India outsourcing moves to front office

via International Herald Tribune:

While call centers and software houses closed in the West, often leaving their workers scrounging for employment, professionals in fields like aeronautical engineering, investment banking and drug research likely believed they had nothing to worry about.

Quietly, but steadily, that is changing. High-skilled jobs in those very fields, which once epitomized the competitiveness of Western economies, are flowing to India. The pool of jobs once thought to be impossible to outsource is gradually evaporating.

And with multinationals employing tens of thousands of Indians, some are beginning to treat the country like a second headquarters, sending senior executives with global responsibilities to work from India.

Cisco Systems, a maker of communications equipment, has mandated that 20 percent of its top talent be in India within five years.

N. R. Narayana Murthy, chairman of Infosys, an Indian outsourcing company, said Western multinationals were entering a world in which they would conceptualize, develop, manufacture and sell products and services, from start to finish, outside their countries of origin.

A few years ago, the work sent to India consisted mostly of $100,000-a-year-or-less jobs in software maintenance or $50,000-a-year-or-less jobs in customer service, said Atul Vashistha, who runs neoIT, a consulting firm in California that advises U.S. companies on outsourcing. Now, outsourced jobs include elite positions that pay $200,000 a year or more in the West, he said.

"The definition of what is core is shrinking and may not even be relevant," said Dennis McGuire, the chairman of TPI, a consultancy in Texas that advises multinational companies like Pfizer and Motorola on outsourcing.