Africa is the last wave of outsroucing

Africa is the last wave of outsroucing (bbc.co.uk)

43 points by ashnyc 15 years ago | 26 comments

There is only on last place let on this earth where you can have a labor arbitrage, and africa it is. Asia still has some room but africa will be the last big labor pool

maxklein 15 years ago |

Kenya has an advantage over most other cheap countries for call center outsourcing, and it's the accent. The kenyan accent is easy to understand and more crisp, compared to accents like Indian, Chinese or West African. See sample: http://www.youtube.com/watch?v=8U1h51HiqTg

mattm 15 years ago | |

I don't know if I agree with this completely. I lived in Nairobi in the summer of 2004 and had a real difficult time understanding people for the first couple of weeks.

However, the people generally do speak quite slowly with melodic voices and emphasized pronunciation.

kranner 15 years ago | |

Which Indian accent? Peter Sellers'?

ohashi 15 years ago |

Kenya is interesting. Heard of a competitor doing it while I was in Asia. I looked at Ethiopia, but the cost of telecom is huge. With Kenya getting a fiber and some semblance of stability that alone is a game changer. Not sure what the labor differential is, but English+Fiber+Relative Stability == pretty good candidate. Assuming cost is equal or below Philippines, I would definitely consider it.

ryana 15 years ago |

A friend of mine from grad school was born to a Nigerian father (who now practices medicine in South Africa) and spent a good bit of time there growing up. He said that a handful of people there are desperate for the ability to start firms like this because of the large number of native-English speakers and the fact that they are in the same time zone as England. There's definitely a belief among successful Africans that Africa could be the next step for outsourcing.

However, they all knew that it wasn't something that could work because of the perception of doing business in Nigeria. The article makes it seem like there is a still a little of that concern with Kenya, but it looks like they may be the ultimate winner in this arena.

l0nwlf 15 years ago |

You can fix the typo. [ outsroucing -> outsourcing ]

Qz 15 years ago |

The linked to map of the undersea cable network is pretty interesting as well:

http://www.bbc.co.uk/news/technology-11864350

dkarl 15 years ago |

What about outsourcing to Russia when it becomes a reasonable place for foreign firms to do business? It seems like that wave is yet to come.

natnat 15 years ago | |

Russia is problematic in that its government is notoriously corrupt and controlled by the mob and Russian business interests, but its workers are not poor (and therefore cheap) enough for foreign investors to be able to overlook Russia's political problems.

dkarl 15 years ago | | |

Even for higher-level jobs like engineering or software engineering? I don't imagine call centers popping up in Russia, more like contract engineering firms that do work for American companies. Or is that possible and happening already in the current climate?

Edit/PS: The political problems are exactly why I think the wave is yet to come.

jscore 15 years ago | | |

"Russia is problematic in that its government is notoriously corrupt and controlled by the mob and Russian business interests, "

Don't listen to Western media. I'm sure Russian government would be supportive of anything that provides jobs to the working class.

dkarl 15 years ago | |

I'm not sure why I'm getting downvoted.... I thought I made a stupid but checking salaries here(1) and here(2) (first Google results that popped up) it looks like American software engineers make almost three times as much as Russian software engineers. It's not as big a ratio as India, but wouldn't it be enough to attract work from American companies if the business climate was right?

(1) http://www.payscale.com/research/US/Job=Software_Engineer_%2...

(2) http://www.payscale.com/research/RU/Job=Software_Engineer_%2...

known 15 years ago |

Business is about profit & loss. Do not expect patriotism.

    Chinese economy  = American capitalism - Human rights
    Indian economy   = American capitalism + Wage slavery
    African economy   = American capitalism + Slavery

In globalized economy, jobs will go where businesses get maximum profit.

alexro 15 years ago | |

Or cheap people will come to where businesses get maximum profits

known 15 years ago | | |

http://en.wikipedia.org/wiki/Insourcing versus http://en.wikipedia.org/wiki/Outsourcing

yesno 15 years ago |

Race to the bottom.

berntb 15 years ago | |

>>Race to the bottom.

Probably, but you seem to imply that is bad?!

What happens when all the world's areas of dirt poor people has been "used up" by outsourcing, so they lack dirt poor people? [Edit: That is, what will happen after the race to the bottom?]

I really don't have an idea about the answer. But the world will be better, with much fewer poor people.

jacoblyles 15 years ago | | |

It's going to be strange to live in a world where there is no longer a double-digit percentage of poor people. There may still be pockets of poor in areas at war or under very dysfunctional regimes. But poor continents or regions will be things of the past. It's so incredibly different from anything that has happened before in all of recorded history.

yesno 15 years ago | | |

Will the world become a better place?

That depends on whom you asked. From my perspective the world was a better place in the past but that's my personal opinions.

Has India become a better country because of all the offshoring? Their GDP might increase, but what about their quality of life? What about those overwork IT workers?

There are 2 things I learned in life so far:

1) There's this thing called "balance".

One gives, the other receives. One gets something, the other lose something. Addition, subtraction.

2) Money is the root of all evil.

I've never perceived that money can make the world a better place. In 1998, money nearly destroys Asia. In 2008, money hurts western countries.

US residents probably have more money than the other countries. But at the same time, check out the obesity level of US residents. Check out how many trash US produces. Why do you think people are buzzing over "green" thing.

If you have more money, you will want more of everything. The end result of this cycle hasn't been good so far.

As of today, the world has more problems than it was. Eliminate one, then two or more problems will arise.