With leading Australian telecommunication companies deciding to outsource jobs to India, concern has been expressed over information technology work moving offshore, a media report said on Tuesday.
There is outrage at IT development work moving to India because Australia fears loss of business if the market is opened to India, which is a complete opposite of a high-wage country like the United States, Australian-Indian Neville Roach, chairman of Fujitsu Australia and the Australia India Business Council, said.
Australian opposition Labour Party leader Mark Latham has also advocated a ban on offshore contracts by federal government departments.
On the hue and cry over jobs being outsourced to India because of low wages, Roach said: "Price is an important and probably the most obvious and initial driver but is unlikely to be the most important or strategic."
"The improved value proposition, combined with the availability of substantial skilled resources and reliable project management skills, enables the implementation of applications that might otherwise be too expensive and too risky," he told the Sydney Morning Herald.
Leading telecommunications and information services company Telstra has moved over 450 jobs to India in the past year and the, 'morale was lower than zero,' the daily quoted an IT professional as saying.
On being asked how Indian companies will tackle China's entry to the marketplace, Roach told the daily that wage escalation may make India vulnerable to competition from China, Russia and Eastern Europe.
However, its massive population and the huge annual additions to its ICT workforce will ensure that India will remain competitive.
"The leading Indian companies are also conscious of the inevitable growth of global competition and are surprisingly confident that they can respond successfully."
"They are rapidly changing the use of their highly skilled resources towards the upper end of the value chain and are beginning to offshore work themselves," he told the daily.
He said: "If Australian workers want to continue to earn higher wages than those in India, China and Russia, they will have to develop higher-value skills, such as complex systems design and project management -- including projects that involve global sourcing and deployment."
Gary Ebeyan, Managing Director of Infosys Technologies Australia who sold his company, Expert Information Services, to Infosys, told the paper that his company was not undercutting local pay rates.
The Department of Foreign Affairs and Trade estimates that Australian organisations imported $2.7 billion of IT services last year, compared to $2.3 billion that were exported.
"Labour costs in India are about half Australian rates and a fifth of the US, making India a natural place to exploit labour arbitrage, but outsourcing is a two-way street," opined industry analyst Gartner's research vice-president for IT services, Ralph Jester.