3.2 What changes have taken place in the FLOW of GOODS and CAPITAL? 3.2b- TNCs control a substantial part of the global economy and have created a GLOBAL SHIFT. Lesson 5- Today we study one TNC in the TERTIARY SECTOR to show how it operates in different parts of the world.

STARTER Unravel these and match to the correct definition Lfow Sgdoo Cpiltaa ndyrsceao movement Products that can be traded and moved physically from place to place Money used to purchase goods An employment sector, involving manufacturing goods

Since the 1990’s many companies have moved their call centre operations to countries where the wages are lower. call centres deal with services as Internet banking Airline booking Help lines Credit card billing. Popular destinations for outsourcing include: What is a call centre? Why do you think some people refer to this movement of jobs as a GLOBAL SHIFT

What would it be like to work here? What does the artist of the cartoon think about outsourcing?

Outsourcing This happens when a job is given to a company overseas that was formerly done at home. This can happen due to the advances in technology and communications. Go&feature=player_embeddedhttp:// Go&feature=player_embedded vid for film trailer

Why outsource? The reasons companies outsource can vary, but may include: To reduce costs To improve quality of service To access and benefit from outside expertise To avoid training costs To focus on core business To improve choice To reduce risk (less investment, less direct employees) Avoid pay health insurance, pension contributions, etc. for workers

Task 3 - Why switch to India? Watch the first five minutes of the 'Diverted to Delhi video and make notes on what the Indian workers have to do to be able to work in a Call Centre. Then scroll to 16:50 and make a note of the reasons why Call Centres have relocated to India. arningzone/clips/portrait -of-shirijit-nagar-a-bt- call-centre-worker-in- mumbai/3209.html

In order for cities, regions or countries to become attractive locations for TNCs to outsource, they will have to fulfil numerous requirements including: Improving internet speed, capacity and reliability Improve language skills of workers especially in English Improve IT skills and understanding Train workers in culture and customs of potential customers home countries Ensure reliable telephone connections Offer 24 hour service - important the contracting company is in a different time zone or even hemisphere. Offer a high quality service cheaper than potential customers can provide themselves

Commonwealth link with the UK Low wage costs in India Specialist companies now growing in India Low telephone and internet costs India produces 3 million graduates a year ICT is well taught in India English language skills are good in India Why Choose India?

It has a new international airport (Bengaluru International Airport) that opened in 2008 (India's fourth busiest). They are building a 42km (41 station) rapid transit system and the city is also connected to the Indian national railways system. The city also has an extensive bus network and an improving road network. The government has aerospace, defence, IT, software and telecommunication research facilities based in the city. This has meant that Bangalore has enjoyed sustained growth nearing 10% per annum and now has India's third highest GDP per capita. As well as enjoying domestic investment, Bangalore has also enjoyed FDI.

Outsourcing- winners and losers HSBC, Europe's biggest bank, pre-tax profits of $19bn (£11.8bn) for 2010, more than double the $7.1bn figure for Want to increase profit in a difficult economic climate by cutting staff costs. Part of this will be to close some local HSBC branches and promote the use of ‘Online Banking’. They will relocate three of their UK based call centre’s to New Delhi to cut wage and rent costs. David Somma, 34, has been working for the HSBC credit card call centre in London, UK for the last four years. He has worked his way from a team member to team leader and is paid $22,500 per year for his work. David has a partner who is pregnant and a three year old son as well as a mortgage on their two bedroom apartment in London. David has recently been given three months’ notice that his job will end in December and his job will be transferred to New Dehli, India. With the current global recession, David is worried about finding a new job. Ankur Chadha, 34 is a graduate student from the University of Delhi in electronic engineering and system design. He is currently working in a call centre in New Delhi for Amazon.com helping with website enquiries and has done for the last five years. He is married to Jer and has two children or 3 and 5 years old. Ankur earns $2,100 a year with Amazon but with his experience will earn $2,500 with HSBC. Ankur is looking forward to the new challenge of helping UK based customers with their credit card enquiries.

What are the pros and cons in this situation as seen by the various participants? HSBCDavid SommaAnkur Chadha Pros Cons

Complete the speech bubbles, showing how each player (involved party) will feel about the GLOBAL SHIFT of call centres from DEVELOPED to DEVELOPING countries.

The benefits of outsourcing to less developed countries The costs of outsourcing to less developed countries The benefits of outsourcing to more developed countries The costs of outsourcing to more developed countries Use the information on page 259 of the old green GCSE textbook to make notes on the following:-

Using examples explain how outsourcing produces winners and losers. ( 6 marks )

A new kind of OUTSOURCING m88 m88 What services are now being OUTSOURCED to cities like Bangalore? Why is this happening? How do you think this will benefit Bangalore and its educated residents? Who do you think suffers with these developments?