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Blair Defends Outsourcing Work to Others By RAJESH MAHAPATRA, Associated Press Writer
Wed Sep 7,10:38 AM ET
British Prime Minister Tony Blair on Wednesday defended European companies that outsource work to low-wage countries like India, saying it helps the firms become more competitive and in the process enriches Europe.
Global companies have increasingly farmed out any task that can be done over a computer network to low-wage countries. India is the undisputed king of the business with 44 percent of the market for outsourced work and revenues of $17.2 billion last year.
The moves have led to layoffs in Europe, angering many trade unions and fueling opposition to outsourcing.
But Blair told Indian and European business leaders that outsourcing has helped Europe as well.
"Companies have used relocation of call centers and used outsourcing in order to build a more effective structure," he said. That benefits not just "the places to which the work is outsourced but also the companies and people in the UK and Europe."
Blair made the comments as he pushed for increasing opening of economies by governments of India and European countries at an annual India-EU business summit.
Britain's Trade and Industry Minister Alan Johnson doled out evidence to support Blair's comments.
He gave the example of LogicaCMG, a British-Dutch information technology company, which recently won a contract to build Real Time Gross Settlement systems for India's central bank. Several years ago, LogicaCMG shifted some of its work to Bangalore, India's technology hub, where it now employs nearly 2,000 engineers. Johnson argued the company would not have won the central bank deal without its base in Bangalore.
Copied below :
Blair Defends Outsourcing Work to Others By RAJESH MAHAPATRA, Associated Press Writer
Wed Sep 7,10:38 AM ET
British Prime Minister Tony Blair on Wednesday defended European companies that outsource work to low-wage countries like India, saying it helps the firms become more competitive and in the process enriches Europe.
Global companies have increasingly farmed out any task that can be done over a computer network to low-wage countries. India is the undisputed king of the business with 44 percent of the market for outsourced work and revenues of $17.2 billion last year.
The moves have led to layoffs in Europe, angering many trade unions and fueling opposition to outsourcing.
But Blair told Indian and European business leaders that outsourcing has helped Europe as well.
"Companies have used relocation of call centers and used outsourcing in order to build a more effective structure," he said. That benefits not just "the places to which the work is outsourced but also the companies and people in the UK and Europe."
Blair made the comments as he pushed for increasing opening of economies by governments of India and European countries at an annual India-EU business summit.
Britain's Trade and Industry Minister Alan Johnson doled out evidence to support Blair's comments.
He gave the example of LogicaCMG, a British-Dutch information technology company, which recently won a contract to build Real Time Gross Settlement systems for India's central bank. Several years ago, LogicaCMG shifted some of its work to Bangalore, India's technology hub, where it now employs nearly 2,000 engineers. Johnson argued the company would not have won the central bank deal without its base in Bangalore.
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