India Graduates Millions, But Too Few Are Fit to Hire

Besides that, I know from living in the Philippines for six months that a call center job can be like striking gold for people who came up poor. Poverty here is so much different from poverty in the US that it's hard for Americans to understand the motivation of people here. A call center job may suck, but it could be the difference between life in a slum without basic sewerage, and eating at western chain restaurants while texting your friends on your new smart phone. What's basically a birthright in the US is highly prized here.

Anecdote: First year in engineering, we had this computers course, so the lecturer was teaching about input and output devices (Yes they teach this even in engineering). He goes on "Computer pheriperals are either input OR output devices"

One student raised his hand and asked, "Sir, what about the touchscrens like in ATMs ?" (Touchscreen mobiles were not common, yet)

Lecturer goes silent for a minute, and replies "Son, dont try to be oversmart in my class"

-- Just something I saw. Not saying they are that bad everywhere.

The outsourcing boom exploited one persistent mispricing of labor: below that tiny sliver of folks at the top of the educational pyramid in India, there was a slice of folks who had a minimal level of competency and prevailing wages which were absurdly low compared to wages in e.g. the US. I've done telephone support before. You don't have to be a genius to do it. Given that you're not looking for geniuses, you could either find a modestly educated American homemaker (or somebody trying to pay his way through college) at $10 an hour plus costs, or you could employ someone near the top of India's educational distribution for less than $2 an hour, fully-loaded.

Then apply the same economics to folks in the top of that below-the-sliver slice who are able to do back-office line-of-business CRUD apps, which are the outsourcing sweet spot.

Even though India is ginormous, though, there is a finite amount of labor in that slice, and when the global economy became aware of that mispricing, that labor got bid up very rapidly. Prior to the Lehman shock, engineering salaries in India were going up at 50% per year. My company had difficulty keeping any engineer on a project for six months -- they were unwilling to match the new market rates so the market did to them what the market does to everyone: allocates scarce resources efficiently. "You pay peanuts, you get monkeys", to quote one of our Indian engineers. (He now works for a Japanese company at a multiple of his former salary, last I heard.)

Anyhow, the overwrought reporting about the labor mispricing for that one little slice of the market apparently convinced at least some people of something which is manifestly untrue, which is that Indian education is world-class. It's not. India in 2011 is the same as India in 2001 is the same as India in 1951: it is gigantic and filled with lots of desperately poor people who do not have even minimal levels of competency for global work. (It is entirely possible than India in 2051 will not be, but they've got quite a ways to go yet.)

I've been working in enterprise IT (and small business) for about 5 years now. I've never had a good experience in India. There are the few who do come over to the US (on visas) that are exceptional (and possibly in a relative sense) but again don't represent the whole, and nor does my bad experience represent the whole for that matter. The fact is that in more than one occasion (it's actually countless) I've had to hand-hold Indian colleagues on how to fix an issue. It astounds me that this price difference can ever achieve it's value and more importantly do it sustainably over time (re: difficulty keeping an engineer for six months).

Our company has outsourcing in Romania and it's by far better than any other outsourcing I've worked with. I think we've found that "tiniest sliver of folk" in Romania, but it doesn't mean the streets are filled with these type of people, nor do I think we can expand to create a managed service hub of thousands of Romania techies.

At the end of the day I always have to fall back on "you pay for what you get".