Causes of financial problems in America, the US Part 2
Internet and knowledge based economy
I have already discussed some of the apparent causes of economic crisis and financial problems of America that tends to a recession. It was in my earlier article
Now I would like to discuss role of Internet in American economy. You can see how it has changed both American and global economic scenario.
Internet has changed the whole technological aspect of the world. This technology has turned business and economic scenario of twenty first century. Eighteenth, nineteenth and twentieth centuries were an industrial era but certainly the twenty first is not.
This is an information age. We have entered into knowledge based economy. Natural resources and technological developments were in the driving seat of economic development since past three centuries. However, the present days are different. Future will also act in different manner.
Knowledge, knowledge and knowledge only will be everything. All financial and other resources will flow towards knowledge. He who has knowledge will survive. People with updated knowledge will emerge as the winner, says C K Prahlad, top management Guru..
Internet has provided opportunity to get information ready hand. and knowledge is now accessible to all. In fact, it has democratized accessibility of knowledge. Internet has broken barriers of the borders between countries. It is now truly globalized.
Affect of outsourcing via internet
The US was pioneer in the information technology and Internet. Most of the Internet service providers (ISP) were and are from America. Until recent past, America was No.1 among net users. All these provided America and the Americans with an upper hand in technology, knowledge and thus in the economy. If we look into the business and trade scenario of last two decades, we find that Internet, computer hardware and software directly or indirectly had a lion's share in the American economy.
Bill Gates of Microsoft emerged as the richest man in the world during these days and remained in the position for a long time. Google, MSN and Yahoo along with Amazon and E-bay could manage to play a major role in economic development in America during last few years. Likes of Apple and IBM corporations have also played their role in boosting American economy.
Though Google is yet flourishing Yahoo and MSN are losing their grounds in web based businesses. Amazon is not doing so well now. Bill gates of Microsoft is no longer No.1.
(Updates: Yahoo and MSN are now trying to join their hands with each other. An application of merger is pending with the US authorities.)
BPO Center, Patni Noida Building
Situation is now turned. Emerging economies of Asia such as India and China have found their places in the present global economy. Silicon valley cannot move without Indian IT professionals. Moreover, American corporate sectors outsource a lot of business to India and other Asian countries. They are now able to delegate much of their business to call centers of India and other Asian countries. It is much cheaper to get the work done elsewhere than to in America. Though the American corporations are earning much and maintain their growth, common Americans are suffering from job losses.
Corporations are regularly down sizing in the US. They are more and more depending on BPO (Business process outsourcing) and KPO ( Knowledge process outsourcing). Medical transcription outsourcing has transferred thousands of jobs from the US to India. Microsoft and Google have established their offices in India. Merrill Lynch, Franklin Templeton, City Bank and many other financial service providers also find their way to Hyderabad and Bangaluru in India. American banks and credit card companies have started keeping their Customer accounts in India. Hospitals are getting their medical transcriptions there. A lot of research works and legal formalities have also been out sourced to Indian companies. Internet has made all these possible.
Dow Jones investors are now able to trade online in Hong Kong, Shanghai and Bombay Stock Exchanges, Indian stock market is doing much better than American market.
Impact of outsourcing on American economy
Internet and emerging economies
The US has a strict visa policy especially for the citizens of the third world countries. It is very difficult to get an American visa for a common Indian or Vietnamese. However, internet facilities reduced the need to enter into America in search of a job. They can get an outsourced American job living in their own country. Some times they can do it even staying in their homes.
Internet has also revealed secrets of the developed countries. They are now exposed to other nations. In present days, it is not an easy task for America or other developed countries to manipulate situation in their favor.
The emerging economies such as India, China, Brazil, Russia, Philippines and Malaysia should be grateful to Internet. They can flourish their economy with the help of Internet. India has used Internet to import jobs outsourced from US, UKand other developed nations.
Cheaper broadband service in India helps in keeping (outsourced services) costs low. Though imported, Indian broadband service is much cheaper than that of America. A 24x7 service is available for mere $ 6 per month. Broadband service users in India are increasing by leaps and bounce. Indians are very good in communication skills and trained in information technologies.
Internet in China
Will Americans think?
China has surpassed in the number of Internet connections in America last month. Can one imagine what can China do with its large population of more than a billion i.e. six to seven times of America? India also has growing number of internet users.
Philippines, Indonesia, Brazil...and many other countries are in the row. Where as disgusted American citizens are staking on some meager income from ad sense or so. Increasing number of US citizens are trying to write in hub pages or in some similar sites to have some income from ad sense. Do you think that income from ad sense can solve their problems?
America has brought revolution by inventing and pioneering information technology. it has supported its economy for two decades. Now internet is acting as a boomerang for America and American economy. American money is flowing out and Internet is playing a major role in the same. It is causing large numbers of job losses in the US. In turn it will bring down American economy.
Booming Sensex and plunging Dow Jones are telling us the story. You can see how Indian stock market is performing much better than the US.
Will Americans think?
N.B. You can feel free to comment on this hub. Debate on the topic is welcome. If you feel that the article is helpful please book mark it to any social networking sites. You can also mail it to your friends and family who may find it useful. Thanks,
America Inc, Outsourced to India
Links to finance and economy articles
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- Financial crisis in America : What are the root causes of economic problems?
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