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IT Outsourcing Need Not Threaten Our Future
Xeo writes "The topic of the moment in a lot of people's minds is the outsourcing overseas of 'white collar' jobs. While many people are perhaps rightfully worried about this, there's an editorial on the subject that tends towards the other direction. It makes some very interesting points on the whole idea of outsourcing and what it means for the US at least."
The articles author makes decent points, but what it all boils down to is that, usually, change doesn't lead to disaster. Which is essentially true. I'm sure that whatever the econimic trends, some sort of equilibrium will be found. But as someone getting ready to leave a university with a CS degree in a year or so, I'm pretty worried about the interim. Although I suppose I'm in a far greater position than someone whose got a family to support. I'm sure many /.'ers would agree that money is a distant second to having enjoyable, challenging work.
:)
After all the doom and gloom about the tech industry I'm happy to hear a positive viewpoint, true or not.
Ansi's and stupid tricks!
The guy is a President of an Engineering University. Is enrollment is down between 20-50% based on nationwide trends. Of course he is going to push a positive forecast to push enrollment up. But the kids are not buying it. I wonder what a good field is these days in the US?
Which will then be outsourced.
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Sorry, I'm only a 1336 h4x0r.
Regardless of how much Ford (the original) made cheap cars, he knew that it would mean jack if his employee's can't afford them. He hence paid his employees very well.
There is no point for a company to be cutting costs if all it does is starve the consumers - it will create a vicious cycle whereby the more you cut costs, the smaller your market.
Granted, you are opening a new market in the countries where you now do most of your hiring - BUT then it's still a comparative small market because your prices are aimed at consumers with assumed income several times that people in whose countries the products are made.
Isn't this just another great example of the great human fault of discounting the future?
My life in the land of the rising sun.
PhD != talent
In fact, any degree/certification != talent
talent = (creativity + passion) * experience
experience = education and/or training
"Engineering education needs to emphasize not only technical skills, but also teamwork, global awareness, entrepreneurship, cross-disciplinary thinking and other non-technical skills needed in a global economy."
Yeah.. really bone up on those non-technical skills so you can manage your offshore help. Make sure you've taken Xerox Machine Repair 101 so you will have some "added value" in the office. Take some medical classes so when your help complains about eating and sleeping disorders, you can help out and give the "caring, compassionate" look.
Flamebait? fuckit..this is tongue in cheek. Offshoring coders is utter bullshit.
Because once a few engineers innvoate, we don't need indians or chinese, or hell, factory robots, to build the actual product.
Because everyone can be an engineer! It doesn't take 6-10 years of difficult math, chemistry and physics courses to become an engineer, and everyone, and by this I really do mean everyone, say at least half our 300 million population, can not only be an engineer, but a innovative one too!
Wrong cliche, since they wrote this, rather than saying it aloud, but how can they say this with a straight face? I'll tell you how. Because this asshat is one of the privileged, one of the elite. He gets to write stupid opinions for a living.
At least this opinion isn't nearly as sickening as some of the nascent, not quite formed opinions I see everywhere else. Ask Joe CEO what he thinks, and if he cares to reply at all, it's something to the effect that we should all be daytraders or the like. Too bad we're all sheep.
Baaaah! Baaaaah!
US economy is the largest homogenous market, so all suppliers will tailer their goods for that market.
Emphasis mine. The crucial thing about the US is that it is a market system. If you need investment, you can get it, from someone who has the authority to make a decision there and then. If you have an idea, you can sell it without waiting for a central planning bureacracy to factor it into their 5-year economic plan. The old Soviet Empire couldn't innovate because it centralized its decision making. The US works because of the feedback inherent in a market system: the better you are at satisfying the demands of the market, the greater the resources placed under your control. If you fail, your resources will be depleted and you'll get no more. And who is this market? Everyone to participates in any way in the economy gets to spend or invest their own money how they please.
Sorry, but you're wrong. "Anything that remotely involves creativity or innovation is not going anywhere" ??? That's quite similar to what was said last time outsourcing surged - only blue-collar jobs are ever going to get moved, no need to worry if your job is a white collar, highly-educated, bla bla bla ... There is NO potential limit to outsourcing jobs. The ONLY jobs that can't get outsourced are the ones that require a person to physically be there - like car washing, etc.
And it DOES present a strategic long term concern for the US. When more and more of these jobs go outside of our borders, doesn't that strike anyone as a little bit of a threat to our security? If all of our technology is being worked on by non-Americans, if the jobs that require government clearance now will move elsewhere, don't you think that will be a "bad thing" for the security?
And the biggest problem with outsourcing of intellectual jobs is, there is no incentive to study your ass off and choose a profession that requires a lot of knowledge. America will slowly become a nation of 99% truck drivers and 1% CEO's.
Microsoft's innovative ideas were never contented by the US government. What is punished is anti-competetive, monopolistic behavior.
If we don't do that, we should give companies monopolistic rights (in form of intellectual property rights) in the first place.
You're missing the point. If only a few go into "creative" positions, how is this a solution for an evaporating job market?
150 million working age americans can have jobs that by definition number in the thousands? I'm all for creativity, but some people just need a job to put food on the table.
By Lawrence Lessig, who is widely praised among /. readers for his work in IP law. I wonder if his thoughts on economic protectionism will be as well received. :)
Obviously the industry is growing, but industry leaders are using every trick in the book to manipulate labor costs.
Sure, there are thousands of new jobs being created in the US, but Americans are not even given a shot at filling many of these positions.
I agree, it's not as bad as one may think, it's actually alot worse!
www.displacedtechies.com
Why? Do you think that Indians and Chinese can't be creative? Unfortunately, they can do anything Americans can do, and for 10% of the cost. The U.S. has no comparative advantage in ANYTHING, least of all creativity.
Damn right. Innovation is not entirely an exclusive property of the workforce of the USA. While the US has created, in the short term, an innovative workforce using imported talent, this is not a viable long term proposition any more than shipping skilled jobs abroad is. The author of this article is selling out the hard working American programmer.
Outsourcing is nothing more than a cynical ploy to reduce wage bills. I fail to see how anything positive for working people can come from that.
-- I speak only for myself
I'm not that old for a /.er, but I loved international relations as a younger buck. It's quite interesting to see how similar the complaints about India's outsourcing are to complaints about Japan's rise as a semiconductor (back when DRAM was the shiznit, Arabs would take that or gold for oil) and auto manufacturer. Look at where Japan is today, they certainly didn't get everything and really missed a whole bunch of the computer industry. However, there is one major difference, in the Japanese case, CEO's, upper management, and stockholders were effectivly being outsourced (as Japanese companies were started from the ground up and competed directly with American companies). However, in the Indian rise, they are working with our companies do some jobs remain here.
In the Japanese rise, there were plenty of businesses created out of nothing here that profited significantly from the growth of Japan. Done by people who took the time to learn what was important to the Japanese, not just throwing products over there. The same will be true in the rise of India. Since all of us are early to the game in realizing the magnitude of the change, we are well positioned to capitalize on any gains. Some idea's financial services (tools for newly wealthy to invest and managage their new wealth), items of cutural importance (Japanese demand for luxury goods, art, and expensive liquer) increased signficantly from 1970-2000, find a similar business exposed to India.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
This article tries to claim that a market equilbrium will take place. That the standard of living will increase forcing wages to rise, a wage setting function. This is basic economics 101. Newsflash - this is not going to happen. India is a country with such a hugh population that such calculations do not take place. If your average Indian IT worker does not like their wages or conditions then management will simply fill their seat with the 90 or so applicants willing to do the same job. The guy who wrote this article simply has not been to that country, poverty is really that bad.
Nor is protechionism a alternative since that will mean that America will be left behind will the rest of the world does take advantage of the cheap wages present in that country. This being the ultimate lose lose scenario.
The only way that outsourcing will stop is if the software industry and amercian government got there act together and createe a competitive business environment again.
Outsourcing is a result of a regression to a mean in the employment market on a macrolevel. The current state of the software market is that of monopoly. Microsoft more or less runs everything. Dell more or less controls the distribution system. Apple plays nice in the little niche they have dug for themselves. Adobe Ownz the multimedia market, In IT there is monopoly everywhere you look. Government has failed because instead of doing there job and limiting the power of these companies they have just thought with with there hip pocket. Now we have to contend will Asaian choices like Software patents, The DMCA and whatever braindead legal claptrap seems to go through the civil courts of America nowadays. Brought in only for the the benefits of the local school bully.
Imagine what things would look like if there there was a situation of perfect competition, If there where as many distributions of Windows as there are of linux. Then your job would be protected because it would be your talant that was important, and not your ablity to clone the latest fad application. You could command a greater wage to support your standard of living. Its true that alot of programmers would be still be indian but the judgement would be based on talent as it should be and not on replacing your job with some guy doing the exact same thing only cheaper as it is now. In a market of perfect competition then your job is protected because you are payed not to work for the competition. As of right now, if your job is outsourced then you are just thrown on the scrapheap. after all who are you going to work for? - and that is not right. All this in the name of managerial kickbacks.
Gee that Karl Marx guy might have been on to somthing don't you think?
Geographic location affects school choice more than money. There's not enough money in a voucher system to run a school "properly" (you need economies of scale - you couldn't pay a tutor with a voucher), so schools don't just spring up out of nowhere when theres a voucher system. They have in fact been implemented in a variety of places and education hasn't noticably improved. Know why? Because people just left the kids in the same schools.
Money for education does not trickle down properly to classrooms. It doesn't get reflected in teacher salaries. Even worse, schools (in the US) are normally funded largely by property taxes, which is just another way of keeping the "good" teaching in the rich areas. "Performance" base teaching is stupid because there's no simple metric for success, and because it would then encourage schools to ignore lower-achieving students or shunt them aside. You think it sucks being dyslexic now, wait till schools will actively try to get rid of you. Theres a whole ton of problems with educational funding (and it's not just about the amount of dollars, although thats a real problem in alot of places), but "teachers are lazy and deserve to be paid minimum wage" isn't one of them.
As for the last point - here's a pretty simple test of logic. Given, we've got a poor public education system. Given, other countries have superior ones. Should we a) attempt to emulate what others who are successfull are doing, or b) Switch to something totally new that hasn't had the desired effect when tested, in the hope that it'll be even BETTER than those other systems that our currently better than ours? Bear in mind that the future health of our country relies on your answer.
And screw quoting all your responses, it's early and I'm still tired. I'd like to know what personal knowledge you have of the education industry that you're able to place the blame on teachers so squarely. Being grumpy because Mrs. Gruder gave you detention in 4th grade really isn't enough.
It used to be that IT was "bulletproof" as far as the job market. You go to school for a few years, get out with a CS or IT degree, and you'd make 40-50K your first year. Now, see what it will get you with a dime..
I think the worst part about outsourcing is that it recursively hurts the American economy. American programmers(sys admins, help desk guys) can't get American jobs. This means that these people, now jobless, cannot buy a house, a car, whatever. So, because they now have no place to live and no transportation, they cannot get a job. See the cycle? Of course, it could happen to everyone, too, and then nobody would have a job, or everyone would work in fast food.
In short, I think there is no upside to outsourcing. It hurts our already failing economy. We can't risk walking on such thin ice.
Very true. I'm tired of this puffing up people in this country do when words like innovation and creativity come up. It's utter BS!
Most of those innovative and creative Americans came from other countries. They came to this country because it was a land of oppurtunity. It was a land of oppurtunity because it was a pioneer country. After the Euro viruses wiped out 95% of the Native American population, there was a lot of resources for a few people. Americans were innovative because they were no longer bound by the social or legal constraints that regulated previous societies.
Well, guess what. America has grown up. The pioneer country has been civilized. The job is done. Now we need to be pioneers in complex societies and cities, so we can support new industries and tools for our betterment on top of the previous ones.
America is now in the same boat that Europe was in when everyone left for this place. From what I've studied, Europe is coming up with ways that will work locally to accomplish this. What works for Europe may not work so well here, especially since our transition from a pioneer country is still comparitively young.
If you build a 1 or 2 story building, you have a lot more design options than if you build a 50 story skyscraper. People who design those big glass boxes have a lot more design constraints than Joe Architect appealing to a flight of fancy for his personal home.
Metaphorically, it's getting harder to find undeveloped land to build 1 or 2 story structures in the US. However, there's a lot of people willing to sell you their 1 or 2 story structure to build a 50 story one. We have to build on top of what we currently have.
If we are going to maintain our innovation and creativity, we need quit whining about the loss of the pioneer world and figure out how to build a better complex society than anyone else. Adapt the pioneer lessons and practicality to this complex world. I guarantee Europe, Japan and India will figure this out and if the US doesn't, we'll wind up falling behind them.
Arrogance is Confidence which lacks integrity. -- me
Surprise, surprise, teacher salaries is the problem. Who would have guessed that that is a teachers answer to the problem.
:)
That said, I'm happy to pay teachers who are worth it more (even a lot more), but that means metrics and "performance-based salaries". Metrics can handle students with disabilities and grade inflation btw (we're not talking about pay based on how many As you hand out).
As for voucher, they don't work everywhere, you're right, but in a lot of areas they do work both by getting kids out of bad schools and, to a lesser extent, getting those bad schools to clean up there acts. Shouldn't we get as many kids out of bad schools as possible? That seems logical.
Especially as efforts to clean up bad schools have a generally poor record, since firing bad teachers isn't favoured by the union.
Which will also then be offshored.
If you're building a company, and offshored labor is a lot cheaper than local labor, then pray tell why would you build it with local labor? The answer is that you probably won't. And that is how most companies, new and old, will answer the question.
The greater the availability of cheap offshored labor, the worse the prospects for local labor. And therefore, the higher the local unemployment rate.
It'd be one thing if offshoring was a gain in economic efficiency, but it's not, because the amount of human labor expended to do a job remains the same, if it doesn't actually increase. That means that offshoring has to be analyzed in the context of a zero-sum game (economics is zero sum unless there are gains in efficiency involved, because the money transactions themselves are zero-sum). And in the context of a zero-sum game, offshoring is a wealth transfer from the lower and middle classes (those who are losing jobs) to the upper classes (those who own, run, or have significant investment in corporations), because at least some of the money saved from offshoring is going towards additional payouts to the CEOs, upper management, board members, and large investors.
The move towards offshoring won't help the U.S. economy, which gets its strength from the middle class. It'll destroy it, because it'll destroy the middle class. And it might (depending on how far it goes) destroy the world economy as well, because it'll force entire countries' economies to compete with each other with only one variable determining who wins: the standard of living (the amount of resources the average person has above and beyond that which is needed to barely survive). That's because the lower the standard of living, the fewer resources being used by the population, and thus the lower the cost of that population, and thus the lower the cost of using that population as labor.
Which means that the end result will look a lot like the middle ages did: people were either insanely wealthy or dirt poor, with very little variation in between. Most were dirt poor, and little more than slaves.
Use 'slashdot stuff' in the subject line in any email you send me if you want to get past the spam filter.
OMG, those dirty foreigners are stealing all of our yucky gruntwork jobs!
Think about it. There's no way to outsource some tech jobs to another continent. There is no affordable way to replace the guy who runs around replacing busted mice with someone sitting in Rawalpindi. Some jobs require physical presence. We'll still have those.
Some jobs are so specialized that it'll be hard to save any money by shopping more widely. The top-end jobs are probably fairly safe. Only so many artists are born to any generation, and nobody can make more of them. India gets its fair share of artists, of course, but they won't be cheap either, and outsourcing is all about cheap.
What gets lost is the unfun jobs that don't require presence. Churning out endless revisions of the payroll report program is steady work and pays okay, but is it really interesting?
Finally, turnabout's fair play. Find some IT work in another country that you can do for less and "steal" one of *their* jobs. If they can do it, you can do it.
To me this seems more like replacing good creative but expensive people with adequate but really cheap code monkeys. Or replacing a five pound sledgehammer with five regular hammers. They don't serve the same purpose, but clueless managers make the substitution anyway.
If you are not allowed to question your government then the government has answered your question.
I was given the opposite advice, by a mathematics teacher about to retire who knew me well. She recommended I take my maths as high as I could, and then transfer it into whatever field I wanted to work in. That turned out to be some of the best advice I've ever received: an undergraduate degree in maths and a post-grad CS diploma later, and I'm more qualified than most of my peers. More importantly, I understand maths and can apply it in new contexts, as well as having easily enough CS to work in software development specifically (where a lot of people don't have any formal CS background anyway).
I'm also curious about this idea that mathematics opens no career paths. My peers now work in finance, IT, bio-tech, engineering R&D, and numerous other interesting and/or well paid fields. A few did go on to do PhDs, but certainly not the majority.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
"Well yes, as I have maintained in the past, outsourcing does not present a strategic long term concern for the US. Sure, there are certain jobs that shall be relocated or executed from remote locations, but even if one looks at the current trends - anything that remotely involves creativity or innovation is not going anywhere"
I think that this statement contains several assumptions that we need to look at critically. I think you will see that if we depend on this kind of thinking to set policy, we are fucked. It's an arrogant statement without basis in fact or history.. And this has been said many times before in failing empires.. It is never true..
First, I should explain that movements to 'outsource' jobs historically have come after
economic increaases in productivity that have empowered middle class workers and especially, skilled craftsmen/women (yesterday's 'programmers') Basically, its driven by greed. Productivity increases should be shared, but instead, the upper management prefers to keep them all themselves. So, in a sense, the explosion in offshoring is the executive management's revenge for the salary increases many of us extracted from them in the late 90s. (Also, where do the designers and creators come from? They have to work their way up to that point. How will they do it if the bulk of entry-level jobs have dissapeared? It won't happen. Most people will never enter the field. Those who are midway will be forced to leave it for more renumerative work elsewhere, if they can find it - doubtful, at that point..because most service jobs - the ones that cant move overseas..will be automated by then..)
But they are also making another assumption they shouldn't. That they will be able to, after training these offshore workers, be able to remain as the middlemen offering their services to others, and making a princely, easy profit off of them. That wont happen. What will happen is that those jobs and technologies will leave the US, never to return. All because of greed.
Basically, the loss of technical jobs is creating a vicious circle. People are less drawn to technical careers, (to put it mildly) and this creates a 'shortage of skilled workers' that sends the innovators in technology elsewhere to start companies and build equity.. Like Spain, Holland and England before them, the US will lose its 'empire' to other, more innovative countries if we dont stop this hemmorhaging of technical investment now..
But it may already be too late.. Those of us who like working in technology may eventually be forced to move where the jobs are.. or do something else..something boring and nonproductive.. Its our loss. If the US government turns into an inflexible corrupt protector of the status-quo - the monopolies and monied interests.. intelligent people without extensive investments or inherited wealth would be well advised to go elsewhere.. The inward-looking government will be all-consumed with erecting barriers to their success here.. Head for the frontier.. Since you cant go to America, there must be another frontier somewhere.. China, Asia, Canada, Europe, Australia..New Zealand???? Look for places where innovation is rewarded..appropriately.. The offshorers wont care at that point.. they have already made their money.. now their main obsession is preserving it... Preserving the status quo.. Fighting creativity.. At least thats how I see them.. Look at the DMCA, the RIAA, wage stagnation, the loss of privacy in the workplace (like Foucaults Panopticon), the financial scandals on Wall Street..the 401k scam, massively inflated real-estate prices masking salary stagnation, cronyism and corruption..the shifting of the tax burden away from the rich and onto the (shrinking) middle class and poor.. The signs of the collapse of an impending bubble are all there..
Thats economics 101 Its already begun..
The editorial says that Americans are more creative than foreigners in engineering advances. And that will remain America's specialty, as foreigners retain other advantages that draw some of the global engineering economy their way. But that creative edge was born in the unique global America of the 20th Century, and is now going the way of that time and its conditions.
Americans were unusually fortunate in developing a scientific culture, while the rest of the world was still mired in faith cultures: religion, racism, royalty. But those cultures failed, especially when they competed directly with America, most obviously in war, but also in global economics like colonialism. Now American scientism has spread to other cultures, like in Europe and Asia where previously at best a tiny elite indulged. And their share of scientific innovation, and its overachieving younger sister, engineering, is dramatically increasing. Note how many American science papers are coauthored by visiting foreigners. While Americans are increasingly turning to the exact bad habits that kept their global competitors back: complacency, entitlement, anti-intellectualism, faith exclusive of reason, and competition via force rather than excellence.
Americans, dominating the 20th Century invention scene, stood on the shoulders of foreign giants, some of them immigrants to America. The wave moves on, with the compliance of the medium through which it moves. If Americans keep reorienting towards faith, exclusive of science, and waste all our hard-won opportunities to lead, the wave of innovation will move to where it is more welcome. And many of us, compelled to innovate, will move with it, to foreign shores.
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make install -not war
Assuming, of course, that there is one..
Indeed--dont forget the powerful teacher unions (at least here in the northeast). 2 months off. Job security (tenure), extremely good benefits (in some cases free to the employee), a pension that you will almost never seen in private industry.
I wish I had gone into teaching.
Market awareness is.
A common phrase in Germany is: The Germans invent it, the USAmericans sell it.
We suffer more in our imagination than in reality. - Seneca
Listen to the big "L" libertarians sometime and those in the GOP who call themselves small "l" libertarian. Pretty much all they do is whine about the loss of the pioneer world.
It's not so much the loss of the "pioneer world" as it is the domestication of homo sapiens. Compare a wolf to a a domesticated dog. Or wild cats to domesticated cats. The latter are stupid in comparison to the first. They have arrested maturity. They are dependent on others for their very survival. Mankind now has all the traits of domestication. Dumber, less mature, and and dependent upon the state.
Don't blame me, I didn't vote for either of them!
Sadly what normally happens in countries with large populations like India is famine, similer to what happened in China, and what is happening right now is North Korea.
No. Famine is almost always caused by a lack of political representation. In fact, famine is often very selective, only affecting the classes that lack, or have lost, political power. For example, the last famine in India was the Bengal famine of 1943 in which there was no reduction in the levels of the national food supply. Over 3 million people died in that famine they were almost all from one specific disenfranchaised class - rural laborer.
See the writings of economist Amartya Sen for more information on this specific topic. He won the 1998 Nobel Prize for his work on the causes of famine.
Humans are dumber. Not because we have computers and flying cars. But in the sense that we are less educated. I personally have more formal education than Washington, Jefferson and Lincoln combined, yet I am nowhere close to their level of erudition. Also consider the educational biographies of Franklin, Edison and Carnegie. Babies are born with the same potential as these men, but it was beaten out of them by formal regimented schooling.
Humans have arrested maturity. Like a dog who insists on puppy-like play until its dying days, we demand constant entertainment. Since the days of cro-magnon, men and women were expected to take their full place in society by their early to mid teens. In only the last century that has been thrown out the window. Most of us don't take our first real job until the mid twenties. Adults in the America's past read Plato, Cicero and Aquinas. Adults today read comic books. We want instant gratification to all our needs and wants. When we don't get our way we whine. It's always someone else's fault.
And of course, we're dependent on the state. Government has since stopped being a dangerous servant or fearful master, it's now our parent. It provides for all of our needs. When we face a problem, the first words out of our mouths is "government should do something about it!" When you get laid off do you go to your friends, family church for help, or do you turn to the government unemployment line first? Do you know what a corporation is? It's a business with a special government privilege of not having to be liable for its actions. It's nearly impossible to run a business now without being a corporation with that government privilege/dependency.
Just like a pet dog or cat, we have traded the uncertainties of living free in the wild with the security of domestication.
p.s. I am not a Randroid, fuck you very much!
Don't blame me, I didn't vote for either of them!