India Going Places in Green Outsourcing
In outsourcing, and even otherwise, the world is rapidly getting used to phrases such as ‘green outsourcing’, ‘green jobs’, and ‘outsource green jobs’. Global concerns about climate change, and the urgent need to reinvigorate the global economy is generating massive demand for domestic and global outsourcing of green jobs. And already, most US companies are choosing to outsource to India than any other country.
For the layman new to ‘green economy’, a country or a company that wants to outsource or off shore renewable energy, waste management, and carbon management, is on its way to become ‘greener’.
The most definite push for green economies through green outsourcing came from US President Barack Obama. He recently said that, "A green, renewable-energy economy isn't some pie-in-the-sky, far-off future. It is now. It is creating jobs now."
World economies are expected to take America’s lead, after Obama’s $787 billion economic stimulus plan earmarked $70 billion for US’s green industry, and hence green outsourcing. Indeed, countries like Germany are well on their way to become ‘greener’.
Green investments are already showing results. According to the US outsourcing research company Brown-Wilson Group’s 2009 Green Outsourcing Report, since the beginning of 2009, 22,000 green technology jobs have been outsourced to India.
The report says that in India, “…New green jobs include higher dollar engineers, strategic business management and support technicians charged with designing innovative environmental friendly solutions.” At the current rate, adds the report, by the time five million green-collar jobs are created, outsourcing companies will outsource roughly one-fifth, and possibly even more, to India alone.
The report found that the outsourcing of green jobs is likely to continue. “We see the (green job off shoring) trend increasing as the US and the UK outsourcing buyers are seeking lower cost in labor and energy consumption. There are few suppliers who match credentials and outcomes of Indian firms,” the report said.
Major companies who outsource green jobs from the US are Xerox, Oracle, Hewlett-Packard, Accenture, IBM, and Perot Systems. And they outsource both blue-collar and white-collar jobs within green outsourcing.
Prior to Brown-Wilson’s report, in October 2008, several United Nations organizations together released a study titled 'Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World'. The study said that India can generate a phenomenal 900,000 jobs by 2025 in the area of biogas alone.
And after India’s success in IT and IT Enabled Services outsourcing, Indian outsourcing companies are gearing themselves for green outsourcing. Job fairs, portals, and university studies have sprung up in the country to cater to the rising demand in green outsourcing.
In India, most green jobs will come from managing natural resources such as water and land, and not just from deploying renewable energy like wind and solar power. Each of the 600,000 villages in the country will require a water and waste manager – that alone means 12,000,000 jobs.
And high-margin green business will be driven by the Indian corporate and civil sectors, which will outsource greening of infrastructure and business processes.
A fast growing economy like India, and the companies that are driving this growth, know that green credentials are important to ensure a competitive advantage.
Therefore, it makes sense for the US and India to be partners so that they can create a business environment to outsource green jobs. Consequently, in September 2009, executives from leading US clean energy and environmental companies visited India to identify commercial opportunities for clean and green US technologies in India.
US companies hope to outsource to Indian green outsourcing companies, which they want to help develop and deploy low-carbon technologies to combat climate change.
The US is also aware that under India’s National Action Plan, the government will deploy 15,000 megawatts of renewable power by 2012; 20,000 megawatts of solar power by 2020; and increase nuclear capacity to 40,000 megawatts by 2032. Green outsourcing will play a crucial role in implementing this plan.
And just like outsourcing, green outsourcing is now irreversible. Robert Pollin, a leading researcher on green jobs, says that the Obama administration wants to outsource the US and the world economy out of recession. "It's the first time the notion that investment in a clean-energy economy is connected officially in US’s government policy with the idea of job creation,” said Pollin.
Indian industry too is going green and will create demand for local outsourcing firms:
Today, Indian companies are more environment-friendly than ever before. Their managements are getting off the ground various green initiatives.
As a result, demand for 'green experts' - people trained in green technologies and environment specialists - has increased. Recognizing the need for green outsourcing, Indian companies today outsource development and launch of innovative green building products; renewable energy; and manufacturing and advisory services.
They also outsource setting up of material testing laboratories, new air-conditioning systems such as geothermal, wind towers, and tunnel air-conditioning.
The Director of The Climate Project-India, Gaurav Gupta, said in November 2009, that, "The recent trend in India is to incorporate the green mission in every sector of functioning. And to outsource work to people who are trained to work in these sectors for energy-preservation is catching on."
So it was not surprising then, that when India's first green jobs fair was held recently, it was a roaring success - with some 6,000 people and 27 outsourcing NGOs pitching their credentials for jobs and projects.
The Confederation of Indian Industry-Godrej Green Business Centre, an advisory body on eco-friendly initiatives, has observed that Indian companies are rapidly adopting green practices. Over the last eight years, CII has generated 6,000-7,000 positions based on the 'green job' concept. Green jobs worth $21.3 million have been created through green architecture, advisory services for corporates, energy simulation in buildings, and commissioning of buildings.
Software outsourcing giant Infosys was one of the first companies off the block to outsource green jobs. In 2007, it decided to outsource its green initiative to a team of six specialists, who understood energy leakages, and prepare a counter technology in order to shift from environment-compliance to environment leadership.
Green outsourcing will generate 10 basic types of jobs in India:
Local Indian companies will outsource green jobs to Indian companies and MNCs within India. Foreign companies, too, will outsource green jobs to Indian outsourcing firms in India, and to their offices abroad.
Of course, most jobs in green outsourcing will originate from Obama’s economic stimulus plan. A large proportion of this money, $40 billion, has been proposed for ‘green jobs’.
In the years to come, Indian outsourcing will witness US and other international governments and companies choosing India to outsource a variety of green jobs. Here's a list of green areas they will outsource.
- Advanced bio-fuels: Companies will outsource production of second generation bio-fuels (they emit 60 per cent less greenhouse gases) from non-food crops such as cornstalks or wheat straw, switch grass and municipal solid waste.
- Building retrofitting: Nearly every residential, commercial and public building in America wastes heat and energy. The US administration will outsource green-fitting 10 million homes every year until 2020.
Green outsourcing is likely to create six million jobs indirectly is this area, and American companies will outsource a large chunk of them to India.
- Geothermal energy: Geothermal hot spots produce a natural source of steam and hot water from aquifers heated by hot rocks underground, which can be harnessed to create energy. Experts say companies around the world will outsource about 20,000 indirect jobs to India related to geothermal energy.
- Green chemistry: Green chemistry is the design of chemical products and processes that reduce or eliminate the use or generation of hazardous substances. Companies will outsource such jobs to outsourcing companies employing green engineers, chemical engineers, and environmental chemists.
- Green manufacturing: Uses traditional manufacturing methods and factories to create new parts for green industries such as solar panels, energy efficient vehicles, and other green goods. Outsourcing of green manufacturing will generate millions of new jobs – many of which outsourcing companies will outsource to India.
- Smart grid: Countries around the world will be modernizing their electric transmission grids to save energy, reduce cost and increase reliability. The US has earmarked more than $11 billion for investments in a new ‘smart grid’. This is an outsourcing goldmine, and will definitely result in US firms to outsource ‘smart grid’ related jobs to Indian outsourcing companies.
- Solar energy: With tremendous pressure on non-renewable resources, outsourcing in solar energy will witness explosive growth around the world. India, which is a largely sunny country, is perfectly positioned - whenever companies, both local and foreign, outsource jobs to develop infrastructure to harness solar energy.
- Sustainable agriculture: Sustainable agriculture is a way of farming (like organic) that produces food indefinitely, without causing severe or irreversible damage. India’s burgeoning food needs will encourage the government to outsource development of organic farming.
- Sustainable green retailing: Sustainable green retailing is retrofitting an existing retail business to make available environment-friendly products and services. Outsourcing in this field is bound to be of high-volume - considering the rapid expansion in India’s retail sector. Indian companies themselves will outsource thousands of jobs in green retailing.
- Wind energy: Barring a few countries, most nations are not tapping wind energy for electricity. Green outsourcing of wind energy, in which companies will outsource to companies like Indian wind energy major Suzlon, is a rapidly rising green outsourcing industry.