Slashdot Mirror
The IT Market: Cyclical Downturn or New World Order?
An anonymous reader wrote: "CNN.com is running an interesting story on the heels of a Forrester
Research report concerning the
shift of high tech jobs from the U.S. to places like China, India, and Russia for cheaper labor and got me thinking about the nature
of the current downtrend in programmer demand in the U.S (as opposed to the "morality" of such a shift). While I'm sure the causes for this downtrend are variable, the more important
question in my mind is this -- Is software guru Bruce Eckel correct in
saying that the current downturn represents a temporary blip in the business cycle as jobs are shifted from large and medium companies to smaller companies,
or are Andy Hunt and Dave Thomas correct in recognizing this as
a new reality. Personally I tend to agree with Hunt and Thomas's view (which is not completely opposed to Bruce's opinion, btw) and
I also agree with their viewpoint that protectionist policies like H1B quotas and tariffs won't work to change anything for the better. So what do you think? Is this
just another business cycle or is this a New World Order in IT?"
We never thought it could happen to us: globalization was just supposed to make stuff cheaper to buy. But the race to the bottom can happen at all levels of employment, for all tasks that don't need to be performed on site. This includes us, the white collar IT workers.
This is not "the sound of inevitability", it's the sound of years of government/corporate policy to make the world our cheap labor playground. It can be reversed with rational policies that foster local investment at the expense of unchecked corporate profits. What happens when you have corporations that are invested in a locality? They don't ship the jobs overseas just to save a buck.
Read "The Economics of Empire" in the May Harper's. Excellent piece.
It happened to textile workers long ago. It's happening to us now.
I'm much funnier now that I'm a subscriber.
In the last 20 years we've gone from the idea of working at one company for your entire career, to working at several companies in your career, to having multiple careers. This just seems like another logical step.
It will certainly take some getting used to, and not everyone will compete, but I think that the average white collar American is finally learning what globalization means. Highly skilled folks in the rest of the world have been dealing with this for years -- they all learned English to compete. Now it's our turn.
I think this outsourcing trend is the new face of technology in this country. We all have to adapt. We are not going to be able to change the system, because the system is run by the corporations that employ, which have the politicians in their pockets. Take a look at how systematically, the clothing industry, the manufacturing industry, the auto industry has all moved their jobs overseas, to asia, mexico, wherever. At each point, people who lost their jobs in the US made a stink, but nothing was done. I hate to say it but I don't see it any different today, even though our programming jobs are supposedly "white collar" ... BFD.
I think we are just going to have to get used to it. We are either going to have to learn to get by on way lower salaries, or get into another career. Technology just isn't the type of job that's going to last for a whole lifetime. I'm already planning an exit strategy.
remember back in the day of 1999 ... when people said the tech boom was going to change everything? Introduce a whole new way of doing business? Well, that promise is being fullfilled. It wasn't exactly the positive change we were hoping for. But one lesson should be kept from those days. Remember ... be adaptable? Get used to change? If you don't change from your old business ways you'll die? All those messages were being yelled at the management, when it should have been yelled at us netslaves, the ones who supposedly "get it". What we need to get is, be adaptable. Tech is simply too volatile to base your whole life's career on. And those who don't adapt and change, will die a slow, horrible death.
The H1B program is not an example of anti-protectionism. Without any trade barriers at all, the employment situation in the US would be like that within the EU boundaries: a programmer from Portugal can get a job in Germany with the same rights as a German worker. Under H1B, an Indian programmer does not have the same rights as a US programmer; he is basically an indentured servant, who must accept any conditions his employer imposes or face immediate deportation.
The argument for H1B is the claim that there is a shortage of skilled technology workers in the US. At present, there is not a shortage, except in very limited cases. However, many companies prefer H1B workers to citizen or permanent resident workers, because they can drive them harder and pay them less, holding the threat of being sent back to India or China in reserve.
Three points:
1: Copyright, patent, and tradmark laws are not uniformly followed in the various off-shore programming destinations. You'd be unlikely to see "Intellectual Property" (their term, not mine -- don't flame me) concious companys sending serious development work offshore for fear of it being hijacked.
2: Companies that have sent work offshore will have very mixed results -- just as they have had with American workers, but much worse. With American workers many 'failed implementations' could rightly be blamed on scope creep, slipping schedules, and unrealistic expectations. The offshore work will suffer all of these, but throw in a communication (language) barrier. This will eventually be worked through, but in the meantime a lot of companies will get burned by systems that don't work, detailed design specs that the foreign programmers don't understand, etc.
3: As companies in general move more towards open source and Free software, corporate programmer jobs will split into two broad categories: Things that no one wants to work on without pay and that are difficult to outsource (e.g.: business applications); And integrating various components to make a system that adds business value (some Free, some open source, some commercial, some built offshore).
"But actually trying to use m4 as a general-purpose langage would be deeply perverse" --ESR
even in the boom people were worried about tech outsourcing. so why is this suddenly back up on the radar? my guess is that with a down economy it's more likely that this 'news' will shock people into reading/watching/consuming.
for some reason (ethnocentricity) i doubt that tech jobs will ever be significantly outsourced overseas. yes, gone may be the days of low-hanging fruit in the tech sector, and our growth rate certainly could not be sustained - but if you think it makes sense for the average small or even medium sized company to outsource, you're nuts.
not to mention integration and consultation are the two biggest gems yet to be mined for tech professionals. And they're entirely localized problems. You can't outsource the kind of tech that walks over to your user's desk to help them understand how to get the most from their system - the kind of tech that integrates -your- phone switch with -your- mail server, in -your- office to promote -your- core business practices.
and its not only cost management, it's risk management in a down economy. If you have $10m to invest in a project, and it's kinda risky - hiring local leaves you with full-time employees, employees whose loss -will- affect the morale of everyone else at the company, who -will- be drawing medical coverage, (who probably will get severence or at least holiday pay), and who -will- require infrastructure to support.
if you're not sure a new development is going to bring you new business - it makes sense to outsource. if it fails and you outsourced, you cut your losses and move on. that easy. and while you're outsourcing, what's the difference between the shop down the road and the shop down the pacific?
oh, and that slideshow by Hunt and Thomas was crap. basically it was: reinvest in yourself to keep your job, don't lock your dev experience to a particular vendor/language/industry (duh). but we can't all be 'recognized experts' or lecturers or project managers now can we? it's more a treatise on how the gray hairs can fend off the tide of young coders than how coders can defend themselves from being restructured or outsourced.
// "Can't clowns and pirates just -try- to get along?"
This, from:
http://www.bayarea.com/mld/mercurynews/5918 824.htm
Foreign engineers will change our economic world; prepare yourself
By Sanford Forte
WE'RE hearing a lot these days about economic distress. What we're not hearing enough about are global economic and business changes that hit our manufacturing, technology and financial sectors -- and lead to job displacement. These changes will not abate; if anything, they will accelerate.
It's more complex than just ``globalization.'' It's a series of technology and capital transfers that have fundamentally changed our industrial and technological playing field. The rest of the world is close to fielding robust post-industrial infrastructure, and learning to outplay the best of us.
The National Science Foundation reports that China graduated nearly 200,000 engineers in 1999 from good universities that get better by the year. By comparison, American Universities graduate a mere 60,000 undergraduate engineers annually.
Combined, India and China produced nearly 26 percent of the world's newly minted engineers in 1999. Excluding Japan (where engineering wages are higher), Asian economies graduated 320,000 engineers in 1999 alone.
Wages for Chinese engineers range from roughly $4 to $8 per hour. Engineers from many other Asian nations (excepting Japan) command little more than that. These well-trained engineers are all perfectly capable of working ``on the wire'' for engineering firms all over the world -- and they are doing just that.
China has some 18 million people migrating from the interior to the coastal manufacturing provinces every year. This represents a virtually limitless source of low-cost labor for the next 10 or 20 years. It will feed China's surging consumer demand. Don't believe for a minute that China's (or the Pacific Rim's) economic development will be mostly fueled by American-made products and technology. It won't.
China is already the largest manufacturer of consumer electronics products in the world, and within three years will be the world's largest automotive manufacturer.
Manufacturing is migrating from Pacific Rim economies (Malaysia, Japan, Korea, Taiwan, India) to China, leaving large workforces and technology infrastructures behind. Those displaced workers are migrating to the technology service sector, and already posing a competitive threat to high-tech service sectors in the developed West.
India already has Six Sigma (a universal measure of quality that strives for near perfection) technology and consulting firms equal to our very best, offering superb technology solutions at cut-rate prices.
Roughly 47 percent of Americans are directly or indirectly dependent on technology for their livelihood; keep this number in mind when considering how the ``Law of Lowest Wages and Costs'' has already -- and will increasingly -- impact our economy and lifestyle.
Bottom line: We in Silicon Valley -- and America -- are in for a long, somewhat painful ride. We will be challenged like never before. Americans will, after a time of readjustment and pain, finally have to ask what ``enough'' is . . . and that's a good thing.
It's a good thing because the seemingly never-ending upward spiral of promised prosperity that Americans have recently taken as their birthright has come at real cost: disintegration of families, environmental degradation, unhealthy xenophobia borne of the fear of ``losing advantages'' that we so dearly enjoy.
After the looming crisis fully takes hold, after the scapegoating of politicians, foreign nations and immigrants has run its course, Americans will search inward for values and ways of life that don't depend on maintaining material hegemony that is in excess of ``enough.''
We can be prosperous without obsessing about prosperity, that is, sacrificing our very lives and identities to some abstract definition of ``success.'' I predict a resurgence of interest in things spiritual, a more relaxed defi
So now we have programmers who are used to getting $80 per hour for highly skilled work demanding the same thing for work that your average self taught hacker can do. Of course it makes sense for business to farm it over seas to have it done at a fraction of the cost. It's pretty straight economics if you can remove your emotions from it.
All the best,
--Bob