THE next wave of globalization has begun gathering momentum and the predictions are that it may in the long run end up in reshaping the global economy. It is the massive global job shift that has triggered the new wave.

Hundreds of thousands of jobs in the North are being exported to the South in an unprecedentedly frenzied manner to maximize profits by cutting costs in terms of wages, in cases even by half, by the corporate sector.

The first wave of globalization started two decades ago with offshore transfer of manufacturing jobs such as making of shoes, cheap electronics and toys to developing countries. Then came shifting of simple online jobs like processing credit cards receipts, writing software codes etc. The second wave came in the 1990s when corporate America had to import hundreds of thousands of talented immigrants from less developed nations such as India and China to overcome manpower shortages in engineering and IT sectors. As a result, the new breed of brainpower of non-West origin was able to create a place for itself in the so-called knowledge economy by steering the technology revolution in the United States and Europe.

Now, the media reports say, there is an explosion of work overseas. All kinds of knowledge work, even basic research, chip design and financial analysis, can be done in the Third world countries. And without compromising the desired quality. Hence, rush for sending jobs abroad. The countries benefiting the most from this wave of globalization are India, China, the Philippines and Malaysia. But others are also joining the fray to claim a share in the windfall. One thing peculiar and common among them is a surplus pool of IT and engineering graduates at home. Newcomers are East European countries like Hungary, Romania, Bulgaria and even Russia, and South Africa and some Latin American countries. Pakistan does not figure in any media report as a potential beneficiary of the new trend and, if at all, it may not get more than a negligent share in the jobs that are worth billions of dollars.

According to a recent study done by Forrester Research Inc., at least 3.3 million white-collar jobs worth $136 billion will shift from the United States alone to low-cost countries by 2015. But another survey carried out by Deloitte Consulting says that two million jobs carrying wages worth $250 billion could be shifted from both Europe and America over the next five years. Of late, Europe has joined the trend in full force. British banks like the HSBC have huge back offices, which it calls global service centres, in China, India and Malaysia moving about 4,000 jobs there. French companies are using call centres in Mauritius and German multinationals like Siemens are hiring educated workforce in Russia, Baltic States and other East European countries.

The new phenomenon is being described as a blessing for the developing countries. But what it can mean to the West and its middle class citizens is not clear. Can the bureaucracies in the US and Europe reconcile with the coming great loss of jobs to its workforce at a time when unemployment is already setting new records? And what about the impending clash of interests between the corporate sector and the political establishment of the West? Maybe, it is too early to discuss the implications.

George Monbiot of The Guardian in one of his recent columns has described these jobs as the ones “we (British colonialists) stole 200 years ago” and are now “returning to India”. In an apologetic vein, by drawing upon his country’s colonial history, he says: “Britain’s industrialization was secured by destroying the manufacturing capacity of India... So a historical restitution appears to be taking place as hundreds of thousands of jobs, many of them good ones, flee to the economy we ruined”. But it is not because of the historic injustices the West did to Asia that corporate giants are willing to offer too many jobs to Indians as a compensation so as to settle the old score. It is the naked lust for profits that is whipping up the new trend.

The Businessweek, a prestigious American magazine, ran a cover story on the subject recently. It has raised some pertinent questions about likely consequences of the current job exodus. It quotes a Harvard University economist Robert Z. Lawrence, a prominent free-trade advocate, saying, “I still have faith that globalization will make us better off, but it is no more than faith.” If the global job shift really hits American workers, that could reshape the globalization debate. Until now, it was presumed that it was the blue-collar worker of the Third World who is to suffer from the adverse impact of free trade and globalization and none else. But if such an impact means wider unemployment and new economic woes, one may see opposition to free trade in a country which happens to be its Mecca.

But the trend, it seems, has come to stay and cannot be reversed. The driving forces behind the new trend are digitization, internet and high-speed data networks. That enables the tasks like preparing architectural blueprints and a company’s financial analysis or designing new microprocessor to be easily done anywhere and at much less costs. It is because of this reason that IT giants like Intel and Texas Instruments are hiring Indian and Chinese engineers to design chip circuits. Dutch multinational Phillips has shifted its research work on TV, cell phones and audio products to Shanghai. Brokerages like Lehman Brothers are using Indian analysts for writing company reports. Hewlett-Packard has, at present, 3,300 software engineers in India.

The most sought-after country for all kinds of knowledge work is, of course, India. It has some 7,500 chip designers working for 65 companies and they are increasing by 20 per cent every year. They get salaries worth 8,000 to 10,000 dollars a year. Bangalore seems destined to become a great innovation centre of the 21st century. India’s National Association of Software and Services Companies (Nasscom) says the country’s IT-enabled services grew by 70 per cent during 2001-2002 to produce a total of $1.46 billion in revenue. And it may get up to $16.94 billion by 2008. Jobs in this field are expected to rise from 100,000 to 1.1 million by that period.

Microsoft chairman Bill Gates recently announced that his company will invest $400 million in India over the next three years. It hires ten Indian software engineers every month. Hyderabad (India) is key to Microsoft’s push into business software. The company is already spending $750 million over three years on research outsourcing in China. At its Beijing research laboratories, one third of 180 programmers are PhDs from the US universities.

According to the Businessweek, what makes this trend viable is the “explosion of college graduates in low-wage nations.” For instance, in the Philippines which produces 380,000 graduates every year, there is an excess of accountants trained in the US. India has 520,000 IT engineers. While US colleges produce 35,000 mechanical engineers, China graduates twice as many. The unprecedented hiring binge in Asia, East Europe and Latin America comes at a time when companies from Wall Street to Silicon Valley are downsizing at home. In Silicon Valley, employment in IT sector is down by 20 per cent since early 2001.

But corporate America seems to have already become comfortable by hiring outside companies to handle everything from product design to employee benefits. Now, American Express, Dell Computer, Eastman Kodak can offer round-the-clock customer care while keeping costs in check. (Wipro coaches staff of offshore companies on how to speak American English). It is a fact that in the US labs of Intel and IBM the immigrant Asian engineers have always played a prominent but hidden role. The only difference is that Indian and Chinese engineers are now managing the same work in their home countries.