Madagascar does not seem to be the perfect place for outsourcing. It's far from the rich Frankophone countries, the communication lines to the rest of the world are bad, and there's no experience of doing outsourced programming here. But those problems are either A. Surmountable, or B. a potential advantage in disguise. People There are clever people here. There are good universities which educate students in a western style and mindset. So while Madagascar is far away from Paris, it is closer, intellectually, to Paris than India is to New York. It is also much closer to the Frankophone world in terms of time zones than Asian alternatives, and this is crucial to efficient work on a reasonable schedule. Welcoming Foreign Managers The very remoteness has its own attraction. Madagascar could, as an outsourcing model, function a little differently from the Indian one. Indian models attempt to provide project designers, project managers, documentation, and programming -- in short, all roles possible. This is both good business (for them) and necessary, as India is so isolated from the US by culture and time zones. British or American project managers do not want to go to India to manage the project, and if they did go, they would be ineffectual, as the culture and language is different. Further, such managers would be NOT be welcomed, because there is a real paranoia that foreign companies would steal the employees if they actually met them. Madagascar, on the other hand, could welcome Frankophone managers. With very little capital, a single community of programming talent and all-inclusive resorts could be built in eastern Madagascar, providing beautiful weather all year long, beaches, lemur-speckled forests and western hygiene and culture. For at least ten years, such luxurious accomidations would remain literally cheaper than a month in one's apartment in France. And the company would pay the expenses of such a place -- equivalent, hypothetically, to $800 American. Managers would leap to come, and would pay to bring their wife and children, inexpensive as it is. Madagascar is beautiful, and costs are outrageously low. Fear of Brain Drain Madagascar would not have to fear that foreigners would steal their best employees. There are three main reasons for this. One: The lives of the programmers in the resort community of Madagascar would be better than any that they have experienced in past, and arguably better than they would experience in France. By paying them enough, and feeding them and their families in the all-inclusive dining rooms (this makes production, purchasing and staff for the kitchens more regular and predictable, and works to lower the cost of food for the worker community) Malagasy programmers can be persuaded, RIGHTLY, that the quality of life in France or Belgium would actually be LOWER. Two: Cost of maintaining a worker on permanent contract in Madagascar will be much cheaper for a Frankophone company than bringing such a person "home", especially considering the benefits and taxes connected with full time hire in the mother country. Three: Scouting for people to bring home would be done by project managers. Actually finding good talent to bring home would be killing the goose that lays the golden egg. Bringing people back to France or Belgium would prevent a return to this resort lifestyle. The Madagascar Branch Office -- there when you need it The negligible time difference, and the ability to place a home-office project manager on site, together with ubiquitous French language (which needs polishing in many of the potential workers, but polishing is comparatively easy with an existing base of knowledge), make the Madagascar programming group a branch office, rather than an separate contractor. Imagine the ability to hire an entire jelled programming group in a branch office, and on one week's notice. Imagine that the cost of sending an experienced project manager to work with that staff would be only $2500 for a month (on top of salary). Imagine that the project managers you have locally all WANT to go. The ease that this represents, compared to a struggle with Indian firms, and the low cost of it, compared to staffing up a large full-time body of project programmers means that companies, once they see the advantages, will maintain a group of small-project programmers, large-scale project designers and mangers domestically, but outsource the actual programming of large projects to Madagascar. Intelligent companies would actually manufacture projects to be outsourced, as a perk for their talented employees. What's Needed Communications: Lines to Madagascar are abysmal. A fibre trunk to South Africa needs to appear as soon as possible. Resort Communities: While building a resort or quality single-family housing in Madagascar is expensive by Malagasy standards, by American or French standards, it is absurdly cheap. A community of high quality homes could be provided, as well as a resort building for under $1,000,000 US. More expensive would be providing good plumbing, sewage treatment, and clean, reliable electrical power. And of course, all this needs to be built near an airport. Workers: The Universities of Antananarivo will need to begin preparing students for exactly this sort of work. A three to four year program will be required, with many example projects and relationships with local Tana companies to provide (free or at reduced cost to the local companies) opportunities to perform exactly as the industry performs with foreign companies. As you see, this requires three actors: The government, an outside investor (hard currency is required, but laughably little by western standards) and a University. Economic benefit French companies will pay $10 (20,000 Ariary) an hour for these workers without batting an eye. More expensive prices will require a track record of good service. This is ten times the salary of the average Malagasy worker. Foreign managers will bring their families to the resorts. They will spend money in the local economy. Foreign guests of all types will tell others of Madagascar as a tourist destination, and the resort communities will grow. The money spent on communication will reduce costs and improve efficiency for businesses all over Madagascar. The domestic projects needed for production of programmers at University will improve efficiency of domestic companies, and at very little cost. Importation of computer parts and domestic production of, for example, computer cases, cables and other industries which Madagascar can get into quickly and relatively cheaply, will both lower costs for the whole country due to economies of scale, and provide an manufactured export product to Africa. Countries in Africa may be more likely to order computer parts and cases from Madagascar, as their close-by high-tech cousin instead of directly from China. This would allow Madagascar to get a cut as a shipping middleman for such items. (Computer cases are particularly attractive to manufacture domestically. They take up a large volume on container ships, and weigh very little. They are not tremendously difficult to manufacture, requiring sheet metal work, welding, and painting.) When can it be done? I would like to say "NOW!" but in truth, outsourcing to Madagascar awaits the fibre line from South Africa. However, the day after the first bits fly over that cable, the business outlined above can begin to operate. Preparations should begin today, in both the financial world and the local universities.