A piece of USA teleported in the middle of India

Here is the 4-star luxury hotel where we sleep until the end of this week. We sleep in hotel until we find a rented apartment for the remaining months. In India, you don't want to rent an apartment remotely without seeing it first.

There are only few traces of India.

• There are lots of people employed at desks and guard spots and restaurants, doing little most of the time. This is the case everywhere in India.
  


• Restaurant has Indian menu.

About the blasts in Delhi

Bombings in India are all about communal violence, said Manoj, my Indian coworker in Finland. Communal violence means that Muslims/Hindus/Christians/Tamils take the streets and lynch some members of other ethnic groups. The primary aim of a bomb is to escalate communal violence and only the secondary aim is to kill people with blasts.

The blasts in Delhi killed exceptionally many people, but even then, the way newspapers report about the incident supports Manoj's claim. These are from Monday issue of Hindu Times.

1. The paper reports that Delhi investigators tracked the blasts to an organization namd SIMI, Student's Islamic Movement of India. Arrest orders were given for 3 suspects who live in Uttar Pradesh. However, "Fearing that police action against the three men might fuel tension in communally chaged Azamgarh, police sources said, Uttar Pradesh authorities refused to order their arrest or detention."

2. There's a very tolerance-minded letter to editor by a Muslim who refuses to acknowledge terror strikes as Islamic.

3. Ganesh is a Hindu elephant god, whose main celebration event just ended in Hyderabad. In the final event, lots of Ganesh idols were sunk to an artificial lake near Hyderabad. Among other events, there was an interfaith tolerance event: "Idols resembling common people from different religions were holding the Indian tricolour and placards saying 'we are Hindus, Muslims and Sikhs, but we are Indians and we sill stand together.'"

These illustrate successfully suppressed threat of communal violence. However, actual communal violence unfortunately also happens. Christian prayer halls in Karnataka were recently bombed.

There

The flight took off on Saturday, and we arrived to Hyderabad on Sunday after changing flights in Bombay. I'm writing this from office. More later.

Chilis also grow in Finland

Test photo.

India, an independent country

Colonial powers are often blamed for the plight of developing countries. One common complaint in Africa is that colonial powers drew state boundaries by straight lines and rivers, not giving a damn about ethnic boundaries. This is a source of wars.

Well, after India got independence in 1947, they solved this problem. In 1953, they redivided the states according to language. Andhra Pradesh where I go is the state of Telugu-speaking people. A completely new state, Kerala, was crafted for Malayalam speakers. This was an answer to a threat of India dissolving - after all, a minor zone called Pakistan got independent from India, and there were many princely states (including the princely state of Nizam in Hyderabad) which didn't join union before they were threatened with military force.

That's what independent countries do. The pass legislation which reflects the will of the people and solves internal problems, instead of blaming colonial overlords. The fact that India is a 3rd world country even after the problem of ethnic lines was solved - 55 years ago - is the fault of Indians and their rulers alone. Even if the Brits would know how to turn India into a rich 1st world country, for the last 60 years Indian military would haved chased them away at gunpont. Obviously, the British couldn't do the trick even if they had power, since surely they would have preferred the high tax revenues of a 1st world country to exploitative availability of raw materials.

Freedom comes with responsibility. Even for developing countries.

This post reflects Finnish debate and may be irrelevant for Indian readers.

The moral dilemma

Manna describes path to a society where AI-controlled systems can produce everything material that people need and plenty of what they want. In one chapter, it describes the scenario where a rich minority gets the benefits of the system and the majority is excluded. The excluded ones are housed in huge Mikontalo-style blocks and they are given acceptable standard of living but not much freedom. In that case, it is a pure political choice to split people into two layers; no mechanism prevents more even distribution of affluence.

"I know what you are saying. I try not to think about it. But it's not that unusual. Over the course of history, billions of people have lived this way. Think back to when you were living in suburbia. Your parents had a 3,000 square foot house and the pool at the turn of the century. You were living it up. Unfortunately, at that moment in history, there were billions of people around the world living in poverty -- they were living off a dollar or two per day. Meanwhile, your family had 300 dollars a day. Did you do anything about it? Billions and Billions of people living in third-world countries, squatting together in the dirt, crapping in ditches. They would walk down by the river just like we are doing right now and say to each other, 'There must be a way out.' They could see that they were lost -- totally wasted human potential trapped in a terrible situation. Their kids and their kids' kids forever would live like this because there was absolutely no way out. Did anyone stop to help them? Did you stop to help them? No. You were too busy splashing in the pool. Those billions of people lived and died in incredible poverty."

What justifies me to enjoy Western stadards of freedom, safety and affluence, when so many people are exluded? This is the moral dilemma that is present in Andhra Pradesh, a dirt poor agricultural state with 60% literacy. It may be less visible in the Hyderabad, though.

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The economics of offshore subcontracting

Basic forces

Companies want cost savings when they move their business to offshore countries. This is the first driving factor.

The second is supply and demand: if it is cheap to do some job, say, in Vietnam, then the companies that offshore to Vietnam will be more profitable and win market share or more companies will come to Vietnam. Either way, the demand for work in Vietnam will increase, raising wages. Eventually, some balance will be reached where offshoring is no longer a bargain. This may happen in several ways: In India, the wages have increased. Also, offshored people by definition can't be face-to-face with the customer, may speak lousier English, and have cultural differences, so there is a quality tradeoff: an offshored person is not as good as a local one.

Trust must be an important factor that inhibits offshoring, but I don't know much about it, since when the managers call my number they have already established basic trust between the two companies. However, the trip we do to India is the first transaction with the Indian customer. Establishing deeper levels of trust will happen if the customer perceives that Finnish subcontratees fulfilled expectations and provided good value for money.

Indianization

They say that India used to be cheap, and the cost per employee was about 1/10 of Finnish level 10 years ago. (These are extremely rough numeric estimates and based on hearsay.) Now the wage level is about 1/2 of Finnish levels. In this situation, it is in my case profitable to ship specific expertise from Finland to India. I'm sure that the Indian customer asked offers from several companies before deciding on us. Here's a new word to describe the phenomena:

Indianization: The process of dirt cheap offshoring countries moving up in the subcontracting chain. Characteristic features: Wages increase. The direction of subcontracting relative to Western countries is no longer one-directional but unbalanced bidirectional. New, cheaper countries take the same role which Indianized countries used to serve.

The direction is still mostly the other way around: work goes to India and Indians. I've heard recently about one testing department which started in India, and saw how people's work was moved there. New work was found for the Finnish emloyees. Also, I know several Indians who work for Finnish companies. The Indians get better wage and can enjoy Finnish freedom, safety and affluence.

Our company has a division in Bulgaria. The per-employee cost level is about 1/5 of Finland. They also say that when Indians want cheap programming labor, they subcontrant work to Vietnam/Thailand (don't remember which). Eastern Europe has done great economic progress after the fall of the iron curtain, so I hope and expect them to indianize quickly.

Here's what I've heard about the division of labor between offshore units and units which are local to customer. Basically, the communication-intensive and trust-intensive part of writing new software is done near the customer, where the subcontracting company(s) and the customers can sit around the same table and are immersed in the same culture. Testing and maintenance can be moved to offshore countries, because testing requires less communication and maintenance is less critical - after all, the is product by defintion "ready" when the maintenance part starts.

The politics of offshoring and the marginal employee

Basic microeconomics predicts that cheaper IT work means more IT work gets done. Customer companies get better systems for the same money, and they can afford to buy useful systems that would not have been implemented with first-world prices. Also, indianization is great for increasing the standard of living in less developed countries.

Offshoring is also a political threat, as the people in Western countries lose jobs as their work is moved to India. This also reduces the bargaining power and wages of the remaining emloyees.

By marginal employee I mean a Finnish emloyee who is just barely recruited to a company, because his or her skills are poor and/or track record is lacking. In the times of techno bubble in the 2000s, less was expected from the marginal employe. Many people studied a few years of computing science and then went to work. When the bubble burst, some of them got back to school to finish their degrees. A person in a student sauna commented that "sanity had been restored". This way, history has demonstrated the expectations for the marginal employee shift. Offshoring is a big threat for the marginal employee, because increasing the pool of workers means that more track record and skill can be expected from chosen workers.

Here are some predictions about political attitudes: Americans should be more concerned than Finns, because they have more to lose since the wage gap is wider. Seeing bidirectional subcontracting should reduce the fear of offshoring. Testers and less skilled programmers should be more concerned about offshoring and less sympathetic to the global advantages of indianization.

The big picture

Location: Tampere, Finland

I'm going to India for 5 months for an offshore assignment. The city will be Hyderabad in the state of Andhra Pradesh. Flight tickets have already been reserved, but details of living there have been left to tactical consideration.

This blog will document my confusion while learning to navigate in a new environment and answer to question "Mitä kuuluu?". The trip will be a new experience since I haven't travelled much before.

My job will be programming. Basically, there's a software house which is building a hybrid system which includes Symbian part. Since the software house doesn't have much Symbian experts, they're subcontracting them from my company. I expect the challenges of programming to be the one familiar element in the middle of new experiences.