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Tale of Two Tech Hubs: Silicon Glen & Chandiga
securitas writes "A pair of stories about two technology hubs in different parts of the world contrast and document their efforts to flourish as regional technological centers: Scotland's Silicon Glen and India's Chandigarh. The BBC explains that Silicon Glen is still struggling to recover from the technology bust with 15,000 jobs lost in the last year alone. 'Scotland's electronics sector contributes one-seventh of its gross domestic product, directly employs 45,000 workers, and accounts for more than half the country's exports,' which are down 50%. Meanwhile, the New York Times reports on northern India and the birth of a technology boom, as a group of government officials, consultants and high technology entrepreneurs is trying to transform the city of Chandigarh from a 'sleepy farm state capital into the "technology hub of northern India."' The city is competing with other Indian cities by offering 'lower labor costs than India's "first tier" technology hubs, places like Bangalore, Hyderabad, Bombay and Gurgaon, outside New Delhi.' As Chandigarh competes with its rivals for call centers and software development parks, some of those cities are experiencing a labor shortage of skilled workers. These aren't the only two places with such reversals of fortune - how does your region fare?"
The main advantage of having a screwdriver plant in Scotland is that you can put "Made in Great Britain", or "Made in Scotland" on your products, even if most of the work was done elsewhere. It can also help get round qutoas and import duties.
The thing is that nobody really cares about where it is made as long as it works, the WTO has reduced most import duties, and the cost savings from having the screwdriver work done elsewhere more than offset it anyway.
I don't know for sure, but my guess is that the tech industry jobs in India pay more than sweatshop jobs.
In any case, it seems to me that an interesting solution would be for "wealthy" countries to impose minimum wages on companies that do business in their country but employ people in other countries. E.g., if Nike had to pay its African workers, say, half of the U.S. minimum wage, or else be forbidden from doing any business at all in the States.
That way, Americans would be less freaked out about losing their jobs to foreigners because it wouldn't happen so much, and the sweatshop employees that remained would actually be getting a significant level of monetary help.
Of course, I have a suspicion that Indian tech workers make more than U.S. minimum wage, and as far as I can see, there isn't too much that can be done about that given American ideals. In particular, capitalism is supposed to promote efficiency by rewarding people who do things cheaper. And if Indians provide better tech value, it seems to me that it's the American way to farm out those jobs.
... directly employs 45,000 workers, and accounts for more than half the country's exports,
Did Mel Gibson lead them to independence while I wasn't looking?
(Yes, I know Scotland was an independent country in the past, but it hasn't been in quite some time.)
This should exemplify that IT resources and programmers are finite. Jobs dry up in one area only to resurface where costs are lower.
Any industry that becomes a commodity will undergo a similar transformation. This is exactly what made the whole silicon valley experiment so wildly successful in that an entirely new paradigm was created that existed in few other places. When the "resource" became common and the concepts became commodities that could be moved around, traded and bargained for, the result was job movement to where those who had the skills would work for less. So, the trick is to innovate and again create for the world markets and ourselves skill-sets that are unique and in demand for the products or services they provide.
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What I find amazing that it's the same people who think nothing of paying $20 dollars for a t-shirt or $150 dollars for pair of sports shoes that they know are made by workers earning next to nothing in sweatshops in South East Asia that are the first to complain when jobs in their own industries start being lost to overseas firms.
If you're happy to reap the benefits of a global economy when you go to Gap or Footlocker then you should be ready to accept the consequences when the same global economy dictates that you're easily replaced by someone who lives half way around the world. Otherwise, you're just a hypocrite.
Evolve and adapt. It's what workers in other industries have had to do for decades if not centuries. Now it's our turn. The sooner we accept that the better off we'll be.
"Accept that some days you are the pigeon, and some days you are the statue." - David Brent, Wernham Hogg
Yeah you are right pal. For example I work for a US based company (Cognizant Technology Solutions) & I am an Indian , a fresher , finished my B.tech & get Rs 15000 which a lot for a fresher but it is nothing in US only near about $300 ($1 = Rs50 ) where as as much as I know a B.tech frsher in US will get atleast $ 5000 , more than 10 times. Now to cut cost companies follows the Off shore On site model for this some people like me get some money but that does no good to my country coz the industrial control of my country is slowly shifting from India to US which is not a good things. If a Indian Comapny do business in US then that will be good for my country so I also do not like this On site Off shore model and it is not new it happened in other industry also as my previous poster said. Anirban Biswas
I find it amazing that despite 50 years of successful globalization, we still hear these moronic arguments against jobs moving overseas. After WWII, the US accounted for 50% of world GDP. Europe, Russia, and Japan were destroyed. South Korea, China, and Taiwan were agrarian. etc.
Since then, Europe and Japan have been rebuilt, and East Asia and India have greatly advanced technologically. America only accounts for 25% of world GDP today - but our standard of living is much higher.
This is not a zero-sum game, people. Yet every decade, we hear the same moronic complaints. People were worried about Japanese electronic goods. Then they were worried about Japanese cars. Then they were worried about cheap textiles from overseas. Then factories in Mexico. Steel dumping. etc. etc.
If these predictions had been correct, the United States would have a lower standard of living today than it did in 1945, and a higher unemployment. But the reverse is true - we have very low unemployment today, and a higher standard of living than ever before.
So suck it.
As for these jobs being "sweatshops" - please. The fact is that these countries have much worse capital infrastructures, so they need to work their labor much harder to make investment attractive. But it's not like it stays that way forever. Believe me, Taiwan and South Korea and China and India are far better off today after their sweatshop phases than they were before. Or, don't believe me, but believe the people of those countries - do you see the Chinese up in arms because their standard of living has doubled in the past 20 years? Why is it that the democratically elected government of India is moving away from socialism and trying to attract those "sweatshop" jobs? Why does South Korea have such a high standard of living today, if these are simply sweatshop jobs?
Gimme a break.
But then, they got laid off becuase their tech support got outsourced to India. Now they HAVE to buy the 5 dollar shirt.
What I want to know is: How do all these business owners think they will sell their expensive wares when everyone is back to making 7 dollars a hour?
I'm sure your post is particularly interesting to former steel workers in Wales and elsewhere around the world that have lost their jobs because of the hefty import tarriffs on foreign steel introduced by the Bush administration.
Seriously, if you're going to talk about free markets, then feel free to do so. But first have the decency to acknowledge that the US definition of free trade isn't 100 percent free.
"Accept that some days you are the pigeon, and some days you are the statue." - David Brent, Wernham Hogg
For instance, if my job were outsource to India for 1/3 of the salary they pay me, but that turns out to be a decent living wage in India, I can't say "fine, I'll take the pay cut and move to India!", even if I want to. If all the jobs in my area of expertise move out of the country, I can't follow them, I have to find a new field of employment, because of artificial barriers to my mobility.
If there are going to be artificial barriers to my mobility, I want artificial barriers to my job's mobility as well.
Call it what you like but a free market economy even in the new world order will still cater to a product delivered at the lowest price. Outsourcing is a fact of economic life, innovation is the answer. If more "third world" programmers and designers rise above cookie cutter programming watch out.
This is a problem for our chosen skill set. A Dr or lawyer practises close to home and can command a decent wage that cannot be reasonably outsourced. I mention these professions because of the length of training is close to a computer professional. There is one area of our profession of course that cannot reasonably be outsourced and that is defense. Beyond that, most other work in our field can and is being done overseas. This trend is going to continue. I do see long term problems with science education here. In the limit the country that trains the most students will take the lions share of this business. Here in the US where I live, a profitable career in computers probably is a thing of the past. Even at subsistance level, there is no economic incentive for a company to hire here. Minimum wage here is ~6$/hr giving ~12k$ per year. That salary is 2k$ above what a very good salary for a computer professional is in China. (or Bangalore for that matter).
With perfect business conduits, work could be farmed out smoothly and easily leaving the work here in the US mainly work that has locality. Dr, lawyer, undertaker etc.
I know there are arguments that the quality of these outsourcing units is not great but I seem to remember that is what people said about Japanese cars when they first hit the scene. Do people say that now?
Hedley
There are scarcely 550,000 people in the US whose incomes exceed $500k. That's equivalent to half the population of Rhode Island and would yield 50k people in California--a state home to 27 million. These are the people who are making judgements about offshore outsourcing. I hardly think the opinions of 0.44% of the population represents 'the American Way.' Does it wholly escape people how close, yet how few, 'the superrich' are? Their lives and their interests are by definition NOT 'the American Way' any more than any other group of 0.44% can catagorically represent an entire population unless 'the American Way' is some begging Dickensian euphemism for willingly being walked on and thrown out with the trash.
I would like to invite you to my state. The state of North Carolina (which is a tad better off than some of its neighbors). There are thousands upon thousands of people here that can NOT get a job. They WAIT in line to get the only job opening at the local mcdonalds. Yes its THAT bad.
'Well move somewhere else' They CANT afford to. They sold the car last year to eat/pay rent. They live off the goverment because that is the only one that will feed them. They can not sell the house because no one would be loony enough to buy it there.
That is what 'cheaper' textiles has gotten you. Thousands of people that can not work anywhere else. They are 50 and all they have every done is work at the local plant. Their parents worked there. Their kids worked there. Then all the local companies that relied on that key source of income go belly up because no one has any money.
So 'suck it up'? Im sorry, tell that to the guy who just lost his job of 20 years and his wife with the 3 kids. They can just 'suck it up'.
Over 1 state the steel industry has never recovered. There are places in virgina you 'do not go'. They are THAT poor. They can not move somewhere else, they can not afford to move. You know it costs gas and money to move right? Now lets assume they can move somewhere else to get a job. Where do they live? They dont know anyone there to help em out...
You need to wake up! The people that can not afford anything are EVERYWHERE. You speak like someone who has a job and thinks they are better than everyone else because of it. Your not. Your a slave like the rest of us to that job. Your job was relocated somewhere else you too would be singing a different tune.
You sir need to give us a break. Every other country out there expects us to help them out. Then when we as for some concessions back everyone gets up in arms about it.
"Work smarter, not harder" in programming jobs is not an empty motto, it's the very essense of using your time effectively.
You're probably right about that, and I do agree that if you just throw manpower at problems, you'll get solutions that work, but are not elegant, or the most efficient ones. I used to program before I threw myself full time into engineering, and it pisses me off to see badly written code. The industry is such that so-and-so project has to be done in such-and-such time within so-much cost, so they put people who have been trained to use so-and-so language and do the job. These are not programmers the way I would define them i.e., these are not people who love programming, or think about solutions the way real programmers do - these are just people who know how to get certain jobs done using code.
But eventually, most industries don't care about how elegant the solution is as long as it works. Now if the code was being written for a new chip, or for something being used in a spacecraft (yes, I'm giving extreme examples, but you get the point), the code WOULD have to be efficient and elegant - you need real programmers for that. If I just need something to run my database and work behind a regular webpage, elegance can go to hell as long as it works without being buggy.
"When the only tool you own is a hammer, every problem begins to resemble a nail." - Abraham Maslow (1908-1970)
That way, Americans would be less freaked out about losing their jobs to foreigners because it wouldn't happen so much, and the sweatshop employees that remained would actually be getting a significant level of monetary help.
You're assuming that Indian IT workers aren't already getting a significant level of monetary help. There's an article about this very phenomena in the latest issue of Fortune magazine, and one point it makes is that $2000/month salary for Indian call-center workers is princely. A 23-yr old Indian male was interviewed and said his goal is to own a house and a car by the time he's 28. He already has the car (and motorcycle).
The problem is, Americans see our $60,000/year jobs going over to India and morphing into $24,000/year jobs, and we automatically think "sweatshop!" "exploitation!". But that knee-jerk reaction doesn't take into account that India is a developing nation, the cost of living there is significantly less, and the (1 dollar : 46 rupee) exchange rate further magnifies the wage disparity in our eyes.
In any case, it seems to me that an interesting solution would be for "wealthy" countries to impose minimum wages on companies that do business in their country but employ people in other countries. E.g., if Nike had to pay its African workers, say, half of the U.S. minimum wage, or else be forbidden from doing any business at all in the States.
A better solution would be for America to adapt to globalization. That's not impossible, as so many seem to believe/fear. In fact, self-organizing adaptation is one of main strengths of capitalism. We did it when the Japanese took over the auto industry, and have been doing it with the steel industry, for two examples. We're the most creative nation in the world, and just as importantly, we have the economic, legal, and social structures to allow us put that creativity into practice. There's no reason we can't apply those advantages to the problems that globalization brings. Turn lemons into lemonade, so to speak.
And we can start with our dismal educational system. As one Indian business leader stated in that Fortune article, we need to retool our educational system so that it gives people the knowledge, skills, and work ethic needed to both create and take advantage of new economic opportunities that will inevitably arise with globalization.
Regardless, globalization may be painful for some, but if it helps bring the rest of the world out of the dark ages, then consider it a long-term investment that will eventually pay itself off ten-fold. Who knows, maybe one day, democratic, affluent India and (dare I say it) China will be exporting their call-center and IT jobs back to the US.
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The BBC article is fairly accurate in that during 80s and early 90s there was a lot of foreign investment into Scotland by companies, mainly from the U.S. and Japanese economies. A good portion of this went into building electronic manufacturing and assembly plants.
The general idea was rather simple in that Scotland had about the right balance between providing highly skilled workers and the average level of pay. Thus, making it an attractive place for stable investment.
Off course we all know the tale now. Both the U.S. and Japanese economies went south. So closures were made along with the job loses.
Now that things are improving new markets have opened up offering better value for money. Scotland can't really compete with the Indians on this because in short India can provide the same skill set at a lower wage.
The other problem here is that Scottish politicians spend so much of their time breathing hot air and interfering in the business process that it scares investors away. In other words they are not the solution but in themselves form part of the problem. However that is my personal view and so somewhat subjective.
But it would not be like me to be such a pessimist. I think one of Scotland's greatest strengths comes from the engineering intellect and experience that this country has had from the early industrial revolution through to the modern day.
Now this strength doesn't manifest itself in large corporations now-a-days but more in R&D centres or small companies with good financial backing that take the cream of this brain power and focus it in on proper product development. And certainly I have witnessed a good growth in the number of these companies embracing the open source development model.
That's one of the funnyiest things I've heard in a while. Is that what most Americans believe? No wonder less than 1 in 10 have a passport!!
Many Americans do beleve that, but the passport issue is a seperate one. You see, very few of us need a passport to go on a 2-hour car trip. We have a little bit more land mass (than you most likely do, as I'm assuming you live in Europe). Besides, most Americans don't particularly want to stoop to lowering their standard of living by going somewhere else.
Be angry/jealous/in a furious rage about this, but that's just the way it is. To add to this horrible lack of US Citizen "worldliness" that Europeans have, most of us only speak one language.....imagine that....we go on a day trip and the people still speak the same language as we do at home (with the excpetion of convenient store workers, bus boys, landscapers, and hotel cleaning staff).
Would I like to be able to have an easy way to practice languages other than gutter Spanish? Sure. But it's a small price to pay for living here.
(remember, we're #1)
Do not fold, spindle or mutilate.
Who knows, maybe one day, democratic, affluent India and (dare I say it) China will be exporting their call-center and IT jobs back to the US.
Which would mirror what's happened in the car industry. It's been very interesting, but over the last few years so many of those auto jobs that where 'lost' to Japan and Korea have now returned.. this time it's those same Japanese and Korean auto makers actually building cars in the states. Turns out that it's cheaper and more efficient (the hallmarks of those companies after all) to simply build the cars in the U.S. to avoid having to transport them overseas.
The theory of 'localized globalism' is really starting to look more and more promising every day. Basically it states that as the overall wealth of the global economy increases, it will eventually become more desirable to localize the actual production of goods and execution of services. We've seen it in a number of different industries, all following this same pattern.
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