Global "Body Shopping": An Indian Labor System in the Information Technology Industry [NOOK Book]

Global "Body Shopping"

An Indian Labor System in the Information Technology Industry

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By Xiang Biao

Princeton University Press

Copyright © 2006 Princeton University Press
All right reserved.
ISBN: 978-0-691-11852-9

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Introduction

This ethnography is about embeddedness and disembeddedness-about how new human connections and disconnections are created and ultimately contribute to a process of abstraction in global capitalism today.

Consider the following. Flying in the face of an industry projection of a labor shortage of 850,000 in the information-technology sector in the United States for the year 2001, the first eight months of that year saw more than 350,000 high-tech workers, mostly in IT, laid off, a figure climbing to 600,000 by November. And in another twist, the period 1998-2000 found delegations from more than twenty countries coming to India to recruit IT workers, but in May 2001, some 50,000 Indian "computer whiz-kids" in the United States were reportedly jobless. These scenarios immediately prompt at least two questions: How is skilled labor managed internationally to serve an extremely volatile global IT market? And what are the experiences of these skilled migrants in the so-called New Economy, where "risk, uncertainty, and constant change are the rule, rather than the exception" (Atkinson and Court 1998, 8)? These concerns impinging on the livelihood of overwhelming numbers of migrant workers alsounderscore the relevance of a more general area for critical inquiry, namely: How are social relationships being restructured in response to economic globalization?

This book presents a configuration of the India-based, global labor-management system in the IT industry known as "body shopping," focusing specifically on its operations through Hyderabad, India, and in Sydney. Spanning the period 2000-2001 that immediately followed the frenzied demand for "Y2K" software fixes worldwide (to prevent computer systems from mistaking the year 2000-coded as "00"-for 1900), my narrative traces how this volatile global industry is constructed through concrete human relationships. My study gives centrality to labor-a much neglected or even deliberately omitted dimension in public discourse about the New Economy and its crucial underpinning IT-and shows how global high-tech hubs, such as the iconic "Silicon Valley" of Palo Alto in northern California, are intimately connected to women and children in rural India through the processes of IT labor production and surplus appropriation. Thus, this account constitutes a "global ethnography" not just in the sense of documenting how people behave transnationally, but also in clarifying how different regions of the world are related to each other institutionally and structurally.

Related to this perspective, the current round of economic globalization, which started in the 1970s, is understood as a continuation of a process of abstraction that has been central to the evolution of capitalism. Undeniably, the process of abstraction whereby markets disembed from familial, religious, and communal relationships to become an autonomous and dominant social force has gathered considerable momentum since the 1970s. The flexibilization of the labor market, economic deregulation and decentralization, and the globalization of financial markets with the revolution in IT, in particular, have significantly freed the market from tangible social relations and from the primary institution managing public life, the nation-state. The bewildering abstraction in the global New Economy is well portrayed by Castells (1996, 474) as:

ultimately dependent upon the nonhuman capitalistic logic of an electronically operated, random processing of information. It is indeed capitalism in its pure expression of the endless search for money by money through the production of commodities by commodities. But money has become almost entirely independent from production, including production of services, by escaping into the networks of higher-order electronic interactions barely understood by its managers. While capitalism still rules, capitalists ... prosper as appendixes to a mighty whirlwind which manifests its will by spread points and futures options ratings in the global flashes of computer screens.

Besides the abstraction of economic practice, there is the conceptual abstraction resulting from the ascendance of formal economics (and its professionalisms) both in the social sciences and in public discourse (Polanyi 1957b; see also Carrier 1998a). Neoclassical economic thinking has become so pervasive in the real world that "virtualism," as Carrier and his associates (1998) argued, has become a de facto feature of economic life. Policy-making and economic regulation increasingly conform to abstract, mathematically derived, and virtual (presumed universal) economic "laws" rather than responding to observations of the ground realities-actual people's real needs. Institutions such as the World Bank, the International Monetary Fund, and the mushrooming master of business administration (MBA) courses worldwide have been the backbone of this process of (professionalized) abstraction. Neoliberal thinkers no longer need worry that their prognostications are criticized as ignoring stark ground realities- they are inventing a new one.

Yet, despite the powerful trends of abstraction and virtualism in economic practice and thinking, anthropologists have primarily been trying to make sense of the world by emphasizing "embeddedness," focusing on how economic activities, no matter how abstract and global, still depend on and are still shaped by concrete human connections (e.g., Eriksen 2003). For example, in studies of transnational migration-an important dimension of globalization-much of the existing anthropological and sociological literature has explained it centrally by the existence of "networks" in which migratory flows are said to embed (Boyd 1989; Brettell 2000; Moretti 1999; Portes 1995; Tilly 1990; Zahniser 1999; for a recent critical review, see Krissman 2005). Indeed, according to Douglas Massey (1990; 1994; Massey et al., 1987; Massey et al., 1993; Massey et al., 1994), one of the defining figures in migration research of the last two decades, migration is so strongly embedded in and determined by networks that it would become progressively independent of the original macro-socioeconomic causes and eventually come to a stage of autonomous existence. Certainly such insights provide valuable correctives to the neoclassical universalistic view of society and atomized view of actor, but there is a danger here of losing sight of the overall trend of social change. For most people, the real pressing questions concern why and how their society is changing so fast, rather than what has not changed. People may need to be told that ethnic networks still matter in migration, but they are keener to know, say, why IT professionals were constantly on the move and why they made a fortune by creating nothing but Web sites. By emphasizing "embeddedness," anthropologists and sociologists have perhaps asked the wrong question in the first place about how economic activities-as though imposed from outside-are inserted into social relations. A more fruitful question may be exactly the opposite: how people develop social relations-seen as a holistic process of which their economic activities are a part-that lead to economic globalization. A point here is: Are anthropologists up to the task of explaining such phenomena as the emergence of the stock market?

This book attempts to take up this challenge. On the one hand it demonstrates that the process of abstraction is by no means an inevitable consequence of "economic laws," but is constructed and sustained through the rearrangement of various institutions, the interplay between unequal socioeconomic relations at different levels, and the establishment of particular ideologies. On the other hand the book stresses that while abstraction is strongly conditioned by established institutions (in the present case ranging from caste and dowry in India to labor and immigration control in the destination country), it should not be seen merely as a process of embedding. For instance body-shopping operations were based on networks, but the networks, far from appearing to embed Indian IT professionals' mobility, render it with more uncertainty, precisely by facilitating multiple, global, and multidirectional movement to escape as well as exploit economic volatility, and have thus overall contributed to a process of disembedding rather than embedding. Before turning to the dynamics internal to body shopping (summarized as ethnicization, individualization, and transnationalization), it is necessary to establish the basic characteristics of this labor-management system against a historical and institutional background.

Body Shopping: Brief Overview

Body shopping is arguably a uniquely Indian practice whereby an Indian-run consultancy (body shop) anywhere in the world recruits IT workers, in most cases from India, to be placed out as project-based labor with different clients. Unlike conventional recruitment agents who introduce employees to employers, body shops manage workers on behalf of employers-from sponsoring their temporary work visas to paying their salaries, arranging for accommodation and the like. Thus, workers do not enter into any direct relationships with their contract employers and can be retrenched at any time, whereupon the body-shop sponsor either is able to place them out to a different client or puts them on the bench to await a placement. Acting in association, body-shop operators link up with each other in the same region or in different countries, sending IT workers to where they are required. Although it is almost impossible to accurately estimate the extent of this global business, it is enormous. At any given time during 2000-2001 there were perhaps over one thousand agents specializing in the supply of temporary Indian IT workers across the United States and hundreds in northern California alone, and these agents were managing as many as 20,000 IT workers in the United States. During my fieldwork, most of the Indian informants estimated that no less than thirty-five body shops were managing more than 1,000 Indian IT workers in Sydney in late 2000.

Quite the opposite of what is usually assumed, software development and services are highly labor intensive, particularly at the phase of programming (coding a software design into computer languages) and testing, or debugging (removing errors in program design). Most of the Indian IT workers migrating through body shopping took on such tedious, unrelentingly monotonous, and low-paying "donkey work." Hence, some informants suggested, the term-made up of "body" (rather than "brain"), indicating the labor-intensive nature of the work, and "shopping," which implies quick and easy purchases-in contrast with what is conveyed by the phrase "head hunting" used for senior IT positions and in other professional recruitment. To reflect this aspect of their work and more importantly their position in the labor market, this study refers to those managed by body shops as "IT workers" although they and the body-shop operators called them "consultants" or "IT professionals."

It is important to clarify at the outset that the global labor supply and management scheme of my study is not synonymous with an earlier, officially endorsed and similarly tagged practice in which India-based companies sent their staff to provide on-site software services for overseas clients, and these employees, who received an overseas allowance on top of their regular salaries, returned to their offices once the project was completed. The term "body shopping" first surfaced in this context with the establishment in 1974 of Tata Consultancy Services (TCS) in Mumbai, India's first export-oriented software-service company. The body-shopping practice of my study developed during the late 1990s and is distinguished by quite different terms and practices. First, the ubiquitous practice of "benching" workers: quite simply, IT workers sponsored to enter a destination country on a temporary work visa without any prior job opening were "put on the bench" upon their arrival and subsequently, between job placements, without being paid or given a nominal stipend. Second, body shops-the term I use exclusively for the Indian consultancies engaged in the IT labor recruitment since the late 1990s-functioned in association with a chain of placement agents. This was largely because big corporate clients now outsourced their labor-management tasks to a single or a very limited number of large placement agents only, and body-shop operators, invariably small players, thus had to secure job openings through other placement agents who liaised with, often through yet another layer of agents, large corporations. Each agent in the chain took away part of the worker's monthly wage as part of the deal.

Whereas the earlier on-site services emerged primarily as a response to the labor shortage in the West, benching and agent chains are outcomes of various newer developments in the global IT industry and beyond. The widening application of Internet technologies enabled corporations to de-territorialize their production and management to an unprecedented extent, producing huge demands for IT workers. More importantly, since software packages had to be customized for the specific needs of different projects, it became necessary for IT professionals to move from one on-site project to another. The "financialization" of the high-tech industry in the late 1990s-whereby industry ups and downs were determined by stockmarket impulses-made large-scale firings and hirings an everyday event. The IT industry has thus needed not only a sufficient supply of skills but a mobile workforce so that it can respond to market fluctuations with minimum time lag. The need for the Y2K fix toward the end of the 1990s spurred a tremendous expansion in body shopping and further reinforced the practice of benching, which became entrenched during the following dot-com boom.

The specialized recruitment of Indian IT workers through body shopping also operated against a deep-rooted institutional background. On the one hand governments in developed countries have been rationalizing their immigration policies to facilitate the immigration of IT professionals since the early 1990s, such as the U.S. H-1B visa introduced in 1992, which allows foreign professionals to work for three years, renewable up to six. (Well over half of the H-1B visa holders were IT professionals.) But on the other hand governments still impose certain restrictions on companies in order to protect local labor and minimize any possible burdens on the state welfare system. In Australia, for example, it is technically illegal to sponsor the entry of foreign workers without confirmed job openings and for the sponsors to not pay these workers even when they are not working. Meanwhile, however, IT corporations require a smooth flow of immediately available short-term skilled labor. Body shopping removed the friction caused by state regulation by circumventing it: the benching practice of bringing in workers beforehand enabled corporations to select and dispose of workers anytime; agent chains freed large IT companies and the placement agents handling their labor management from obligations under the labor laws. The arrangement of agent chains made a highly externalized labor market comprising countless individual workers and brokers quite manageable from the industry's point of view. Furthermore, since the migrant workers shouldered the main part of the costs of relocation and of being benched, body shopping did not undermine the interest of the state or society in the receiving country.

(Continues...)

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