Tuesday, December 20, 2005

Globalisation in action

I want to do some more on this, highlighting how we’re leaking our so-called ‘knowledge economy’ jobs to the East; not just the ‘simple’ manufacturing jobs.

A particularly high-profile example of jobs shifting to the East was when the bagless vacuum cleaner innovator and manufacturer Dyson decided to close its manufacturing plant in Malmesbury, Wiltshire back in 2002. At the time, James Dyson cited factors such as being closer to Eastern markets and suppliers as important considerations. However, he didn’t shy away from admitting that the overriding factor was cost. Some statistics to give an idea of how UK and Far Eastern costs compare are given below; in my opinion, these are rather generous – I would expect wages and property prices in the Far East to be considerably lower than those stated here.
  • UK worker: £9 per hour
  • Malaysian worker: £3 per hour
  • UK office rent: £114 sq m a year
  • Malaysia office rent: £38 sq m a year
Source: Economist Intelligence Unit and BBC

Importantly, Dyson kept its research and development labs here in the UK – a classic case of shifting the manufacturing jobs to the Far East whilst keeping the brain jobs here. But things are changing rapidly, and over the last few years the UK has seen a number of similarly high profile jobs move to the East. This time, however, they aren’t manufacturing jobs – they’re our much-prized knowledge economy jobs.

The call-centre industry employs thousands of people in the UK, and is seen as an important employment sector with potential for growth and reemployment of those who have lost their low-skilled manufacturing jobs to the Far East. So what happens, then, when employers such as ntl:, BT, National Rail Enquiries (ATOC), Orange, 3, the AA, RAC, HSBC, Aviva, and GE Captial, start moving these jobs out East, too? ATOC expects to save £25m over several years. Amicus, the trade union, says 200,000 call centre and back-office processing jobs will be outsourced to India by 2010.

No matter that the vast majority of Brits (myself included) absolutely hate dealing with Indian call centres (they might be well educated, but their English still sucks) - the companies would rather take the PR hit than keep coughing up more than they have to. So we can wave goodbye to the call centre jobs, too.

But wait, there’s more! Microsoft, Sun, Intel, IBM, HP, Infosys, Cisco, Google, and over 1500 other info-tech, Western employer-of-the-future companies, are expanding their Indian operations – and it’s not just about meeting the demands of the Indian market. It’s about saving money over offering similar jobs to Western engineers. So much for keeping our brainy jobs.

And to think, this is just the tip of a very, very large iceberg.


Blogger LeverWealth said...

...and China tells us today they have overtaken the UK economy.

20/12/05 7:31 pm  

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