Setting up ops in India: Thoughts post Friedman

If only because pretty much every company I talk to should at least consider some offshoring for software development and support, I found this post very interesting (via Emergic).

If you were setting up in India would you put all your pappadums in one basket or would that be a false economy of scale? Sramana Mitra has some contrarian ideas, based on getting the most out of people by allowing them to feel good about not just supporting, but living close to, their families. You could argue this approach is the most sensible one to world flattening. I mean if you’re offshoring to India, ie becoming a more distributed development organization, does it then make sense to rely on an emerging resource (and salary) bottleneck such as Bangalore?

Sriram’s argument take Friedman style flattening to its natural conclusion.

Tech Ronin asks: The World is Flat, Now What?

After all, Friedman is a globalization cheerleader, and for all his understanding of local issues, he also often veers into neo-liberal autistic economics, where he forgets human costs. Different people argue with Friedman for different reasons – the mark of a good op ed columnist.

Atunu Dey offers a pretty solid pushback against some elements of the Flat hypothesis, in this somewhat biting post called The World is Mad:

Bestsellers touting the benefits of globalization are a regular feature of our times. Case in point: Tom Friedman’s The World is Flat. The title is supposed to shock the reader. “Damn! I thought the world was round. Thanks Tom, you are a bloody genius.”

The fallacy of composition is what I think it is called—where you conclude something is true for the whole when it is only true for a part. You see one bit and it looks, say, smooth and you conclude that the whole is smooth. I see a bit of the earth around me and it looks flat to me and so I conclude that the earth is flat. Hasty generalization is a type of fallacy of composition. Bangalore is full of IT professionals doing well, so the Third World is doing well.

The satirical approach was also gleefully taken up in this piece in a NY Press by Matt Tiabbo called Flathead:

To recap: Friedman, imagining himself Columbus, journeys toward India. Columbus, he notes, traveled in three ships; Friedman “had Lufthansa business class.” When he reaches India—Bangalore to be specific—he immediately plays golf. His caddy, he notes with interest, wears a cap with the 3M logo. Surrounding the golf course are billboards for Texas Instruments and Pizza Hut. The Pizza Hut billboard reads: “Gigabites of Taste.” Because he sees a Pizza Hut ad on the way to a golf course, something that could never happen in America, Friedman concludes: “No, this definitely wasn’t Kansas.”

After golf, he meets Nilekani, who casually mentions that the playing field is level. A nothing phrase, but Friedman has traveled all the way around the world to hear it. Man travels to India, plays golf, sees Pizza Hut billboard, listens to Indian CEO mutter small talk, writes 470-page book reversing the course of 2000 years of human thought. That he misattributes his thesis to Nilekani is perfect: Friedman is a person who not only speaks in malapropisms, he also hears malapropisms. Told level; heard flat. This is the intellectual version of Far Out Space Nuts, when NASA repairman Bob Denver.

My own note to Tiabbi, who seems to take Friedman’s metaphor mixing a little bit too hard–ummm, the world hasn’t been round for 2000 years, at least not on the maps our predecessors were using… Remember that dude Columbus-he made a big bet, right?

But back to Sramana Mitra’s advice, which provides a possible answer to Ronin’s question about what next- world flattening leads (inevitably?) to localization. That is, globalization is just a stage on the way to localization. I would argue the flat future won’t just be about the cheapest labour, but should be about the happiest, most fulfilled labour. sounds idealistic i know, but i am a fan of the localization movement (buy food grown within 50 miles of where you live, support your local small stores, choose the corner coffee shop over Starbucks, that kind of thing). I mean if you can live and work anywhere, why bother moving to Bangalore? Why migrate to the crowded city, unless its a lifestyle choice?

Am I tripping? Maybe. But when Nike, a 1990s sweatshop badboy, starts doing things like sourcing materials within 200 miles of the factory to reduce environmental and fuel costs, that’s localization (and associated marketing) in action.

So if you are a vendor or enterprise doing your due diligence in offshoring, then take account of cultural differences. You think Europe is a mishmash of cultures? Well, India is probably an even richer tapestry. Flat isn’t just shorthand for Bangalore.