How Long Until Africa is the Next India (with respect to offshore IT)

While I was in India I started to wonder when and where big corporations would take their businesses next in their on-going and global quest to increase revenues and exploit cheap skilled labor. Africa is the next obvious choice after India and China.

The cost of skilled labor has been going up around 15% year in India. The cost of land and labor is only increasing currently as demand by global businesses increases. As businesses in the high technology sector open doors and employ more Indians in skilled jobs, India's middle class grows and western ideas, fashions and expectations about salary and material comforts take hold in people's minds. Competition increases for good employees. Right now, India's job market in IT is very strong, very good for job hunters. India in particular has enticed foreign companies to set up shop there (Hyderabad, Andhra Pradesh being a prime example) by giving away land and tax breaks. But those benefits don't and won't last forever as foreign companies become more invested and dependent and are expected to contribute (taxes), sooner or later, as whatever "jobs for land" or other deals they cut when getting in the door come to maturity.

Africa seems like the obvious next choice. It's a huge continent with a lot of resources and potential, including, eventually, cheap skilled labor of the sort that has caused a Hi Tech boom in India the past several years. When I was in Frankfurt's airport (a major hub for international flights) on a layover between India and the US I had interesting conversations with several people as I drank some Feni (cashew liquor) from Goa that had been gifted to me in India but that western travel restrictions prohibited me from carrying past Frankfurt. Two of the people I talked with were returning from business in Africa. One of them, a Portuguese in his 60s, said to me that Africa was "like a woman with no panties," ripe for the taking. Africa has almost a billion people and some 46 countries. It's huge, it's there, it's inevitable. Send me, I'll go, I'm ready. ;-)

A news article about Kenya's recent post-election riots caught my eye tonight and prompted me to write this, which had been on my mind for a while. This quote from the end of the brief article is interesting because it makes an observation about Africa progressing (a huge generalization, I know) in some telling ways:

"This is Africa," many people have told me, Africans and non-Africans. But what they overlook is that this nation blew up so much precisely because Africa is changing. Ten years ago, bolstering a candidate's results by a few percentage points would have been no big thing. In fact, 20 years ago, an 85% result for the incumbent would have been de rigueur. Today, there are more stringent regulations; more Kenyans know their rights; more monitors were at the polls; Kenya's media coverage was extensive; digital media are accelerating the distribution of information; and many people have cellphones with which they can pass on information.