Saturday, November 26, 2005

Outsourcing 2: Amoral force that respects no borders

What is remarkable is that outsourcing emerged when Philippine politics was its most volatile. President Gloria Macapagal-Arroyo came to power in 2001 after the administration of Joseph Estrada collapsed amidst accusations of corruption and involvement in an illegal numbers game. After she was declared winner in the 2004 election, Arroyo’s government soon suffered ignominy after a taped conversation seems to indicate that she might have cheated in the election. Until now, she continues to suffer from the continuing questions of her government’s legitimacy. In all these years, BPO has been growing at about 70 percent each year. It’s a kind of growth, industry analysts say, that even India did not experience on the way to the top of the global outsourcing chain. And the fun, many in the industry seem to think, has just begun.

What do these trends imply? On one hand, globalization—or that ability of companies and persons to shift operations or transfer jobs worldwide where the returns are higher and risks lower—is certainly behind this trend. It’s an amoral force that neither respects physical borders nor political systems, courtesy of Moore’s Law and the digital revolution. On the other, this trend may indicate that, to some extent, the Philippine economy seems to have developed some resistance to the pernicious effects of the country’s rambunctious politics. The BPO business therefore dramatically grew—not because—but despite of, the nature of the Philippine State. Its something that the current administration could not claim as the fruits of its own labors.

If there’s one that should claim credit, it should be the Presidency of Corazon Aquino whose cabinet members then—most of whom were baked in the free-market/Thatcherite ideals of the 80s—initiated wide ranging reforms including the demonopolization of telecommunications and other segments of the economy. Those reforms were not completely successful but the momentum for change continued during the Ramos time until the present. However, the greater glory should go to the new apolitical post-Edsa Revolt generation whose insatiable cravings for the magical worlds of Ragnarok, Friendster, and the other wonders of instant communication ushered in the wonderful technologies that make all those outsourcing businesses possible. As one cyber expert would put it: “It’s a classic case of content ushering in the technology.” (To be continued)

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