The Other Side of Outsourcing

If you have not, do have a look at this documentry I came to know of through this churumuri post. The documentry was made by New York Times columnist Thomas Friedman of “The World is Flat” fame.

Talking about that book, I must say “The World is Flat” makes a good reading. More than those ten “flatteners” Friedman describes (in Chapter 2), the small details and interviews here and there throughout the book are what make it interesting. Talking of the ten flatteners, I think he mislabeled Flattener #2 (“When Netscape went public 8/9/95”) a bit. From the description, it sounds to me that the bandwidth overcapacity built during internet bubble was the real flattener. “Telecom bust” could have been a better label.

And in there, I find this logic a bit hard to digest. Why did American companies have to lay a lot of cables to a poor country like India? Laying cables to connect to Japan and Europe made business sense, unless the telecommunications companies were foreseeing a big future market here. Were they? The argument – that India got lucky to get so much bandwidth for cheap due to telecom companies investing themselves out of the market – may not be right. Demand for bandwidth might have come later, after the outsourcing industry got some roots here. Not the other way round as suggested.

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