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Thursday
Dec222005

AFEM reports on French anti-globalization sentiment

france.gif As an avid observer of France I have mostly been concerned with the discourse surrounding the almost institutional anti-globilazation and anti-Anglo Saxon sentiment within France her society and her politics. This post is not different.

In this post over at "A Few Euros More" Edward Hugh point us to this article from FT which reports on a survey just published by the French employers' association MEDEF and the international consultancy KPMG about French busnisess' attitude towards the benefits of offshoring and outsourcing; (I haven't been able to find the survey so if somebody does, please leave the link in a comment).

The conclusion is apparently a two-edged sword where large French companies actually acknowledges that investing abroad can save home markets whereas smaller French businesses (SMEs) do not see offshoring as a viable strategy for saving jobs. At least that is how I read the FT article. 

From FT; 

"There is a growing gulf between the strategies of such companies (i.e. SMEs with low turn-overs) and larger or more innovative rivals, the report said."

However, as Edward also points out the FT article is a bit ambigous as it also reports that 74% of the companies surveyed said that broader foreign investment actually helped safeguard jobs in France.

Edward;

"Is this an example of 'double entendre'? Is it a real reflection of attitudes to globalisation, or a 'packaging' exercise where it is easier to advocate something as 'new investment' rather than 'moving jobs'."

My interpretation of this is that you have distinguish between small and medium sized businesses (with low-turnovers as also mentioned in the FT article) and large innovative companies. But it sure would have been nice to have that survey.

Apart from the tongue twisting, can we learn anything from the points above?

I think we can, or at least I can.  

Consequently, I must say that the apparent conclusion of the survey surprises me. My analysis of the "anti-globalization sentiment" in France has customarily drawn a sharp line between civil society and politics and businessess where I have gathered the anti-globalization sentiment to come from the former rather than the latter. However, it is also important to note that when speaking of offshoring and outsourcing as business strategy it is clear that small companies do not have that option. Still, it surprises that 56% (up from 29% last year) of SMEs do not see any benfits in moving jobs abroad.

 

Monday
Dec192005

Glitches in web 2.0

web.2.0.jpg I bet you have noticed something as well? Some of our favourite proponents of web 2.0 are experiencing heavy problems with bust servers and abuse of their much appraised open source environments.  What is happening? A sign of web 2.0's inherent weakness or just a random fluke coincidence. Lets do a quick brush up of the events which have been taken place.

First off was the famous and beloved search engine/encyclopedia Wikipedia who had to abandon its adherence to the open-source editing environment, at least in part. See article from FT. The real question here is whether it was really plausible that Wikipedia did not have to take this step at some point along the way. I still see Wikipedia as one of the strongest beacons of web 2.0 there is. However that does not mean you do not have to check your sources but in terms of getting random information fast Wikipedia is the best there is. The economic theory of network externalities help us explain this.

"A network externality arises when an addtional member conveys benefits to those already on the network" - Begg, Fisher and Dornbush chapter 14; 7th edition. This is very much the truth with Wikipedia and the nature of web 2.0 in general.

See also this article from Wired magazine on Wikipedia and the Encyclopedia Britannica. 

Apart from the Wikipedia story some of the most hailed and appraised web 2.0 services have had serious problems with providing their services.

What parts of web 2.0 are also misbehaving?  

During the last weeks the pupular blogging tool/service Typepad was down to the dispair of all the subscribers. And since the Typepad service is paid for, a refund could or should be on the board for many of the subscribers. It is now up again, but for users like myself who do not have backup of the posted contents it might be time to set up a shadow blog just in case. For my part, Squarespace has luckily been behaving just fine ... for now!

Lastly, the revolutionary internet "surfing" tool del.icio.us is currently down. The reason apparently is the recent Yahoo acquisition of the popular tagging tool which have become the bread and butter of anyone who uses the internet to gather and store information. The real reason seems to be that the service simply could not handle the massive surge in new users after the news of its Yahoo affiliation.

You want to know more abou what it written above?

Well, a quick trip through the blogossphere through Technorati  will yield a large enough amount of information to keep you seated at your screen until next christmas.

A lot of the information above is taken from this post at Betaflow.com. For specific news on the del.icio.us situation you should go visit this official del.icio.us blog.

Monday
Dec192005

India's niche in globalization part 2

india_outsourcing.jpg I have reported before on India's role and essentially niche in globalization as the "back office of the world." The main point epitomized in this report by Deutche Bank Research was that India currently scoops up an astounding 44% of the global market in terms of IT services and IT-based business processes. This is impressive by any measure but as reported this week by the Economist the potential of India as offshoring and outsourcing country seems to show no end.

 See article here (walled for non-subscribers!)

Not only does the investments from it-companies continue to flow in at a steady rate but other businesses are now targeting India as well as a place of cheap labour combined with a relatively well-educated English speaking workforce. According to the Economist a third stage of outsourcing is now apparent in India characterized by the move of ever more complex tasks to be performed in India for foreign companies.

"All these investments illustrate that a third stage of the great Indian services-export boom is well underway. In the first, firms such as TCS developed world-class expertise in software “application development and maintenance”, and their low-cost developers became the preferred partners of many Western IT firms. In the second, Indian firms and the local “captive” operations of multinationals started offering low-end back-office services that could take place a continent away—telephone call-centres, transcribing medical records, processing insurance claims and so on. In the third, in both ITses”, and the broader spectrum of other “business processes" ever-more sophisticated functions are happening in India."

The article describes an India which is far more versatile than merely being confined to the establishment of call-centers, simple software programming facilities etc. India is ready to take on much more and the market appears to be there.

"(...) “traditional IT outsourcing”—such as the remote management of whole systems, a market now dominated by the big global IT consultancies. This is expected to rise from 8% of Indian sales now to about 30% in 2010, while software-development's share will fall from 55% to 39%. In business-process-offshoring, the big industries will remain banking and insurance. But rapid expansion is also expected in other areas, like legal services."

The biggest obstacle ironically seems to be that the educated workforce in India is not growing fast enough. Moreover, these new businesses need help from the government in terms of the steady development of infrastructure.

"Yet the supply of talent may be the biggest constraint on the Indian industry's growth. (...) IT firms in Bangalore, for example, are in revolt against the local government for its neglect of basic amenities."

But surely, this cannot stop India; right?