This week Time Magazine online published an article that asked ‘Could the information economy help narrow the gap between the rich and the poor?’ Apparently this is the implication of a new study which appeared in the journal Science. The research is a collection of data from 21 populations in order to look at how wealth gets trapped within certain families.
An interesting conclusion resulted from this study. As wealth shifts from material goods like factories to intangibles like social networks and the ability to innovate, there's more of an opportunity for a person who is born poor to work their way up and penetrate the once elite word of the rich. Similarly, someone who is born rich can just as easily lose their place in the economic food chain.
For me, this study has a clear tie with the outsourcing industry, in particular offshoring. After all, the very nature of offshoring is the participation in the global economy by less developed countries. Information technology has resulted in gloabalisation which has facilitated the redundancy of time and space barriers. As such, relatively undeveloped counties are not as marginalized as they once where and can, sorry excuse me, and are supplying services to the once infallible developed nations.
Farhan Mirza, Partner, AT Kearney, the global management consulting firm, agrees explaining: ‘the IT industry has in many ways been a great leveler to put many emerging economies on the map and give them a leg-up.’ He continues ‘the intangible nature of most IT services has enabled ‘location’ to be less of an issue, opening up this potential.’
Miraz says that by looking at foreign direct investment as well as IT exports from low cost countries, you can see significant growth over the last decade; ‘the availability of skilled IT labour, and attractive IT services from these geographies has qualified them on to the buyers shortlist.’
In essence IT has had a major role to play in making equality a reality. However, this news analysis is in no way claiming that global equality will ever be a reality. This an extreamly complex issue that one can not claim to know the answer to. There is also an insurmountable sum of arguments that support the notion that outsourcing/offshoring works to keep the economically stable countries in their authoritative position and the less developed counties in there place, dragging behind, never able to fully compete. This argument is formed through the actuality of offshoring being the consumption of cheap labour from poorer countries. Nonetheless, this argument is highlighting a problem without a solution.
One can pontificate for generations about the exploitation of poor counties and how to bring them on par with the developed world. This pontification has been, I believe, a crime the developing world has been guilty of for far too long. Studies have proven that charity does not necessarily work. On the other hand India, which is famously one of the most prolific outsource providers in the world, has experienced robust economic growth. Countless studies have attributed this to globalization and liberalization of the Indian economy. This denotes that India’s participation in the global economy has had a positive impact on the country. Where charity has failed, economic participation seems to have prevailed.
Outsourcing is not infallible in its approach nor is it the answer to social inequalities. It does however seem that it may be a step in the right direction when looking at global inequalities. A brave statement to make, I hear you gasp. A writer can only comment on the evidence that has been put before them.
