| Let the debate begins. Outsource to India or China? I | | | | most definitely mobile application outsourcing. |
| am not going to bore you with the typical cliche that | | | | China has been the 'world's factory" over 20 plus |
| India is better at IT and China is better at | | | | years. It sure became a dominate force in high tech |
| manufacturing. I will only focus my arguments on 2 | | | | manufacturing powerhouse. The official statistics of |
| areas. I predict India is going to win the cost saving | | | | 2008 from Chinese government indicated high-tech |
| competition in the next decade. However, China is | | | | products has an export volume of USD 347.8 billion. |
| going to blow India away in one particular software | | | | Such astonishing number makes China second place |
| outsourcing. That is mobile application development. | | | | worldwide for high tech manufacture scale, and first in |
| So, why am I arguing India wins the cheap labor | | | | global market share. Also, by April 2009, there are total |
| game? Didn't cities like Mumbai, Bangalore and | | | | of 678.8 million mobile phone subscribers in China. It |
| Hyderabad experience sky rocking wage increases in | | | | makes me believe China has better overall ecosystem |
| the last few years? True, however India's GDP per | | | | for mobile application development with Smartphone |
| capital still stays at the bottom of the world ($1,016 | | | | manufacturing know how, talents, user base and also |
| USD). Besides major urban areas, the country lacks | | | | infrastructure. |
| modern infrastructure through out most of its states. In | | | | China is laying out massive infrastructure to meet its |
| comparison, China's GDP per capital is already at | | | | growing network demands. Starting in 2009, 3 largest |
| $3,315 USD by 2008. It is quickly going into second | | | | mobile operators in China will invest combined of $30 |
| wave of urban development inland. China also started | | | | billion dollars on 3G network over the next few years. |
| a series of land reform making its farming structure | | | | It will certainly stimulate the entire industry value chain. |
| more capitalism. These will have major impacts on | | | | Downstream software vendors can ride on the trend |
| overall national income level in the near future. | | | | and strengthen their mobile technology capabilities. |
| Perhaps the bigger story is Chinese currency. Recent | | | | They can not only profit from domestic opportunities |
| global recession is quietly reshuffling the country's | | | | but also build up domain knowledge and talent base |
| reserves. With rumors like US is going to be | | | | over Indian providers. More over, technical talents who |
| downgraded due to enormous fiscal deficits, it certainly | | | | live and work in China get to enjoy much broader 3G |
| makes Chinese RMB look quite promising as an | | | | access as end users. It helps them to further innovate |
| alternative. RMB has already hit all time high several | | | | when it comes to providing mobile application |
| times against dollars since subprime crisis began in late | | | | development services to oversea clients. |
| 2008. Therefore, this is actually good news for India. | | | | In short, my prediction is that India will win the cost |
| Chinese labors will soon become relatively more | | | | effective programming competition over China in the |
| expensive for Westerners. For pure labor arbitrage, I | | | | next decade. But, China will emerge as leading country |
| predict outsourcing in India wins. | | | | for mobile application outsourcing. Should you |
| So how can China compete better in service oriented | | | | outsource to India or China? Let the great debate |
| outsourcing? Well, not BPO, not ITO, maybe CRO, but | | | | begins! |