Sunday, July 11, 2004

Outsourcing Comes to Africa

Great piece in the Canadian press about how outsourcing is bringing jobs to West Africa.

Affiliated Computer Services of Texas has become one of Ghana's largest private employers. Almost 2,000 employees process U.S. health insurance claims around the clock. Senegal's political stability, low wages, infrastructure, and stock of young and educated employees is drawing French companies (which currently only outsource 2% of their work) to the country. At call centers, people have French pseudonyms and fake Parisian accents when speaking with French customers.

While still a small trend, it is a growing and good one. African college graduates have access to jobs that pay $200-$500 per week, in countries where most people don't make this money in a year. It expands the consumer markets in these countries, which can help countries like USA. Companies get qualified workers for lower costs, which will increase jobs for Africa. Countries like USA can then focus our energies on sectors where we have a competitive advantage - which is innovation. Of course, French unions are getting nervous - which is why France's economy will continue to stagnate while others grow, because it doesn't focus on what the French do best at the lowest cost.

There could be political implications for West Africa. A growing middle class increasingly demands accountability from leaders, which helps democracy and civil society. They are likelier to fight against incursions on their freedom. I hope this trend spreads to other parts of Africa.


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