By Govindan Parayil (eds.)
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Extra info for Political Economy and Information Capitalism in India: Digital Divide, Development and Equity
Example text
3. Technological change and outsourcing The reported increase in outsourcing during the 1990s suggests that changes in circumstances have increased the benefits from outsourcing. This appears to have been true initially of manufacturing and subsequently of services. Technological change is seen as having played an important role in both cases. In the case of manufacturing, the acceleration of offshoring and outlocation, which began in the 1980s, was driven by three features of technological change.
Thus, seen inter-temporally, what we have is that for each level of cumulative outsourcing, there is some of this activity that is undertaken by firms within the country of origin of the demand and some that is undertaken by firms from outside. It is the implications of the latter that concern us here. Different kinds of considerations could enter into the outsourcing decision. The first, of course, is the cost consideration. There are many ways in which outsourcing can lead to reduced costs. For example, certain activities are best undertaken by specialised entities, which are able to reduce costs through such specialisation either because of the large scale of operations they can sustain by pooling demands from multiple players or because of their ability to keep overhead costs down and run profitably a small-scale operation.
A self-reinforcing dynamic facilitated the internalisation of the ethos of higher education by Indians, even as most were structurally excluded from the fruits of economic and social development. Both economic imperatives and the social penchant for higher education contributed to substantial growth in post-secondary educational institutions. For example, there are nearly 10,000 schools (compared to less than 1500 in 1961) above the higher secondary level. Seventy per cent of these are concerned with general education, while the professional and technical schools comprise about 20 per cent.