|Broadband and outsourcing
||[Jul. 2nd, 2004|08:50 pm]
Apparently Kerry thinks
Bangalore is "completely wired". Wants universal broadband access in the U.S with India as inspiration. BWAHAHAHAHAHAHA. I wonder how he'd react if he was told that dialup penetration in India is less than 1%
and broadband penetration is something like 0.02%. He probably read something about EVMs and jumped into conclusions. I guess the Bush-Cheney attack ads will be coming soon. I can see it already: "THIS IS KERRY'S VISION FOR THE FUTURE OF AMERICA" followed by stills of Indian slums :-) I'd die laughing watching that.
It's surprising that all the pundits who write about outsourcing fail to mention this. Some proclaim that with time, wages will start equalizing because there won't be enough supply. Others, drawing inspiration from the dot.bust, predict doom for the outsourcing industry in India with eschatological vigor; their thesis is that some other country will be able to undercut India with even lower prices. Well, neither of these things is going to happen. The point is that broadband availabilty is a key parameter that determines the size of the outsourcing market. The growth of internet connectivity will act as a buffer keeping the supply steady; secondly, as broadband becomes cheaper, outsourcing firms will be able to reduce costs, minimizing the chances of being undercut. I'll stick my neck out and say that outsourcing to India will continue to be healthy for the next 10 years. But long before that it'll stop being news.