India grows up as labor arbitrage runs its course:
Bangalore wages have just been growing like crazy. To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart. He then jumped from 10% to 20% of his US counterpart in the next 1 year. During his time with us (less than 2 years) he jumped to 55% of the US wage. In the next few months we would have had to move him to 75% just to “keep him at market.”
What does this mean?
However, this huge run up in the wages has destroyed the ROI I referred to earlier. So today we decided to consolidate all of our engineering and research efforts back to our HQ in California.