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China PM Wants to Rule Global Tech With India
GrumpyDeveloper writes "As reported in this Wired story, China's prime minister said Sunday that China and India should work together to dominate the world's tech industry, bringing together Chinese hardware with Indian software.
Makes sense.
India has gained global repute as a hub of software professionals while China is strong on computer hardware. Both countries' cheap and plentiful labor has undercut the tech industry in America and other Western countries through outsourcing.
Seems as if they're trading on the principle of 'comparative' advantage, something that makes perfect sense. Software in India, hardware in China. Now, I understand that we're going to see some misguided anti-Globalisation backlash on this site. Overall, firms will then get lower prices for their tech products. Everybody will win from this.
"There's no success like failure, and failure's no success at all."
- Bob Dylan
That said, the border agreement India and China announced today seems like a terrific step forward. I'm surprised it's not getting more attention. The two biggest countries in the world have been banging heads over that border for decades.
What I'm listening to now on Pandora...
Cooperation between India and China is inevitable. Their feud stems from a small war and dispute over small threads of land. The benefits of their cooperation is far greater than the benefits of a rift, and both sides have seen this. Add this to a burgeoning ASEAN, and you have a truly global economic power.
Whether or not they succeed at dominating the tech industry is redundant. If they cooperate, even economically, they'd have a lot more say in the world than the either the US or the EU, over time.
Somewhere, there's a joke begging to be told.
Let's see if we're all still laughing in 18 months.
The gift of death metal does not smile on the good looking.
Except it isn't a matter of being unable to compete.
There is nothing lacking in the skill, talent and dedication of American employees. It is simply that employees in America have to pay American prices for rent, housing, transportation, food, clothing, education and health care. Corporations have the entire planet to search for qualified and extremely cheap labor.
If American tech workers had the entire world to choose from for sourcing out their necessary purchases for living, they could live cheaper, too. If Joe Techie lives in a country where a gallon of milk is almost $4 and the average cost of a house is $200,000 - how can you expect him to survive on the wages of someone who lives in a country where that would buy five houses?!
The gov of China knows that India is supposed to surpass them in population relatively soon. According to the CIA, by 2020 (15 years, folks...) a China/India duo would account for 36% of the global population. Western Europe plus the United States will only be 9% of the global population. With emerging economies, it is forecasted that we westerners are supposed to become quite obsolete.
China, knowing that by 2030 india is predicted to pass them in population, knows they have to act. Most of China's land mass is worthless, after all (why do you think Tiawan is so important to them?) so they have to position themselves as a solid consumer front.
The problem India/China will face: they'll be *consumers*. Being the biggest consumers has been a major harm to the US economy (trade deficits, etc). For our substantially smaller work force (1/5th-ish), we still produce twice as much as China does (see above CIA link). They need to seriously work on their production per-capita. That, and feeding those folks is already a serious problem. Production, on their end, is not just an industrial issue - its a natural resource issue.
The Western Hemisphere controls the food, and with it...we'll still control the wealth. If the US made some strong ties with South America, we'd retain power with even just 2% of the global population...put 3 billion people in an area that can only make food for 1 billion, and what does supply/demand dictate? It dictates that food prices will skyrocket, and non-food goods will plummet. Watches and games will become trivial, throw-away items (already are), but an apple...an apple will be valuable.
Really all the whining is about exchange rates and super-artificial economies.
Indian worker do not work for substantially less benefit than US workers - the trade issue people are talking about refers to a pure exchange rate problem.
One could even argue that Indian tech workers reap a substantially higher benefit than their US counterparts when you take mean deviation in standard of living into account.
This is exactly why import tariffs were invented, and curiously, this is what you get when you don't use them.
But how long will that last ? Once their workforces see the wealth that they are generating they are going to want a share of it, that is going to lead to demands for higher wages. This has happened before (see Eastern Europe).
Part of the West's wealth relies on an imbalance of income -- ie the West relies on low wages in Africa/Asia to supply them with cheap food/goods/holidays/... This is not to say that things won't change: they will -- there will be an averaging of standards of living; we in the West are going to have to accept a reduction in our standards of living or work much harder for it. This is good in global terms.
Where will the world's workhouse be ? Africa ?
BTW: Anyone remember 20-30 years ago the golden future that was painted for us -- that automation would mean that no one would have to work more than one day a week (or something like that). Whatever happened to that dream ?
Am I the only one bothered by the fact India is keeping the pro-Tibetan protestors out of the picture?
Seems money is all that matters in the world. So much for the hindus living up to the Srimad-Bhagavad Ghita. =\
Jeroen Ruigrok/Asmodai
As far as the current wages for "IT" professionals in India go, they are among the top paid people in the white-collar industry. They can afford to live a lifestyle that may be at the very least considered as upper middle class in most societies.
When most Americans hear about "pennies-per-hour" salaries (which in itself is an exaggeration), software professionals are being exploited as "slave labor" in "sweat shops". This view couldn't be further from the truth.
The truth is that "IT" professionals are being paid princely salaries by Indian standards (similar to how it was during the boom in the Silicon Valley). The cost of living in India is *way* low compared to the US. For comparison, a loaf of bread costs about 10 Indian Rupees or about 25 US cents. A large pizza at Pizza Hut/Dominos would cost about 100-300 INR, which is about 2.00 to 6.00 US Dollars. A low-cost meal in an average fast-food type restaurant would run you about 25 INR or less than 1.00 USD.
That's about all I have to say in this rant. Comparing wages without taking in the cost of living into account is crazy, but I guess it's convenient to ignore making misinformed arguments against "outsourcing" (which the corporations are responsible for, btw and not Indians who're "stealing our jaabs") and dissing Indians for being ready to work at lower wages.
An Indian-American Hindu committed to non-violent thought/speech/action alarmed by the global explosion of radical Islam
Carter was a nuclear engineer. He was also one of our most unpopular presidents. That says a lot about the American people. Heck, Bush cannot even pronounce nuclear!
You may consider this troll or flamebait, but it's still completely true, and that's what really pisses you off.
If someone says he and his monkey have nothing to hide, they almost certainly do.
Let's see if we're all still laughing in 18 months.
Meanwhile, the US has spent itself into such a massive hole that it can't keep up spending for education. Even colleges have had to turn away students because they've laid off so many staff.
An economy isn't so much based upon money, but on ideas and when there's poor education then the flow of ideas is stunted.
A feeling of having made the same mistake before: Deja Foobar
The only failure the unions had in factory jobs moving is that they weren't able to stop it. Blaming globalization on collective bargaining is absurd.
Then you are pretty ignorant of American history.
Americans were confronted with the same situation in the 1980's when the Japanese behemoth swamped American auto and steel production, leading to the "Rust Belt" throughout the American Northeast. America recovered via the IT and telecommunications industries.
We're now confronted with the same scenario as China and India move into IT industry, threatening American businesses and jobs much like the Japanese did in the 1980's.
And now, as in the 1980's, Americans worried about their jobs and their families, as would ANY culture facing the demise of industries. But we CHANGED then, and we'll do the same now.
It's called the process of creative destruction, and American industry will rise again, much like the Phoenix of lore. Contrast that with what Europe attempted by protecting its industries rather than letting them go and you'll see who had the better model.
"We're sorry, but the website you're trying to reach has been disconnected."
Whether or not they deserve their success is not relevant, though. What's relevant is that American companies and politicians are selling-out the people they're supposed to represent. Other countries would not so willingly sell out their education forces and work forces so a company could turn a quick buck with cheap labor. They may or may not deserve the success, but it comes not because American workers dropped the ball. It comes because America was looking out for number one. And number one is corporate America's bottom line - not the American citizen's bottom line.
And I'm not sure what you mean by lazy. I work 80 hour weeks and have racked up enormous quantities of vacation time as I've never taken one. Most people I know are in a similar situation. I suppose you can call that lazy, but... whatever.
See, the idea is that in a capitalist society, everyone competes against everyone else. But a capitalist society has caused prices to increase to the point where workers need a certain wage to survive and thrive in their own country. Other countries, however, not having exactly what you'd call a "capitalist society", don't have a cheaper workforce. By nature of not having a capitalist society, they are able to provide cheaper costs for the capitalists. Go figure.
Really, I don't know what people expect the American worker to do. Are we expected to just start working for 20% of our current salaries, give up our health benefits, 401ks and stock options? If so, when do we get this offer? I've seen PLENTY of people laid off from their tech jobs in favor of foreign labor and none of them were given the option of "cut your salary our lose your job".
If capital is free to move about the globe but labor isn't, then all that the owning class has to do to keep control is to keep moving from the rich, expensive countries to the poor, cheap countries. They let the rich countries become poor again, and then move back.
It's all about cheap labor, and if you think it's "Us" (the US and the West) vs. "Them" (China, India, etc.) then you have bought into the lie that the ruling class uses to keep control.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Don't get me wrong: I actually think that globalization is not such a bad thing (assuming some semblance of fair market practices - but then again, read Arundhati Roy for the dark side of the World Bank, globalization, etc.) I live in the US and because I live in a remote area I only telecommute so I both compete with foreign workers and also receive a fair amount of work from companies in India and Europe. It is all a matter of trying to stay competitive in the amount of work done per $$.
Where I think we really have problems is in our educational system. In the 1970s, most articles in ACM journals were written by Americans. Now relatively few articles are. In the US, we have the top end of the IT food chain covered - by this I mean super creativity, capital for investments, etc. Anyway, it bothers me how few young people that I talk with have any desire what so ever to pursue careers in science and engineering.
-Mark
There is nothing lacking in the skill, talent and dedication of American employees.
Sure there is. I agree with much of what you have to say, but that is all beside the fact that American workers are unmotivated and incompetent in many cases. The CEO of a company I used to work at had already run three companies into the ground by doing really stupid and greedy things that made him rich but killed the company. The vast majority of workplaces in the U.S. offer no profit sharing or reasonable incentive plan. If you work twice as hard you get paid the same, but are more tired and stressed. American employees lack dedication for a number of really good reasons. They don't benefit when the company does. They may be fired not because they don't work hard but because the company wants to cut corners or outsource. Executives usually have a different health plan and benefits package than the regular employees. Basically, companies don't treat employees very well and don't feel responsible for them in they way many used to. As a result many employees don't care about working hard or well. This is a huge disadvantage compared to some other cultures.
"we deserve to have our asses handed to us for our laziness"
According to every stat I've seen Americans are some of the hardest working people on earth. Maybe we work too hard based on our lack of vacations, crazed schedules, and heart disease.
It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
"where workers need a certain wage to survive and thrive in their own country"
Not to cut up your post too much, but the above should read "WANT (or even demand) a certain wage" instead of need.
If people were forced to work 90 hours a week at a $7 hourly job to feed themselves they would. If you disagree, well, go without food for a wekk then get back to me.
So what if China wants to dominate anything? What have they EVER done right along these lines? The success they are currently having is because they emulate the West. If they are going to do what they intend, they need to innovate, not imitate.
Since China is primarily a society of followers, I doubt very seriously they'll be able to do anything more than make themselves a player, and then only because of the volume they can introduce.
India, on the other hand, well, I see them as a force. Which is probably why China is so eager to steal from... ahem work with them.
Hmmm... Yes, there's no way that the USA would ever do anything like that, is there?
I think that it's fair to say that this is the first time in history that people everywhere else see America whining about its inability to compete.
One ought, of course, note that America has existed for only a rather short period of History thus far.
In that light, the quoted statement is really just a rather bland observation... unless of course you are so devoid of historical perspective that you think America is somehow special and will not fade like all previous empires.
In times past, the American workforce was something to admire. I don't think that's the case any longer.
That might have had something to do with having non-bombed-to-pieces infrastructure and a greater abundance of non-dead men than its European counter-parts after WW2.
Though I suppose it also might have been one of a host of heroic inimitable virtues that only Americans possess in the world.
Urgh... can't decide whether to be opinionated or ironic.
Akarsz Magyar Gentoo fórumot? Akkor
I'd hate to be stuck living in a free country, where I have to work 6 weeks less per year to have a higher standard of living. That would really suck.
Back in the 80's when it happened, people asked "but what will we do now?"
The difference between then and now is that back then there was an answer. Both auto companies laying off workers and the government stepped in and provided retraining, job search and placement assistance, subsidies for those going to college. There was assistance for those looking for a way to pull themselves out of the rust belt.
Now that its my turn, what am I supposed to do? Nobody has answers, nobody is providing retraining, and the only government assistance I've seen is the unemployment office reminding me that I need to apply to N jobs every week and take the first minimum wage job that accepts me, or they'll cut off my unemployment. College costs are climbing as both federal and state funding for both grants and loans are going downhill. I ended up with a college loan from a private entity since Uncle Sam couldn't afford to let me borrow money from him.
I'm sure America will come through somehow, but this time around it looks like its going to be a very bumpy ride.
If I have been able to see further than others, it is because I bought a pair of binoculars.
For the same reason that the US is supporting Saudi Arabia and Pakistan - both of which are fundamentalist dictatorships, and the latter a military dictatorship.
Kinda ironic, don't you think?
Ultimately, what goes around comes around.
Long long history of us whining about being unable to compete. Take a look at trade barriers set up in the late 1800's to early 1900's to allow the U.S. to set up a steel industry.
Had to keep out that nasty English and German steel, you know.
the major advances in civilization are processes which all but wreck the societies in which they occur - A.N. White
What are you calling a recovery? The northeastern United States is still poverty-stricken (and I'm not talking about the Coastal areas). Infrastructure is decaying. Many of the region's lesser cities have become the worst minority ghettos in the country. The tech industry never came to the 'Rust Belt,' and it never will.
"America" as a whole will continue to prosper, yes. But each time a Big Change occurs entire regions become scar tissue, forever useless. It is a bit arrogant to consider this model of economics to be superior to any other.
Together, we will drive the rats from the tundra.
I disagree. The collapse of the steel/auto industry in the 1980's was countered by the advent of technology and computers. In the 1980's, it was farily obvious that technology would be the next big thing. You could not convince me otherwise - I grew up then and my parents heavily pushed me into that area on the promise of a future. Now - technology is moving off-shore. I, for one, do not see the next big thing on the horizon. Please spare me the speech on bio/nano-tech. It has already come and gone overseas. What do we have left to fall back on this time? I've read the other posts and have some formal eduction in econ - I know WHY this is happening. However, do not be so naieve as to believe that a "pure" capatilistic system is the "best" way. Given enough time, it will self destruct in much the same way that communism has. An illustration of my point: In your post you specifically mention how America recovered its economy via the tech industry. Imagine what our economy would be like today if we had BOTH. Don't get me wrong - I am not anti-globalization or firmly entrenched in the idea of a "closed" US economy. However, I believe that the answer has to be somewhere in the middle. Our government NEEDS to be more proactive in regulating trade to be to OUR advantage. Take a look at some south american countries (Brazil), asian countries (China), and the EU. All are rapidly turning against Microsoft. Again, please do not misunderstand me or where I am going with this. I use Linux at home and firmly believe that it is the answer to the MS monopoly. However, it is important to recognize that what is happening is that other countries are positioning themselves to NOT rely on the US tech industry at ALL in the future. China is building its own Linux version. Brazil openly rejected MS. The EU is regulating it to death. Frankly, while I could care less about what happens to MS, what DOES concern me is that these other countries are NOT embracing other US companies like Red Hat, Novell, or IBM, but are rather moving to non-US alternatives. Wake up and smell the coffee people. Out sourcing (pick your decade/industry) is NOT the problem. Rather, it is the symptom of a larger problem with how our current system works.
Collective bargaining raised US salaries to absurd levels. Of course companies are going to outsource to other nations to stay alive. The unions shot themselves in the foot and are now crying fowl.
Then how do you explain the outsourcing of IT jobs, which are not unionized? Nobody is holding a gun to the CEO's head and making him or her pay programmers any particular wage.
Not entirely. They drove their wages far above what similar non-unionized labor was getting in this country, and constantly threatened strikes if they didn't get to push it ever-higher. You could say they have a right to try to get what they can. You could also say they should have had some foresight to realize that doing so too many times would lose their jobs. Ultimately, it did.
The problem with striking is that you put the company in a position that it's better in the short term to give in to demands, yet better long term to simply do away with you. Since labor laws in this country forbid firing a striking work force, in general, the result was that jobs moved overseas. You had a lot of companies realizing they had to give in to unions or else go under, but at the same time putting plans in effect to ultimately rid themselves of unionized labor.
Today, after lots of plant closings, the UAW has realized that they need to work together with the company to find solutions that build the business as a whole while maintaining a fair cut for them. Watch the airline shakeout now - the only airlines that are profitable are non-unionized. You think that's a coincidence? Not by a longshot.
That doesn't mean organized labor is inherently bad. But I've got to say that it doesn't have a good name in the US, because of 1) the role it played in killing some US industries earlier than they otherwise would have died, and 2) its ties to organized crime. As I said, neither of those have to go with unionization, but they did here in the US.
What a disgusting and truly saddening post to read. It really breaks my heart to see someone become so dependent on the government.
What the fuck happened to American ingenuity, to picking yourself up by your bootstraps, to working hard and making your life better on your own and with your family and friends?
Instead you whine, "what am I supposed to do?" "Nobody is providing retraining." Where is my government assistance? Why can't I borrow more money from the government?
I'm sorry, but it really makes me want to vomit, to see how far we've sunk in the last 200 years.
Ironically, the word ironically is often used incorrectly.
Is when they start innovating themselves as opposed to competing on price.
There's always going to be people who won't want to buy cheap knock offs - for example, when wrenching on the (old) Harley (the one made in the USA) I want tools that are well made, not some Harbor Freight well at least they're cheap things.
But when Ling Liong Wen Hung Flung Wuong Chang Inc. comes up with the next killer app in conjunction with RamaChandraChakraGuru Enterprises, that's when to upgrade to brown alert.
We may not be cheap, but we are usually the engines of creation. Asia does it cheap, Europe does it with style (or at least with government subsidy) - we tend to do it first and forge ahead...
--- Jump!! Fire!! Bullet time!! - Lego version of the Matrix
India has serious systemic problems in government and culture that they will need to overcome before they can be effective solving new problems.
In government, there is corruption and graft, the likes of which would take any American's breath away. This is accepted as "business as usual" by the Indian populace, who see few alternatives. The average Indian citizen has nothing to gain and a lot to lose if they are the "squeaky wheel", so everyone pretty much sits quietly and takes their share of the graft. Because of this situation, Indian infrastructure (roads, wiring, communications) is in a perpetual state of near failure. The areas where this is not the case are private networks where western companies are currently pumping money in and demand a high quality of service for their money. As soon as those funds disappear, the repairs on the redundant power generators, the satellite uplinks (made by western companies) the telecom equipment and redundant trunks (made by western companies) will all fall apart.
Based on my observations, the cultural problems relevant to tech workers revolve around attitudes towards authority and strategies of pedagogy and learning. Further, the two problems are tightly coupled and coupled with the enormous power disparities between cultural groups, which makes the problems even less tractable.
The education problem can be framed as one in which the teachers pour the knowledge that the students need into the student's heads and that's what they get. This "banking" method of teaching has been long discredited for developing creative thinkers (something that American and European educational systems can list among their strengths). If you go into a bookstore in Bangalore, most of what you will find are certification training books. When you talk to outsourcing companies about the team you might be hiring, they list certifications at you and will almost refust to discuss experience.
When you go to India to work with your team, you find that unless you can frame your problem and development approach as a series of strict single-option rules, your rules will not be followed. Rules of the form, "Either (1) or (2), whichever is more readable." will result at best in 100% (1) or 100% (2) and usually neither. When you ask about a shortcoming that you've found in a review or testing, they will ask where the problems are, then wait until you tell them exactly how to fix those problems before making changes. If the problems that you have mentioned are a part of a pattern and you point out other cases of the problem, you will find that only those instances that you specifically pointed out have been changed.
In short, until Indian technology workers start treating software development as a craft, they will only be the equivalent of the "web developer" here in the US. Until the Indian educational system teaches a craft approach to problem solving, Indian software workers are unlikely to have any success at anything other than the simplest and most motonous projects. Until the culture supports asking challenging questions to teachers and team leaders, the educational system and the products of that educational system are unlikely to change in any significant way.
I liked India. I liked most of the Indians I met (the souvenier sellers were not very likeable, except for 10-year old Madhu up there on Chumundi hill in Mysore). But aside from their personal appeal, I needed to build up an honest evaluation of their suitability for use by my employer.
My conclusion after working with them for a year and being overseas for a month of that: If it's trivial detail work that doesn't require any creativity or insight into the underlying design. If the task can be specified up front and is entirely based on widespread standards, the Indian team is perfect and will do a good job.
If, on the other hand, the module is core to the system, if the module requires careful design, if the requirements are poorly understood, if we need to have a lot
The Bush administration have steadily been screwing over the educational system due to lack of federal funding, restrictive rules.
Our education system has been screwed over by a mindset in this country that says don't do anything that might make someone feel bad. If a kid is slow at math, it's not because they're slow...the math program must be too difficult! Dumb it down! The SAT scores are low...it's not because the people taking it don't know anything..it must be too difficult. Dumb it down! We tell our kids, "If you think it's too hard, we'll make it easy as crapping your pants honey!" It does our education system no damn good, and we should be pushing our students HARD to do well in school. Make them learn. 99% of the time, all of the "challenged" kids in schools are just too damn lazy to do the work, and thus don't learn. But people in the country are too eager to "help" these kids out and boost their self esteems by sacrificing everyone else's education.
Do you think the Chinese and Indians care if a kid can't keep up with the classword? No, they don't. We shouldn't be holding all of our students back just because there are some who just don't get the material.
We have enough funds. All the money in the world won't help out education system if we keep doing things the way we are. We need to start teaching and stop coddling.
Don't take life so seriously. No one makes it out alive.
I'll take protectionism for $200, Alex.
Thanks, but no thanks. Even Adam Smith admitted that while completely unrestricted free trade benefits the economic system as a whole, it can lead to regional economic disasters. He didn't see this as much of a problem because in Smith's time there was no such thing as globalization; nowadays a 'regional economic disaster' could encompass the entire United States. The wealth of the global economy can easily increase while the wealth of the United States, specifically, declines; the health of the system of the whole improves, but that doesn't mean shit to the citizens of the U.S. who no longer have a job.
As a U.S. citizen, I'm really not interested in pissing away my country's economic power to improve the global economy. I'm far more interested in the health of the United States than any nebulous 'greater good'. People who only have the fuzziest grasp of economics seem to think that free trade will automagically improve their specific lot in life, if given time; but Smith never said anything of the sort, a fact that many people are ignorant of, or deliberately ignore, or simply lie about because their particular delusion about what 'free trade' really means is their holy grail.
There is no guarantee that American industry will "rise again". The only guarrantee is that the world economy as a whole will improve in terms of absolute wealth. That doesn't mean that any of that wealth will be distributed regionally to the United States, nor that the U.S. economy won't decline over time. Anyone who thinks otherwise would do with some solid re-education in basic economic theory.
Max
My god carries a hammer. Your god died nailed to a tree. Any questions?
And I haven't seen any comparison since you're all talking out of your asses. How about an empirical study published in an accredited, peer-reviewed journal? Anyone got one of those?
Max
My god carries a hammer. Your god died nailed to a tree. Any questions?