The World Is Flat (5 page)

Their teacher, a charming eight-months-pregnant young woman dressed in a traditional Indian sari, moved seamlessly among British, American, and Canadian accents as she demonstrated reading a paragraph designed to highlight phonetics. She said to the class, “Remember the first day I told you that the Americans flap the 'tuh' sound? You know, it sounds like an almost 'duh' sound-not crisp and clear like the British. So I would not say”—here she was crisp and sharp—'“Betty bought a bit of better butter' or 'Insert a quarter in the meter.' But I would say”—her voice very flat—“'Insert a quarter in the meter' or 'Betty bought a bit of better butter.' So I'm just going to read it out for you once, and then we'll read it together. All right? 'Thirty little turtles in a bottle of bottled water. A bottle of bottled water held thirty little turtles. It didn't matter that each turtle had to rattle a metal ladle in order to get a little bit of noodles.'

“All right, who's going to read first?” the instructor asked. Each member of the class then took a turn trying to say this tongue twister in an American accent. Some of them got it on the first try, and others, well, let's just say that you wouldn't think they were in Kansas City if they answered your call to Delta's lost-luggage number.

After listening to them stumble through this phonetics lesson for half an hour, I asked the teacher if she would like me to give them an authentic version-since I'm originally from Minnesota, smack in the Midwest, and still speak like someone out of the movie Fargo. Absolutely, she said. So I read the following paragraph: “A bottle of bottled water held thirty little turtles. It didn't matter that each turtle had to rattle a metal ladle in order to get a little bit of noodles, a total turtle delicacy... The problem was that there were many turtle battles for less than oodles of noodles. Every time they thought about grappling with the haggler turtles their little turtle minds boggled and they only caught a little bit of noodles.”

The class responded enthusiastically. It was the first time I ever got an ovation for speaking Minnesotan. On the surface, there is something unappealing about the idea of inducing other people to flatten their accents in order to compete in a flatter world. But before you disparage it, you have to taste just how hungry these kids are to escape the lower end of the middle class and move up. If a little accent modification is the price they have to pay to jump a rung of the ladder, then so be it-they say.

“This is a high-stress environment,” said Nilekani, the CEO of Infosys, which also runs a big call center. “It is twenty-four by seven. You work in the day, and then the night, and then the next morning.” But the working environment, he insisted, “is not the tension of alienation. It is the tension of success. They are dealing with the challenges of success, of high-pressure living. It is not the challenge of worrying about whether they would have a challenge.”

That was certainly the sense I got from talking to a lot of the call center operators on the floor. Like any explosion of modernity, outsourcing is challenging traditional norms and ways of life. But educated Indians have been held back so many years by both poverty and a socialist bureaucracy that many of them seem more than ready to put up with the hours. And needless to say, it is much easier and more satisfying for them to work hard in Bangalore than to pack up and try to make a new start in America. In the flat world they can stay in India, make a decent salary, and not have to be away from families, friends, food, and culture. At the end of the day, these new jobs actually allow them to be more Indian. Said Anney Unnikrishnan, a personnel manager

at 24/7, “I finished my MBA and I remember writing the GMAT and getting into Purdue University. But I couldn't go because I couldn't afford it. I didn't have the money for it. Now I can, [but] I see a whole lot of American industry has come into Bangalore and I don't really need to go there. I can work for a multinational sitting right here. So I still get my rice and sam-bar [a traditional Indian dish], which I eat. I don't need to, you know, learn to eat coleslaw and cold beef. I still continue with my Indian food and I still work for a multinational. Why should I go to America?”

The relatively high standard of living that she can now enjoy-enough for a small apartment and car in Bangalore-is good for America as well. When you look around at 24/7's call center, you see that all the computers are running Microsoft Windows. The chips are designed by Intel. The phones are from Lucent. The air-conditioning is by Carrier, and even the bottled water is by Coke. In addition, 90 percent of the shares in 24/7 are owned by U.S. investors. This explains why, although the United States has lost some service jobs to India in recent years, total exports from American-based companies-merchandise and services-to India have grown from $2.5 billion in 1990 to $5 billion in 2003. So even with the outsourcing of some service jobs from the United States to India, India's growing economy is creating a demand for many more American goods and services. What goes around, comes around.

Nine years ago, when Japan was beating America's brains out in the auto industry, I wrote a column about playing the computer geography game Where in the World is Carmen Sandiego? with my nine-year-old daughter, Orly. I was trying to help her by giving her a clue suggesting that Carmen had gone to Detroit, so I asked her, “Where are cars made?” And without missing a beat she answered, “Japan.”

Ouch!

Well, I was reminded of that story while visiting Global Edge, an Indian software design firm in Bangalore. The company's marketing manager, Rajesh Rao, told me that he had just made a cold call to the VP for engineering of a U.S. company, trying to drum up business. As soon as Mr. Rao introduced himself as calling from an Indian software firm, the U.S. executive said to him, “Namaste,” a common Hindi greeting. Said Mr. Rao, “A few years ago nobody in America wanted to talk to us. Now they are eager.” And a few even know how to say hello in proper Hindu fashion. So now I wonder: If I have a granddaughter one day, and I tell her I'm going to India, will she say, “Grandpa, is that where software comes from?”

No, not yet, honey. Every new product-from software to widgets-goes through a cycle that begins with basic research, then applied research, then incubation, then development, then testing, then manufacturing, then deployment, then support, then continuation engineering in order to add improvements. Each of these phases is specialized and unique, and neither India nor China nor Russia has a critical mass of talent that can handle the whole product cycle for a big American multinational. But these countries are steadily developing their reseach and development capabilities to handle more and more of these phases. As that continues, we really will see the beginning of what Satyam Cherukuri, of Sarnoff, an American research and development firm, has called “the globalization of innovation” and an end to the old model of a single American or European multinational handling all the elements of the development product cycle from its own resources. More and more American and European companies are outsourcing significant research and development tasks to India, Russia, and China.

According to the information technology office of the state government in Karnataka, where Bangalore is located, Indian units of Cisco Systems, Intel, IBM, Texas Instruments, and GE have already filed 1,000 patent applications with the U.S. Patent Office. Texas Instruments alone has had 225 U.S. patents awarded to its Indian operation. “The Intel team in Bangalore is developing microprocessor chips for high-speed broadband wireless technology, to be launched in 2006,” the Karnataka IT office said, in a statement issued at the end of 2004, and “at GE's John F. Welch Technology Centre in Bangalore, engineers are developing new ideas for aircraft engines, transport systems and plastics.” Indeed, GE over the years has frequently transferred Indian engineers who worked for it in the United States back to India to integrate its whole global research effort. GE now even sends non-Indians to Bangalore. Vivek Paul is the president of Wipro Technologies, another of the elite Indian technology companies, but he is based in Silicon Valley to be close to Wipro's American customers. Before coming to Wipro, Paul managed GE's CT scanner business out of Milwaukee. At the time he had a French colleague who managed GE's power generator business for the scanners out of France.

“I ran into him on an airplane recently,” said Paul, “and he told me he had moved to India to head up GE's high-energy research there.”

I told Vivek that I love hearing an Indian who used to head up GE's CT business in Milwaukee but now runs Wipro's consulting business in Silicon Valley tell me about his former French colleague who has moved to Bangalore to work for GE. That is a flat world.

Every time I think I have found the last, most obscure job that could be outsourced to Bangalore, I discover a new one. My friend Vivek Kulkarni used to head the government office in Bangalore responsible for attracting high technology global investment. After stepping down from that post in 2003, he started a company called B2K, with a division called Brickwork, which offers busy global executives their own personal assistant in India. Say you are running a company and you have been asked to give a speech and a PowerPoint presentation in two days. Your “remote executive assistant” in India, provided by Brickwork, will do all the research for you, create the PowerPoint presentation, and e-mail the whole thing to you overnight so that it is on your desk the day you have to deliver it.

“You can give your personal remote executive assistant their assignment when you are leaving work at the end of the day in New York City, and it will be ready for you the next morning,” explained Kulkarni. “Because of the time difference with India, they can work on it while you sleep and have it back in your morning.” Kulkarni suggested I hire a remote assistant in India to do all the research for this book. “He or she could also help you keep pace with what you want to read. When you wake up, you will find the completed summary in your in-box.” (I told him no one could be better than my longtime assistant, Maya Gorman, who sits ten feet away!)

Having your own personal remote executive assistant costs around $1,500 to $2,000 a month, and given the pool of Indian college grads from which Brickwork can recruit, the brainpower you can hire dollar-for-dollar is substantial. As Brickwork's promotional material says, “India's talent pool provides companies access to a broad spectrum of highly qualified people. In addition to fresh graduates, which are around 2.5 million per year, many qualified homemakers are entering the job market.” India's business schools, it adds, produce around eighty-nine thousand MBAs per year.

“We've had a wonderful response,” said Kulkarni, with clients coming from two main areas. One is American health-care consultants, who often need lots of numbers crunched and PowerPoint presentations drawn up. The other, he said, are American investment banks and financial services companies, which often need to prepare glossy pamphlets with graphs to illustrate the benefits of an IPO or a proposed merger. In the case of a merger, Brickwork will prepare those sections of the report dealing with general market conditions and trends, where most of the research can be gleaned off the Web and summarized in a standard format. “The judgment of how to price the deal will come from the investment bankers themselves,” said Kulkarni. “We will do the lower-end work, and they will do the things that require critical judgment and experience, close to the market.” The more projects his team of remote executive assistants engages in, the more knowledge they build up. They are full of ambition to do their higher problem solving as well, said Kulkarni. “The idea is to constantly learn. You are always taking an examination. There is no end to learning... There is no real end to what can be done by whom.”

Unlike Columbus, I didn't stop with India. After I got home, I decided to keep exploring the East for more signs that the world was flat. So after India, I was soon off to Tokyo, where I had a chance to interview Kenichi Ohmae, the legendary former McKinsey & Company consultant in Japan. Ohmae has left McKinsey and struck out on his own in business, Ohmae & Associates. And what do they do? Not consulting anymore, explained Ohmae. He is now spearheading a drive to outsource low-end Japanese jobs to Japanese-speaking call centers and service providers in China. “Say what?” I asked. “To China? Didn't the Japanese once colonize China, leaving a very bad taste in the mouths of the Chinese?”

Well, yes, said Ohmae, but he explained that the Japanese also left behind a large number of Japanese speakers who have maintained a slice of Japanese culture, from sushi to karaoke, in northeastern China, particularly around the northeastern port city of Dalian. Dalian has become for Japan what Bangalore has become for America and the other English-speaking countries: outsourcing central. The Chinese may never forgive Japan for what it did to China in the last century, but the Chinese are so focused on leading the world in the next century that they are ready to brush up on their Japanese and take all the work Japan can outsource.

“The recruiting is quite easy,” said Ohmae in early 2004. “About one-third of the people in this region [around Dalian] have taken Japanese as a second language in high school. So all of these Japanese companies are coming in.” Ohmae's company is doing primarily data-entry work in China, where Chinese workers take handwritten Japanese documents, which are scanned, faxed, or e-mailed over from Japan to Dalian, and then type them into a digital database in Japanese characters. Ohmae's company has developed a software program that takes the data to be entered and breaks it down into packets. These packets can then be sent around China or Japan for typing, depending on the specialty required, and then reassembled at the company's database in its Tokyo headquarters. “We have the ability to allocate the job to the person who knows the area best.” Ohmae's company even has contracts with more than seventy thousand housewives, some of them specialists in medical or legal terminologies, to do data-entry work at home. The firm has recently expanded into computer-aided designs for a Japanese housing company. “When you negotiate with the customer in Japan for building a house,” he explained, “you would sketch out a floor plan-most of these companies don't use computers.” So the hand-drawn plans are sent electronically to China, where they are converted into digital designs, which then are e-mailed back to the Japanese building firm, which turns them into manufacturing blueprints. “We took the best-performing Chinese data operators,” said Ohmae, “and now they are processing seventy houses a day.” Chinese doing computer drawings for Japanese homes, nearly seventy years after a rapacious Japanese army occupied China, razing many homes in the process. Maybe there is hope for this flat world...