Going abroad for tech services

A call may be answered halfway around the world

Western technology firms are increasingly choosing to outsource services such as call centres and software development to the developing world. BBC News Online's Jane Wakefield looks at who is benefiting from this trend in globalisation.

Anti-globalisation protesters have long argued that using labour in the developing world is exploitative.

The cheap cost of employees in countries like India and the Philippines is a big incentive to technology firms desperate to cut costs.

US-based customer support provider CyLynx admits that cost was the most important issue when deciding to locate its operations in the Philippines.

Demos against globalisations are common

"Put simply, the cost benefits of setting up remote or shared services centres in the Philippines are enormous," reads a company report.

This price saving does not necessarily mean that workers are being exploited, argues Douglas Lavin, a management consultant at Inductis.

His firm helps Western companies import services from the developing world.

He believes that the employment opportunities bring positive benefits to poorer economies.

"There is something intriguing about having your request handled half way round the world," he told the BBC programme, Go Digital.

Conditions vary

Call centres in the Western world have often been described as the hi-tech equivalent of 19th century factories raising questions about conditions in much poorer countries.

"They are definitely not sweatshops," says Mr Lavin.

"US and European companies are investing a lot of money in training and they want to hold on to staff."

He admits that this is the ideal scenario, but with plenty of local entrepreneurs setting up outsourced businesses to make a quick buck, it is by no means the norm.

Dangers to local economy

Computer consultant Bill Thompson is concerned that the global village created by outsourcing skills is creating a very one-sided economy.

"There is an obvious danger to local industry. If you build up call centres to serve the West, you are creating a local economy that is entirely dependent on the export market,"

We consider call centres in the Third World to be exploitative.

Keith Griffiths, CWU

"When the Western companies go out of business or change their business practices you are trapped. Local entrepreneurs need to serve local needs as well as the global economy," he said.

Wages in outsourced jobs can be significantly less than those in the West.

A graduate leaving one of the top universities in Manila and joining a US technology firm can expect to be paid around $275, a fraction of what an American employee can expect for the same job.

Unions oppose outsourcing

For employees in the West, outsourcing also means a loss of jobs.

"People ask me 'aren't you destroying US jobs?' All tech improvements destroy some jobs and replace them with higher productivity," argues Mr Lavin.

In the UK, the Communication Workers' Union recently won a battle with telecoms giant BT to end the outsourcing of call centres to India.

"We had a large surplus of workers in the UK and so it was nonsensical to outsource," explains national officer of the CWU Keith Griffiths.

BT has now returned its call centres to the UK and pledged not to outsource in future.

"We consider call centres in the Third World to be exploitative. They have lower rates of pay and terms and conditions that wouldn't be considered appropriate in the UK," says Mr Griffiths.