Slashdot Mirror
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.
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.
Visit Jonesblog and say hello.
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.
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.
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.
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.
Flying is easy, just throw yourself at the ground and miss. -Douglas Adams