Friday, November 13, 2009

A rural corner of India gets a slice of the outsourcing boom

The headline from today's New York Times is "Rural India Gets Chance at Piece of Jobs Boom," and in it Lydia Polgreen tells of an experiment by some Indian entrepreneurs to give remote parts of the country an opportunity to share in the economic boom that has been largely limited to urban areas. The company, Rural Shores, says taking jobs to where the people are makes more sense than increasing rural-to-urban migration. About 70% of India's population live in rural areas.

Here's an excerpt from Polgreen's story:

India largely skipped — or never arrived at — the industrial phase of development that might have pulled the rural masses to cities. Over the decades a Gandhian fondness for — some say idealization of — rural life has also kept people in villages, where the bonds of caste and custom remain strong.

* * *

Rural India was once seen as a dead weight on the Indian economy, a bastion of backwardness embodied by the frequent suicides of farmers eking out livings from arid fields, dependent upon fickle monsoons. But Indian and foreign companies have come to see India’s backwaters differently, as an untapped market for relatively inexpensive goods like low-tech cellphones, kitchen gadgets and cheap motorcycles.

Perhaps Rural Shores' business model was inevitable: turning to highly motivated rural workers who are content to earn less than their urban counterparts. In this case, rural workers often earn less than half of the $150/month that similar work pays in Bangalore. In short, rural workers tend to be content with the minimum wage, which is about $60/month. Rents are are also lower in rural areas.

The company currently has just three rural work centers, but it plans to open 500 across India in the next several years.

To view the photos that accompany the story, click here.

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