Wage Inflation Caused problemlems for India

Outsourcing is not what it used to be.

A new report from market research firm Gartner, Inc. warns that a labor crunch and rising wages could erode as much as 45 percent of India's market share by 2007.

Indian industry watchers acknowledge that the country's outsourcing industry — its golden goose of the moment — is indeed facing a "serious" problem.

In an interview with CNN/Money from New Delhi, Kiran Karnick, president of the National Association of Software and Service companies (NASSCOM), said he's concerned that these challenges could stymie India's strong double-digit growth in outsourcing services.

Funny how that works. Low wages leads to lots of work from outsourcing which leads to a labor shortage which leads to rising wages which leads to…

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