For years, the Indian call center has been the ultimate globalization cliché. The armies of young, overeducated Indians providing round-the-clock tech support and customer service have turned up in dime-store novels in Mumbai, sitcoms in the United States, and blockbuster films like Slumdog Millionaire. But India may not be the king of the call center for much longer.
In fact, as of this year, more Filipinos than Indians now work in call centers. Operating costs in the Philippines are cheaper, and some U.S. executives say American customers find Filipinos' speech easier to understand than the British-inflected English spoken by Indians. Companies including AT&T, JPMorgan Chase, and Expedia have all hired call centers in outsourcing's emerging power.
Brazil, Mexico, Vietnam, and several Eastern European countries are also cutting into India's market share of the outsourcing sector, which according to some estimates has fallen from more than 80 percent to around 60 percent. India's lead appears secure in some types of outsourcing -- software coding, for instance -- but the signs for the future do not bode well. Outsourcing giant Infosys cut its hiring from 45,000 last year to 35,000 this year, and Tata Consultancy Services cut its recruitment by 20,000.
India's masses of educated, English-speaking workers once gave the country an edge, but analysts say the outsourcing market has become saturated in the subcontinent even as other countries have figured out how to compete. Ironically, one possible area of growth for the industry may be shipping jobs back to the United States: India's Aegis, for one, this year announced plans to hire 1,000 new workers at a call center outside Dallas as part of a pledge to add more than 4,000 new American workers. It may turn out that the companies that figure out how to stop "shipping American jobs overseas" are Indian.
THE INSOURCERS Meet the companies bringing jobs back to America. Caterpillar The construction-equipment manufacturer is building a plant in Athens, Georgia, that will employ 1,400 and produce small tractors and excavators. The equipment had previously been built in Sagami, Japan, but Caterpillar said the Athens factory was a "strategic decision" to move closer to the majority of its customers who use the machines. Master Lock The Wisconsin company was highlighted in this year's State of the Union address and got a visit from President Barack Obama himself in February. Master Lock has moved about 100 jobs from China back to its plant outside Milwaukee, which is now running at capacity for the first time in 15 years. General Motors Indian information-technology vendors were stunned when GM Chief Information Officer Randy Mott told InformationWeek he wants to overhaul how his company does IT work over the next three years. GM currently outsources about 90 percent of its IT functions; Mott said he wants that number to be in-house, and he plans to hire software developers, database experts, and other IT professionals in the United States. Starbucks When the ubiquitous Seattle-based coffee maker went looking for a supplier to produce 20,000 coffee mugs, it turned to American Mug and Stein in East Liverpool, Ohio, known as the "Pottery Capital of the World." The contract is part of the company's "Create Jobs for USA" initiative. Starbucks also announced this year that it will build a factory in Augusta, Georgia, to help make instant coffee and the ingredients for its Frappuccino drinks. —Alicia P.Q. Wittmeyer
ROMEO GACAD/AFP/Getty Images