More Jobs Created By Offshoring
Technology investors in India, Russia and other emerging markets must be willing to roll up their sleeves when they open their pocketbooks.
May 28, 2004
Technology investors in India, Russia and other emerging markets must be willing to roll up their sleeves when they open their pocketbooks, participants in a World Bank conference in Washington said Tuesday.
"What companies need at this stage is more than capital. They need hands-on support and management expertise," said Moshen Khalil, director of information and communications technology at the World Bank.
The success of high-tech manufacturing in China and technical services in India has created opportunities across the Third World that will increase as markets develop, investors said.
Countries like Brazil and Russia boast rapidly growing economies and large, educated populations willing to work for low wages, providing an irresistible lure for U.S. companies looking to keep costs down and venture capitalists hoping to find the next Google.
But investors must negotiate a thicket of unstable government policies, underdeveloped financial markets and shaky infrastructure in much of the world, participants at the International Finance Corporation Global Technology Conference said.
"You have to be willing to be intrusive in these places in ways you don't have to in Arizona," said David Bonderman, a founding partner of the investment firm Texas Pacific Group.
While citizens may have ample technical knowledge, marketing expertise is rare in countries governed by communist or authoritarian regimes, experts said.
Delta Capital Management CEO Patricia Cloherty said her company was looking to invest in telecommunications and pharmaceuticals in Russia, despite weak intellectual-property protection and a population that has little management experience.
"The Russian population clearly has resident brainpower. The enablers are not in place for it to be capitalized on," she said.
Khalil said that domestic markets were beginning to develop, ensuring that goods and services do not flow entirely to the United States and other developing economies.
Still, new figures on offshore outsourcing suggest that U.S. companies are sending even more white-collar jobs to low-wage countries such as India, China and Russia than researchers originally estimated.
Roughly 830,000 U.S. service-sector jobs - ranging from telemarketers and accountants to software engineers and chief technology officers - will move abroad by the end of 2005, according to a report released last week by Forrester Research.
The Cambridge, Massachusetts-based firm projected in 2002 that 588,000 jobs would move overseas by the end of next year.
Forrester also increased its long-term job loss prediction, estimating that 3.4 million jobs will leave the United States by 2015. The company originally predicted a long-term job loss of 3.3 million positions - a figure that members of Congress and U.S. labor activists said was cause for great alarm. Researchers said the short-term losses surged as companies began experimenting, but the long-term numbers will probably be moderate.
"What companies need at this stage is more than capital. They need hands-on support and management expertise," said Moshen Khalil, director of information and communications technology at the World Bank.
The success of high-tech manufacturing in China and technical services in India has created opportunities across the Third World that will increase as markets develop, investors said.
Countries like Brazil and Russia boast rapidly growing economies and large, educated populations willing to work for low wages, providing an irresistible lure for U.S. companies looking to keep costs down and venture capitalists hoping to find the next Google.
But investors must negotiate a thicket of unstable government policies, underdeveloped financial markets and shaky infrastructure in much of the world, participants at the International Finance Corporation Global Technology Conference said.
"You have to be willing to be intrusive in these places in ways you don't have to in Arizona," said David Bonderman, a founding partner of the investment firm Texas Pacific Group.
While citizens may have ample technical knowledge, marketing expertise is rare in countries governed by communist or authoritarian regimes, experts said.
Delta Capital Management CEO Patricia Cloherty said her company was looking to invest in telecommunications and pharmaceuticals in Russia, despite weak intellectual-property protection and a population that has little management experience.
"The Russian population clearly has resident brainpower. The enablers are not in place for it to be capitalized on," she said.
Khalil said that domestic markets were beginning to develop, ensuring that goods and services do not flow entirely to the United States and other developing economies.
Still, new figures on offshore outsourcing suggest that U.S. companies are sending even more white-collar jobs to low-wage countries such as India, China and Russia than researchers originally estimated.
Roughly 830,000 U.S. service-sector jobs - ranging from telemarketers and accountants to software engineers and chief technology officers - will move abroad by the end of 2005, according to a report released last week by Forrester Research.
The Cambridge, Massachusetts-based firm projected in 2002 that 588,000 jobs would move overseas by the end of next year.
Forrester also increased its long-term job loss prediction, estimating that 3.4 million jobs will leave the United States by 2015. The company originally predicted a long-term job loss of 3.3 million positions - a figure that members of Congress and U.S. labor activists said was cause for great alarm. Researchers said the short-term losses surged as companies began experimenting, but the long-term numbers will probably be moderate.