely shunned Western investors in favor of socialist and protectionist policies more closely resembling the Soviets' old model. As a result, India stood by in the 1970s and '80s as East Asia boomed by transforming itself into a manufacturing platform for the West.

Not missing the boat

India is determined to catch the next wave. Spurred by the success of the country's world-class software industry - a booming $5-billion-a-year business - Indian officials and entrepreneurs are making extraordinary efforts to invite Western companies to bring their office jobs here.

"This industry could be the biggest thing that's ever happened to this country," says Jagdish Moorjani, who employs 150 people out of his parents' old textile mill in Bombay to answer Internet queries for a large American bank. "The cost of manpower is so much cheaper, the quality of service so high, that no U.S. company will be able to stay away."

More often than not, the product being dealt with is information: U.S. companies send it via satellite, and Indian workers key it into files, categorize it, analyze it and ship it back. But Western companies are also increasingly hiring Indians to do skilled jobs such as engineering - and for a fraction of the cost back home.

"I've recommended this job to all my friends," says Dilip James, a 23-year-old graduate of one of India's best universities who earns $60 a week transcribing medical files for doctors in the United States.

"Every day I learn something new."

San Francisco-based Bechtel Group employs 400 engineers in a state-of-the-art office outside New Delhi that handles projects from all over the world. Ford employs accountants to work for its Asian outlets. Pfizer, the pharmaceutical giant, is in India conducting trials for drugs to treat cancer, infectious diseases and mental illness.

British Airways beams a scanned copy of every one of the 35 million tickets it sells each year to India, where workers reconcile the tickets with billing information sent from travel agents. At Decision Support International, workers key in U.S. documents as varied as Yellow Pages and annual reports for American clients. In New Delhi, General Electric employs more than 1,000 people to process loans, perform accounting tasks and call people in the United States who are late on their loan payments.

Many of the U.S. companies already in India, including American Express, which employs 650 accountants and data processors in New Delhi, are planning to expand. GE intends to quadruple the size of its operations in the next two years. Ford is considering enlarging to handle the accounting for its European and American operations as well.

"You'd never know we are 10,000 miles away from the home office," says Nimish Soni, who supervises 120 employees in Bangalore to process insurance claims for Cincinnati's American Annuity Group. "I could take this operation anywhere in the world. It's completely portable."

High growth rate foreseen

In a recent study, consulting firm McKinsey & Co. predicted enormous growth in the globalization of services. About 40,000 Indians are working in the so-called remote-service industry. McKinsey predicted that the industry will grow at a 50 percent annual rate in India and employ as many as 700,000 people here by 2008. McKinsey's consultants identified an array of tasks that Western companies could send here: engineering, accounting, data processing, transcription, customer-service jobs and others.

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