Yahoo shut down its development offices in India recently. I think most large software development companies with most of their teams in the US will eventually come to the same conclusion and do the same thing. My guess is that the only ones that will remain are the ones that make their teams there strictly independent and focused on problems facing the Indian market.
Unfortunately, that is not how those offices typically operate - they usually end up doing small projects that people in the main offices in the US think are safe to be handled overseas. It is not like they think the folks in India are less capable or dedicated - it just makes more logical sense to have everyone working on important projects to all be in the same timezone, located more or less close by geographically and able to communicate well with each other. Since that is not easy to do between the US and India, even if a project of importance happens to have arisen at the Bangalore office, it eventually gets moved to the US because it is too important to be done by a team that no one has much contact with.
Also, folks sitting in the US do not have as much perspective on the Indian market (or any other market for that matter) so they tend to miss opportunities that people there would normally see. Typically I have not seen these offices solving too many problems for the developing world. Historically, I think the number of new solutions that came out for the Indian market from these large companies has been low, especially from an engineering viewpoint. All the new ideas such seem to have come from small startups and not from the smaller offices of the established companies. Even when the established companies do come out with solutions for the local market, it seems like the initiatives originated from Indian employees in the US, not in India.
So from the perspective of the large companies, it makes sense to close down operations in India - if they are unable to innovate for the local market, and it is known that communication can be a problem, why keep these offices running? I know some folks do it because it is cheaper there - but that gap is quickly reducing..people's starting salaries have nearly doubled in the last 5-6 years. It is already nearly half of what folks make in the US, so it seems like in the next 10 years or so the gap in salaries will be mostly gone. So it wont make much financial sense to keep engineers there either.
So is this a bad thing? Are we moving in a direction where unemployment for engineers will once again become a problem? I dont think so - I think India will have its own strong startups coming out soon. There are already quite a few that seem to be doing well, and it will get better over time. The startup scene there is heating up, and college grads there are increasingly opting to work at one of those rather than join a conventional large company with a big name. Eventually we will have our own big names, perhaps ones that will compete or surpass the likes of Google and Facebook. China is already moving in that direction and I believe India will soon catch up. In fact I think most countries with strong engineering education will develop its own version of a Silicon Valley with startups churning out innovative solutions for their people.
I am curious how the next 5-10 years will play out in India, startup-scene-wise.
Unfortunately, that is not how those offices typically operate - they usually end up doing small projects that people in the main offices in the US think are safe to be handled overseas. It is not like they think the folks in India are less capable or dedicated - it just makes more logical sense to have everyone working on important projects to all be in the same timezone, located more or less close by geographically and able to communicate well with each other. Since that is not easy to do between the US and India, even if a project of importance happens to have arisen at the Bangalore office, it eventually gets moved to the US because it is too important to be done by a team that no one has much contact with.
Also, folks sitting in the US do not have as much perspective on the Indian market (or any other market for that matter) so they tend to miss opportunities that people there would normally see. Typically I have not seen these offices solving too many problems for the developing world. Historically, I think the number of new solutions that came out for the Indian market from these large companies has been low, especially from an engineering viewpoint. All the new ideas such seem to have come from small startups and not from the smaller offices of the established companies. Even when the established companies do come out with solutions for the local market, it seems like the initiatives originated from Indian employees in the US, not in India.
So from the perspective of the large companies, it makes sense to close down operations in India - if they are unable to innovate for the local market, and it is known that communication can be a problem, why keep these offices running? I know some folks do it because it is cheaper there - but that gap is quickly reducing..people's starting salaries have nearly doubled in the last 5-6 years. It is already nearly half of what folks make in the US, so it seems like in the next 10 years or so the gap in salaries will be mostly gone. So it wont make much financial sense to keep engineers there either.
So is this a bad thing? Are we moving in a direction where unemployment for engineers will once again become a problem? I dont think so - I think India will have its own strong startups coming out soon. There are already quite a few that seem to be doing well, and it will get better over time. The startup scene there is heating up, and college grads there are increasingly opting to work at one of those rather than join a conventional large company with a big name. Eventually we will have our own big names, perhaps ones that will compete or surpass the likes of Google and Facebook. China is already moving in that direction and I believe India will soon catch up. In fact I think most countries with strong engineering education will develop its own version of a Silicon Valley with startups churning out innovative solutions for their people.
I am curious how the next 5-10 years will play out in India, startup-scene-wise.
