From Manhattan to Mumbai
For decades, newly minted business-school graduates have flocked to Wall Street in New York, eager to make their mark in one of the biggest financial hubs in the world. Today, these “high-level” jobs are increasingly moving abroad, fueled by Wall Street companies’ efforts to reduce operating costs in a bad economy.
Over the past year, domestic financial markets have been hit hard. From 2004 to 2007, the top U.S. financial companies earned approximately $254 billion in profits. Over the past year, however, these companies’ combined assets value has decreased by $107.2 billion. Companies in the financial sector have been outsourcing for years, but the recent economic downturn has changed the types of jobs going overseas. Instead of the so-called “back-office operations” such as IT and accounting, companies are increasingly relocating research and data analysis jobs to places like India and Eastern Europe.
According to the International Herald Tribune,
[This] could signal the beginning of a profound change in the way investment banks are structured, with everyone but the top deal-makers, client representatives and the bank management permanently relocated to cheaper areas like India, the Philippines and Eastern Europe.
Some U.S. workers are adapting by moving where the jobs take them, whether that’s Latin American or Asia.
Although this trend might suggest that emerging and developing economies are booming, the International Monetary Fund’s July 2008 World Economic Outlook Update suggests otherwise. Economic growth in developing economies is expected to slow from 8 percent in 2007 to 7 percent in 2008-2009 — still better than U.S. forecasts, but an indication that clear-cut winners are hard to find in today's harsh economic climate.
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