Economic Geography

Digitizing services
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to its Indian affiliate, Tata Consultancy Services, that it transfer some Indian soft-
ware engineers to the United States to install software. This was the genesis of
‘body shopping’ (Heeks 1996). Gradually, these Indian firms shifted to an offshore
model where they would do the coding in India. Roughly contemporaneously 
in 1986 a group of American multi-national corporations (MNCs) led by Texas
Instruments began doing software development work in Bangalore after the
government guaranteed them satellite bandwidth. Very soon, these MNCs
discovered that Indians were extremely capable particularly in areas like algorithm
development. In the 1990s, some of the world’s largest financial institutions such
as Citicorp, American Express, and General Electric Capital Corporation also
established software development operations in India. General Electric and a
number of other major medical imaging firms located sales, marketing, then
production, and finally R&D operations in India because of the large market for
fetal imaging. For a number of reasons, MNCs became increasingly acquainted
with the capabilities of Indian workers.
The 1990s were a tumultuous period in American capitalism as it experienced
the largest stock market bubble since the 1920s. The core of the bubble was tech-
nology, communications, and, most centrally, the Internet. Given the massive
databases, website development, and other chores that came with the feverish
panic to create an online presence, there was a belief that the developed nations
were running out of software programmers. To remedy these perceived shortages,
foreign programmers were welcomed into the United States even as firms became
increasingly willing to offshore development work to lower-cost environments.
Increasingly, the objects of white-collar work, for example, papers, data, files,
and images, were digitized or could be scanned and made digital. Though not
immediately obvious, what this meant is that the information within these items
was being dematerialized. Even as existing information was digitized, there was
a proliferation of sensors, processors etc. that were creating an even larger sea of
information to be processed and interpreted. Finally, this information could, in
principle, be transferred to any location having two wires – one for electricity and
the other carrying communications.
White-collar work was increasingly undertaken on digitized images on a
screen. Previously a business process such as filing, researching and adjudicating
an insurance claim triggered a set of actions that moved pieces of paper from one
office to the next downstream to final resolution; very often generating yet more
paper as it moved. Moving these papers a long distance was almost impossible in
terms of prohibitive costs, risks of misplacement, and delays. These barriers
entirely disappeared once the information was digitized; now the information
could flow at the speed of electrons.
How deep the offshoring process will be is inherently unknowable. Consider the
promise of telemedicine. If, through the use of cameras and telecommunications
linkages, a doctor in an urban medical center can remotely diagnose a person 
in a rural American farm community, then the doctor can just as easily be in New
Delhi or Buenos Aires. For example, in diagnostic endoscopy the doctor uses 
a digital image for guidance, why does the doctor have to be located in the
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surgery? Why not in a room across the street or anywhere else in the world
equipped with high-speed Internet access? Often, these technical possibilities
must be coupled with social innovations. These new technologies do not presage
the replacement of all doctors, but, more probably, a reengineering of what the
spatial and hierarchical division of labor should be. Already, x-ray and other medical
images are interpreted in India for the American market. This illustration suggests
that the geographical division of labor of this and many other production processes
is likely to become increasingly complex.
The medical example suggests something even more interesting, namely that
well-paying occupations in which high levels of discretion and skill are required,
and thus have normally been considered immune to global competition may, at
least, partially be in the process of becoming vulnerable to relocation.
Geographers interested in labor process questions could provide important insight
into how this will develop.