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Outsourcing Evolving
Shree writes "An article at NYTimes suggests that the outsourcing mantra is shifting to reasons of hiring global talent, tapping new potential minds and amassing top global human resources. Its not just software companies trying to save a buck by outsourcing; now its about Berkely trying to hookup with Tsinghua University and institutes in India, and companies like IBM and Microsoft looking to setup R&D labs in Asia."
If nothing else, this should serve as a short, sharp shock to Western governments. Why are we having to outsource these kinds of technical jobs? Most people don't quite seem to appreciate the crisis that the UK is going through in maths, science and engineering. I'm guessing the situation is similar abroad?
...it's all about the money.
In Australia we have always been short of technical talent. The company I work for has been trying to recruit 200 engineers for the last couple of years, fortunately the recent collapse of engineering in Europe and to a lesser extent the USA means we'll be filling those jobs pretty quickly.
Personally I'm pretty annoyed that we can't recruit locally, but basically our graduate recruitment program cuts fairly deeply into the available pool of graduates (ie we recruit more thickies than I'd want to). The truth is, you have to be bright and motivated to do well in an engineering course, and when you leave, there are far more superficially attractive options than working for people like me.
Everyone tends to agree that Americans/Westerns have a hard time competing with outsourcing, due to the huge differences in labor costs between the first and third world. Fine.
But what I'm beginning to see is that the real problem is the cost of housing in the West.
Yes, everyone bitches about high gas prices, health costs, etc (which all seem tend to be trumpeted by politicians with alterior motives), but these won't bankrupt you. Housing can destroy you financially if you aren't careful.
If housing was cheaper, I would be okay making a lot less than I do now. However, I'd personally be screwed if I made much less than $100K (rent is over $2000/month in my very plain, old neighborhood in California). I don't really spend much on anything else.
I'm approaching middle-age, and this is the number-one factor that I face trying to safely raise a family. Frankly, health costs pale in comparison as to how much I have to pay even to rent a halfway safe home.
I think the financial industry has pulled a fast one on us, and are milking average folks dry. The environmentalists don't help either, with their 'smart growth' policies (i.e. 'no growth').
Your hybrid is not saving the environment. Its purpose is to make you feel good about buying something.
Thus the prestige that was attached to technical jobs is gone and most people do not see them as desirable jobs.
Yet, to further the livingstandards and so on we need technical and engineering people.. in huge numbers and as smart as possible.
Today, unfortunately most smart people choose some other carreers instead.
A large company will outsource eventually if they want a 24-hour workday. India is a nice place for such companies because they can be coding while you are sleeping. Result: Projects get finished in about half the time.
Besides, there is also the financial benefits of cheap labour that outsourcing brings. Some might say that outsourcing isn't nice to those working at home base, but that's beside the point to a company when deadlines and audits are looming.
Look, big business interests are tired of waiting for politicians and public to slog through the debate morass about education reform, privatization, vouchers, "no child left behind", blahblahblah.
While Western politicians and activists babble about all that, big business is just going to cut to the chase and hire from whichever countries have actually managed to come up with educational systems that churn out needed skills, rather than waiting for this reform business to work itself out.
So dear politicians and activists, please by all means continue to wrangle in endless debate over the issues, because meanwhile your societies are the ones who may be left behind wholesale, while the fluid business interests bypass you altogether.
DESIGNED i tells ya!
Outsourcing is about commoditising jobs which a business doesn't believe are more a cost than a value to them, they move existing local jobs out so people who are paid less can do them. US firms have had R&D centres throughout the world for decades, was that called outsourcing? Or is that a term only used when the guy with the job in the other country has a different colour skin - the answer is no, it's about salaries. The controversy about outsourcing comes when the two are mixed up. For example businesses cite that it easier to hire talented people remotely. You can easily argue, well of course it is! Whether there are talented people or not. if you delegate your hiring decisions to someone six thousand miles away, whose only job is to hire people, they'll hire them. If they're not that productive, very few people in big business will be honest enough to say they made a mistake investing millions into an off shore site. Businesses can distinguish between outsourcing and talent hunting with salaries. There is no substantive reason why in the market of an international firm someone in India can't be paid roughly equivalent salaries as those back at base - if they do the same job. If it is about talent, this shouldn't be a problem right? If your senior well respected engineer in India is paid the salary of a US grad, 1 year out of college you're outsourcing.
The outsourcing of economists' jobs. Suddenly we'll be hearing how it's a terrible thing and should be stopped.
Depends what industry you're in. Manufacturing - well of course. Where you need to communicate over the time zone e.g. s/w development - in my experience it's a myth, and highly dependent on the quality of the people communicating. I haven't seen any good documented evidence of any efficiency improvements. In fact I've heard that it actually can decrease the net efficiency of your local team 40%.
It's even worse for US -> India than it is for UK->India, at least our timezones cross over a bit. I've seen simple questions been ping ponged across time zones for days, which would have been resolved locally in 5 minutes.
"Result: Projects get finished in about half the time"
Yeah right.
Perhaps it's easier never to use its. Just use it is whenever you can, then use its in the other places.
BTW It's Berkeley not Berkely (http://www.berkeley.edu/)
While I'm sure there are a few, as in, one out of a hundred, companies that believe this rhetoric, it comes across more like the idea that children and teenagers should be happy to be paid 13 cents an hour. As in, I'm not buying it, in the least.
Flame on.
Ex nihilo nihil fit.
The big picture is the real center here... Its not just about costs of labor, housing, or whatever. Since the advent of the information age and the Internet, the world has increasingly become a flat world, a smaller world, evolving toward a single community. This evolution toward flatness is stretching and pulling on national and international boundaries, laws, and business practices. Its cheaper to live in Texas then in California, and business incentives on top of that have made Texas the silicon valley of telecommunications companies. Cost of living is less than half of many places in Cal. or the New York area, so the jobs should be good... but still there is outsourcing. Government still has not given businesses the right incentives to hire from within the country, so they will save money wherever they can. If that means hiring people in a country around the world where health plan costs and retirement costs are cheaper, they will because the flat world means it is possible to do so. 30 years ago, it just would not have worked. Communication was not good enough, now it is.
The real problem is not quality or quantity of graduates in the science fields, it is the fact that governments have not caught up to the information age with their legal and business practices standards. Giving companies tax breaks for this or that but not taking into account hiring practices is one of the things that has upset the balance of wages and outsourcing. All this political rhetoric about colleges is just political posturing. The real changes need to be made at the business tax and law level of things. The government can give incentives to companies that don't outsource... but then that would be taking easy money out of their pockets... it is all about money, but not for business, its about money for government and political figures.
When businesses are given the right incentive by governments through taxation and regulation, they will pay for in-country talent, and those jobs will again carry prestige, thus garnering the admiration and adulation of students planning for their futures.
It was fine to enforce equal hiring practices by race, but for some reason its not okay to make companies biased toward hiring citizens of the country they are registered in and pay taxes in. The big picture is that politics is screwing the west for the short term gain.
The dotcom bubble and bust showed that there are times when a guy coding in his mom's basement is as good as a 120k/year engineer... businesses are still learning that the dotcom boom is over, and getting quality work and workers again costs money. It doesn't matter how many people you hire in India, there are costs associated with communicating with those workers, and instilling pride in those workers to do the kind of job that gives the company the reputation that they want.
Right now, there are tons of call centers in India (we all know and hate them) and in the interests of business, even Indian companies are outsourcing to China (of all places) to cut costs because that is the only incentive that business has... cut costs, make profit... Its time for government to step in and realign incentives for companies. Yes, labor is often cheaper, and regulations or lack thereof makes doing business overseas cheaper.. but for the same reason that, say, poisoning the environment is wrong in California, its also wrong in Yogoslovia and India, and governments should not support businesses that are involved in such practices with tax incentives etc. That would counter the effect of a flatened business world.
Well, that is the gist of it anyway.... "its the government's fault" more or less...
Okay, go ahead and show me where I'm wrong now
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The American executives who are planning to send work abroad express concern about what they regard as an incipient erosion of scientific prowess in this country, pointing to the lagging math and science proficiency of American high school students and the reluctance of some college graduates to pursue careers in science and engineering.
This is from the same bunch that won't invest in the local education system. The locals are reluctant to invest the time and effort when they know that there won't be any jobs left for them at home anyway.
There are plenty of qualified people to fill the jobs that these executives want to export. I have met many qualified applicants for many jobs that were simply overlooked because a different word was used on a resume, or there weren't enough letters in a specific title or some other stupid bullshit reason. I also know that there are many other places where one can aquire a quality education without having to spend time in a classroom. I know a lot of stuff, and most of this stuff was learned from nights spent reading books, doing the excercises and from doing experiments.
Yes, I went to college, and yes, I graduated. However, I have no formal education whatsover in the I.T. industry. The field in which I got my degree was made obsolete by all of the "Free Trade" Agreements. Even though I have no formal education in I.T., I do write code for a living and have taught college graduates in the I.T. field many things. I have also fixed the mistakes of many college graduates and yet, it is the college graduates in the field who get the credit as well as the money for the work I have done. I do not resent college graduates nor do I believe that their knowlege is necessarily any less than mine. I have worked with many smart people who have graduated college and was impressed with the knowlege and skills. However, I have worked with many just as smart people who have learned their profession on their own.
I am 38 years old, and I can definitely see why high school graduates may have second thoughts about attending college. If I had to depend on student loans in order to make it through college, I would not go. There are many people who are finding themselves to be outsourced before they have paid back even half of their student loans!!! In the Police States of Amerika, we have governments that work against small businesses as well as employees. We need to quit voting for Democrats and Republicans (in America). Both are EQUALLY GUILTY for the decline America is currently experiencing. People in other nations should also discard candidate in the top known political parties in their respectiver nations. The top parties in each nation usually have their campaigns financed in one way or another by the top money. Top money is what these lawmakers end up working for. It is time to change that, one way or ANOTHER!!!!
My message to Phillipeanos and Indians is that I do not doubt your capabilities or your smarts, or your willingnes to work. There are good, bad, ugly, pretty, smart, and stupid people in every country in every part of the world. From the media such as newspapers, TV news outlets and other places, you have most likely heard that most Americans are stupid, lazy, do not care about a thing, and live lives of luxury. This could be further from the truth! Most of my fellow Americans work two jobs just to make ends meet. Right now Indians and Phillipeanos may be experiencing an economic boom, but I guarantee that the outsourcing of your jobs is coming within the next few years. When the multinational cartels find other smart people that they can exploit for a cheaper price, then that is what they will do. You and your families be damned as far as they are concerned. The executives will then claim that they cannot find "qualified" people in India or the Phillipeans and are "foced" to look elsewhere. This is what happens when what is called "money" has it value arbitrarily set. When small time money printers print money, it is called "counterfeiting." When governments or Federal Reserve banks do it, it is called "Monitary Policy." The paper based currencies of most nations are backed by nothing, so the real value of this currency is almost nil. Talk about the blind faith of the religionists around the world. There is more blind faith being demonstrated on payday than any other day of the week.
One way to stop it is to outright allow every US Citizen (by birth, to help prevent Internationals from endrunning it) unencumbered access to any US University, ending the distinction between public/private.
You just apply, prove citizenship and attend - with the admissions capped at 10% of whatever the Internationals pay. If they want to take jobs, it's only right to protect our own as they protect their own in their home countries.
If this continues, you raise the rates for Internationals and decrease the rates of the Domestics.
You dont have to touch the educational standards, just have to keep the doors open for domestic students who seem to be shut out from meaningful education.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
n/t :)
May contain traces of nut.
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Slashdot at its weekend best.
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Let the slashdot readers go back to blasting the Indians and the asians. How pathetic and incompetent they are, if it was not about the prize they would not get anything to do, we are so great they are so bad, blah blah blah
...there is certainly a ghetto some place near where house prices are much lower. One advantage of an expensive neighborhood is that your next-door neighbor is far more likely to be called Dr Cohen than Doctor Dre. If prices there were not so dear, people other than prosperous, well-socialized professionals would eat your children for breakfast, more or less.
...they actually have such a system in Britain.
While Western politicians and activists babble about all that, big business is just going to cut to the chase and hire from whichever countries have actually managed to come up with educational systems that churn out needed skills, rather than waiting for this reform business to work itself out.
Wrong. Big business does whatever gives big business the biggest buck fast (within the next quarter). Meanwhile the capital is eating itself. More and more people are not running for the money but the self-inflating money. Money is the only good that doesn't lose but gains value when put on a shelf. A bank account that is.
This kind of business makes sence in the short term for an individual business - given money won't get worthless someday. In every other way this course of action is descructive and shortsighted, benefits no one and damages all. And that's no 'debate morass' - it's a simple fact and can be found by taking a closer look anywhere in the world.
The Bottom Line is:
The 'free market' as we know it today has flaws. Not huge ones, but flaws that give to much power into the hands of to few without anybody really noticing it. This will have to change, globally. Because if it doesn't global economy is going the way of the dodo. I actually expect something like a global currency within the next 30 years. The only question remaining is: Will the people have to learn it the hard way or will they be smart?
We suffer more in our imagination than in reality. - Seneca
Wasn't the explosion in communication technology supposed to free us from our desks and allow us to roam across the blooming meadows, palmtops in hand?
Oh yeah, there's still a whole bunch of old dudes running companies, who have no idea how communications technology works. I guess we'll have to wait for them to die.
Seriously, though -- the only things standing in the way of people officing wherever they choose are the inflexibility of management and the inability of employees to make effective use of existing communications tools. Hm, maybe one begets the other. Perhaps the old dudes don't have to die so much as they need to insist that their companies embrace technology, even if they're too late to do so themselves. And back that up with consequences.
Web 2.0 == Giant Blogspam Circle Jerk
How much have you paid a peasant lately? Let me guess---nothing.
Networking seems to be accepted as the easier of the two professions, though I personally feel more comfortable with networking because there is a physical medium that better ensures job security. Programming is tough and the skill is worthy of recognition (if the person's competent), but it CAN be outsourced. Networking can't be.
Unfortunately, outsourcing is becoming more and more a concerning factor when weighing career paths.
I am reminded of a conversation I had several years ago.
Friend: "Come move up here to Colorado. Lockheed is hurting for C++ programmers really bad. I can get a bonus if I hand in your resume and you are hired."
Me: "Sounds good. What is the pay scale?"
Friend: "Um.. Uh... That's why Lockheed is hurting for C++ programmers...."
The real reason for outsourcing is macro economic efficiency. In true free trade its the last denominator that companies can do nothing about internally as its an external factor.
Like it or not its the reason why china should not float their currency and the reason why countries like Singapore have managed to survive in a very competitive technical sector. In countries Like the US,UK and Australia you may pay an engineer more but the engineers themselves don't benefit due to the high living cost. The high living cost is attributed to the high proportion of non-productive sectors in an economy compared to productive sectors. Productive sectors would include the likes of Engineering,manufacturing, mining,agriculture while non productive sectors are largely the finance sector and bureaucratic sectors. In essence productive sectors support the non productive sectors(eg you cant eat money if there are no farms).
I will give you an example of what has happened in Australia recently. In the last 10 years the cost of house ownership(and thus rent) has gone up hugely. Incomes have gone up to match, but once the cost of paying for a house is taken into consideration, what is left over in the income has not gone up, often down. Take two people bidding for a house. In order to get the desired house each bidder goes to the bank to secure the loan. Thus due to bidding competition each will try to obtain the highest possible loan possible but from the same bank. Thus the bank increases the price of housing by giving larger loans and increases its profits due to interest on the loans. In the end the productive sectors of the economy must provide high pay jobs to support the high value loan to provide the bank with a profit.
So why should a company pay for bank/financial sector profits when in a country with a lower cost of living they could pay the same amount and the engineer would benefit much more as they would actually retain the wealth. Otherwise if the company does pay the engineer less the engineer would still attain an equivalent living as one on a much higher income in a high living cost country.
Take a country like Singapore for example. Here the government heavily controls housing. Singapore doesn't have much choice if you look at the population density however they have benefited greatly due to maintaining a low living cost. Essentially the government here controls 90% of the housing as government housing. In order to get his housing you get a government loan which is not designed to make the government profit. They call it subsided housing, but its not really subsided. The prices of houses cover the construction cost, they just don't provide profits to the financial sector through high interest loans that artificially inflate house prices through competitive bidding.
The result is you can hire an engineer for a lot less in Singapore than you can in the US and the engineer still has an equivalent life.
The second example is China. As a developing country china has a very low cost of living. In much of the country no one expects to gain a high level of profit from housing. As a result in these areas you can set up a manufacturing company and by default be competitive due to low living costs. Should the Chinese government float their currency, from the point of view of foreign-non Chinese currency, the cost of living will rise dramatically. Through this rise, locals would suffer from an increase in relative living cost due to the lost competitiveness. They only institutions set to gain are the financial ones as they will make massive profits of the rise in the Chinese currency. That profit has to come from somewhere and thats the productive sectors of the world economy. i.e. engineering.
Thus when you see outsourcing, don't blame the engineering companies- they are in a loose loose scenario. If they don't, they loose due to foreign competition, if they do they will fail due to a faltering local economy.
Blame the non productive financial
You cannot have housing be both a major component of the cost of living and be a good long term investment (i.e. do better than inflation of which cost of living is a major component). The more people over extend their finances in order to be able to buy a house, the closer the housing bubble gets to bursting. The people who make money in the housing market are the ones who get out early, same as in a Ponzi scheme. In some respects, it's worse than a Ponzi scheme. At least there you only end up broke. When the housing bubble bursts you could end up worse with negative equity. Which with the new bankruptcy laws you may not be able to walk away from.
The reason that most students do not go into engineering or technical fields any more is that they see the writing on the wall. They have seen friends and family members jobs already going over seas for the last ten years slowly but surely creeping more and more into the pocket protector fields. Medicine is next with the insurance companies looking to fly people to India for selective surgeries. Right now people are flying to India for surgeries that are not covered by their policies and getting the same results for a 20th of the cost. Some hospitals in the U.S. are contracting with radiology firms in India to evaluate X-rays from digitized images - I know this because a relative of mine who is a Doctor has seen it at the Hospital He's doing his residency at. There is a since of Doom and Gloom in the U.S. about meaningful careers. I wonder were will it stop. Will U.S. air traffic controllers be setting in Main Land China someday because someone thought it was a great idea to develope and install (on the tax payers dime) even faster and practically instaneous latancy connections to them. Some may believe that I think less of those in other countries and guess what your right. I have that rare disease today know as Pariotism. When governments and citizes alike in other countries take care of there own by changing laws or creating tarrifs and actually enforcing trade agreements it's just fine. When the U.S. does the same thing (or attempts to) watchout, we are seen as emperialistic, uncaring, economic fear mongers. The U.S. has become the economic and educational whipping boy of the world. Everybody and anybody can come here and reap the benefits of our education, free society, enormous business grants for immigrants and when they are fat and through sucking the tit completely dry they leave taking back to their country everything they have earned and learned. Don't get me wrong - immigrants have made this country what it is today but it is the immigrants of the past that have done that not mostly the ones that come into this country today and recently. I am third generation Polish. When my Grandparents (on my Father's side) came to the U.S. my Father was already 6 years old and spoke Polish for that of a 6 year old. After arriving my Grandparents wanted him to learn English and they themselves took classes to learn English. Today my Father speaks very little Polish and I speak about 5 words of it. We recognize ourselves as Americans first and of Polish decent second. The lack of this desire to become apart of the American Melting Pot is one of the main problems with our country today and echoes into our government, education, society, and economy. My Grandparents came to this country to not only have a better life for themselves and their decendents but to be Americans. Our schools have been forced to have 3 and sometimes 4 translators in the classrooms because no one thought it important to learn the language of the country that they are in. We even have translators in the military, not for teaching English but for actual combat situations to commincate to our own solders. We have ballots printed in California in 23 different languages. What better way is there to keep our country divided than to not have everyone speaking english. And that is the problems with politics. Many politicians do not want members in their disticts, of a specific persuasion, to be forced to learn English. They would then not be the only candidate that those voters could understand. This country is so divided that it is starting to lose a since of itself. I constantly hear others that have become U.S. citizens that their country is a great country to which I respond "Yes, the U.S. is a great country" but they correct me by telling me they were speaking of the country they originally came from. I sometimes respond "If it is such a great country that you came from then why are you here?". At the beginning of the Conflict in Iraqi when the French Government made some very misguided comments about the U.S. how did U.S.
The real problem is that the people at the reins of power act like they are doing things only for themselves. So instead of saying 'work with' these other people, groups, whoever they are, they seek to treat the ones who they contract to do the work as if they are expendible. As if there is no implied social responsibility to people of their own country.
This is an attempt to return to a fuedalistic model for government.
Fuedalism in the modern world will not work. When you treat workers like they are dross, expendible, you create class warfare which is failure all around.
And so why do these monied, powerful groups do this? Because they are moral reprobates who believe in somekind of primacy of their own kind, whoever they may be.
What happened to the Romonov's ought to be reason enough for these so-called rulers to stop doing what they are doing.
It is a matter of fairness and equality of human effort. And when people make arguements like 'there is no right to health care' then I ask the question: why the hell should we give tax breaks for health care for one group and then not give any health care for another?
And if you think that is fair then you better watch out because there are live Marxists roaming the globe who want your head on a stick. And your currupt outsourceing and treating workers like they are cattle empowers these people.
Marxism ultimatly is failure. It does not work, will not work. But equally flawed is the corporate fascism that is so popular these days. We are suppose to be communial in some things, like paying for wars foisted upon us by currupt elites, but in other things like health care we are suppose to think that if we can't have work that we don't deserve it.
There is too much power in too few hands. These people need to be put out of government
Impeach Bush, Cheney, and remove the neocon stain from our government. These fascists have had long enough.
Most civilised countries do provide healthcare of some form, and most of us would recognise that when one person has health and wellbeing, while another is sick, purely because of monetary issues, that's poverty. Being entitled to healthcare by others is NOT the same as being entitled to FORCE others to provide it. Those are very different concepts. The first is simply living in a society where people help you when you're in need, much like you help them. There's no need for force, because, having helped them, they are glad to return the favor. It's how all close-knit communities work, and the only reason it doesn't happen in large western countries is because we forget that everyone is in the society together.
Comment removed based on user account deletion
This is really another reason why copyrights and patents are so harmfull. The US has a big technology sector, but pretty soon the world's will be way bigger. By upholding copyrights and patents, we will eventually lock ourselves out from innovation and progress all over the world. IMHO, the copyright system is already dead and will probably formally be so betime it becomes an issue, the patent system though - I worry that it will be too late. Just like false physically coerced property rights like slavery in the industrial era only died after great violence, patents will likely die a hideous death.
I don't see why big big business executives care since they're international anyway, and they can go where the talent is in other (non-US) countries. As long as they have markets in other countries where their workers are, then you have some sort of balance, right?
But if your market is in the US, and (lemmie do the math here) you remove US residents' ability to make money, then you're killing off your market. OTOH, if all you do is reduce the incomes of US citizens, then as long as you're not stuck selling just luxury goods (except for phat stuff that kidz will buy anyway), you'll still make money!
So keep shipping those jobs overseas!
DT (with tongue firmly in cheek)
Is this thing on? Hello?
IMHO, the economic fundamentals do not favor China and India making a smooth transition into the world economy. I think that both China and India will become a large part of the world economy someday, just not as soon as most people think.
First off, if you look at the infrsatructure of these countries, they are very small compaired to the size of infrastructure in the western world. Which I'm sure they will catch up, but infrastructure is expensive and the US has over 100 years up on them.
Second off, if you look at the political freedom rankings of these countries, many of them are in really bad shape. This is very important, because countries with political freedoms have outlets for the stress cuased by growth and change. China especially, could be explosive.
Third off, if you look at the economic freedom rankings of these countries. They are also in really bad shape. This is extremely important, because economic freedom allows peoples to exploit opportunities to create wealth and prosperity. I could really see a situation where all these cool technologies get developed all over the world, but they only get applied in productive ways in the free and western countries. In China, general tax rates are as high as 40%. (The US is pretty bad too, but already has a middle class(for now)) But there is no way that you can have high rates of sustained growth under those kind of taxes, because there is no way to build an economic middle class.
Fourth off, IMHO the economic shithole that the US is in is temporary. Currently the US has more debt than it can ever pay off, and is about ready to fall off a hyperinflationary debt cliff. However, once the financial system collapses, and they push the reset button, the path will be cleared for sustained growth. Half the government freebies will be dead, realestate will collapse and become reasonably priced, the debt will be offloaded, the currency will likely end up backed by something other than the good faith of the federal government, and taxes will be low. That combined with the higher level of economic and political freedoms will position the US very nicely. Hopefully, the US will also open the immigration flood gates, bringing intellignet people over here who will even create more jobs and oppertunity - getting more bang for the buck.
The society that builds and maintains the information infrastructure will be the superpower of the 21st Centuary. This is the greatest threat to national security since the cold war. Americans were afraid of the Soviets becoming technologically superior. Why aren't they afraid of Communist China becoming technologically superior? Is it because China only has 10 times as many people as America and Rusia put together? Is it because China's army is only 100 times larger than ours? Is it because China only has as many nukes as us?
Enjoy the fragrant tail of the monkey, United States.
There is just so much value in working closely with people. Bandwidth is one; picking up on the subtle messages is another. Easily exchanging what may seem like tangent information, which turns out to be critical, is another.
This is the main driving force behind increasing the H1-B limits (and the staggering abuses of the L1 visa program). If it was just about cost, there wouldn't be any need for any H1-Bs. Rather, it's about cheap labour on-site.
There simply is no substite for working closely with your team or customers. None. And until communications technology can bridge that gap, Offshoring is going to be limited. Even then, the 12-hour time gap will still be a hinderance.
But email, Blackberries, and cell-phones will never cut it.
Read the works of Marx, it says the same thing. Look how much good that created in USSR and Eastern Europe. Some utopia that was.
I work in the IT universe, so the first wave of outsourcing is nothing new to me. Often, it's simply to save money, and damn the quality. This is especially true for mundane, tedious stuff like maintenance of legacy code. However, I'm starting to realize more and more that the average "IT guy" in the US isn't the same an an overseas IT guy. The foriegn workers tend to be smarter and harder working than their US counterparts, and they usually have better academic credentials. I'm guessing it's because education is a higher priority everywhere else. I think parents would be well advised to push their kids to study more if they want to compete. Some of the outsourcing projects I've worked on have foriegn workers who are just space fillers, but the vast majority have workers who are absolute robots, cranking out 12-14 hour days all the time when an emergency happens.
Outsourcing scientific research is just the next step. Science and technical students here are freaked out about living a life of perpetual unemployment. I graduated in the late 90s, and even then having a science or engineering degree was considered at least a step in the right direction. We laughed at all the psychology and businsess majors who treated school as a 4 or 5 year party and said they'd never get jobs. Now it seems like they have the upper hand in management, which I think is probably the nnly "safe" job. I can understand why students entering college today wouldn't want to study math, science or engineering, simply because they know they won't be able to make a living in the future. Either that, or their business student peers will be making 4 or 5 times their salary in a management job. Now companies can't find talent here, so they outsource to somewhere that has a higher work ethic and much lower salary. Double bonus for them, big loss for those of us who are scientific and not destined for the ranks of management.
Unfortunately, I don't see anything short of a decree from the top that will stop this. Even then I have my doubts. Imagine if the president got on TV and told everyone that we're losing our competitive edge by becoming a nation of service workers and manageers. I don't know if anyone would listen.
We need a big-time project like the Apollo missions in the 60s to get everyone believing we can actually compete again, and then maybe the trend will reverse itself.
Why do you think the US became such a science and engineering powerhouse? Because the farm boys that lived in this mostly rural nation were so smart? Because Harvard was such a great school for country gents? The US did have its pool of US-born talent, but what made the US so big and powerful was smart, education-oriented immigrants and their immediate descendants. In particular of the post-WWII technology boom was fueled by European refugees (as well as by the lack of competition from a world in shambles).
Guess what? They are seriously considering other options. Why? Because the US has become a less attractive place to live, because academic funding in the US is getting worse, because the focus of US science and technology is blowing up things, because their countries of origin have become more attractive, and because the US has become so xenophobic that US voters are increasingly keeping out the talent.
The US population has gotten an unfair share of the world's talent for the past 50 years. The US will have to get used to competing for talent globally: there are a lot of nice places in the world that don't have Bush as a president, that do value science and education, and that are cheap to live in. The US still has a lot going for it for smart immigrants, but it's not the only choice anymore.
In the end, it's all market economy: which nation is making itself the most attractive to the part of the global laborforce that brings in the most amount of money.
The headline should probably have read, The Evolution of Outsourcing
Did you mount a military-grade, variable-focus MASER on an unlicensed artificial intelligence?
"Evolving has become such a hassle; let's get those small rodents to do it for us."
Why are we having to outsource these kinds of technical jobs?
Because other nations are beginning to figure out that the talent that the US used to syphon off is valuable and they are doing everything they can to keep it/attract it. In the past, the US got a very valuable resource very cheaply, and that's inevitably changing.
Most people don't quite seem to appreciate the crisis that the UK is going through in maths, science and engineering
Average high school education may suck, but at the top end, the UK is producing a significant number of the highly skilled immigrants to the US. And, in this case, it's only the top end that counts. If the UK could figure out how to make life in the UK more attractive for them, maybe they'd stay. What would the UK need to do? Massively increase academic salaries, massively increase government research grants, change the laws to encourage more high-risk high-tech investment, and get rid of any vestiges of nobility and hereditar privilege (the last step is mostly symbolic, but an indication to people that the "self-made man" is more valuable and important to society than someone who inherited a title).
Don't our lawmakers understand that this communist style approach to government will only drive businesses away?
You're making the fundamentally wrong assumption that outsourcing at the level discussed in the article is driven by cost. IBM and Microsoft are going to India not because it's too expensive for them to hire Indians and move them to the US, but because it's becoming too difficult (in a way that no amount of money can fix).
Dismantling the US safety net even further is only going to accelerate outsourcing: the more brutal and socially irresponsible the US appears, the less attractive it is to many immigrants. In particular, highly-skilled immigrants coming to the US don't want to have to have a business degree in order to figure out health care or retirement.
In any case, you seem to think that not requiring health care benefits or retirement somehow saves money; it doesn't. Those services still need to be paid for, and if they aren't paid for by companies, they need to raise salaries so that employees can pay for them. Of course, at the low end, companies may use lack of such requirements as a means of cutting salaries, but they are simply cost-shifting: since we generally don't let people die in the streets, health care then ends up being paid through taxes, at a premium rate.
Granted, I think employer-supported health care is broken, but not for the reasons you likely would agree with; what we really need is tax-payer funded universal health care.
Result: Projects get finished in about half the time.
I'll have to agree with sbrown on this one. We have had the same outsourcing agency working for a particular department for several years now. Besides the empty promises of quick turnaround on projects (they have several that were simple and haven't been finished for years now), they keep piling on more and more work. All this tells me is they are trying to fill up a backlog so that they can suck more money from the company.
The only reason any company really wants to outsource is this: money. The problem is, the government hasn't realized the income it is losing because of this issue. Since the income goes out of the country, there is no income tax to collect (lost government income), the wages are used to buy goods and services in other countries (a shot to the US economy), and the sales taxes on said goods and services are lost since they are purchased overseas (yet more lost government income).
Then, we get problems like those mentioned in other posts, like higher taxes and such. This is what happens when government loses income, it makes it up by further taxing those who are already over taxed to begin with.
It's a vicious cycle.
Nam et ipsa scientia potestas est - Sir Francis Bacon
You are no more entitled to health care at other people's expense, than you are entitled to force other people to feed, clothe, or shelter you.
Yes, and you are entitled to having other people feed, clothe, and shelter you when you are unable to do so yourself. That kind of social behavior and group support is what sets humans apart from lizards. It's what has made humans the dominant species on the planet despite us being physically weak and unimpressive.
Outsourcing evolving? Outsourcing jobs like telemarketing is one thing, but this is a matter of national security! If we move all of our evolving to India, nobody here will be! The Indians might evolve into superhumans before us! Worse, microevolution is critical to keeping the immune system up to par! The next plague could wipe us out, and India would be left all the stronger!
This is why corporate greed is destroying America. Sure, it could be cheaper to do all your evolving in India, but think of the consequences!
Sigh.
Even if your home doesn't increase in value you are still better off owning than renting,
Unless of course, you end up in Golden Jail.
Because your property tax is set by the value of your property when it was first purchased, having rising prices all around can lead to you become financially trapped. You can't move up or down the market, nor do you want to leave the market.
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
My thoughts exactly.
I was busy wondering what company that might be, until I figured that it was just a spelling mistake.
http://www.thebricktestament.com/the_law/when_to_
All of the jobs "no one wants" are going to illegal immigrants, and the jobs people really DO want are being outsourced. What is left? At least be honest, America is screwed...
I outsourced my work during college but still got a degree. Now I'm outsourcing my own job. I get an assignment, I send it to some really good engineer in Asia, I tell him to make a few mistakes, and I give it to my boss. No one notices. I give the engineer enough of my paycheck that it's a really good salary for his country, but I still get to keep much of mine. I get to do very little work and get paid, the engineer who does the work gets paid, my employer doesn't notice the difference.
Stupidity is like nuclear power, it can be used for good or evil. And you don't want to get any on you.
Actually they can, it would just be extremely expensive because they are in such limited supply. So I don't know where the "it would be cheaper to employ people to do it" is coming from in your comment.
The supply of mathematicians doesn't magically increase just because you decide to pay them more. If there are 10000 available mathematicians in the UK and 20000 are needed, then 10000 jobs must be outsourced, no matter how much the UK employer decides to pay.
And a population of 60 million people only produces a limited supply of highly-skilled mathematicians, no matter how much education you throw at them.
Did anyone else read this as "Outsourcing Evolution"?
Darwin would have a fit over this!!!
I don't moderate anymore. Karma penalty for 90% fair mods? Can I mod that unfair?
Sorry for my fast-typing. Yes I mean't Berkeley -- I guess I'm spoilt by spell checks and IM. -Shree
If housing prices in California are too high, make the market and move to a place where prices are lower! Midwest cities have excellent high tech opportunities and less expensive housing. I own 3 beds and two baths on a quiet acre for hundreds less then what you are paying in rent. With my big SUV, life is grand!
an ill wind that blows no good
"Put your degree last"
The slogan of every job recruiter in the business. Let's list all the education that business has made worthless, shall we?
Art
Art History
Chemistry (without an advanced degree)
English
Literature
Anthropology
Biology (without an MD)
Business (without an MBA)
Linguistics
Physics (without an advanced degree)
Music
Geology (without an advanced degree)
Psychology
Sociology
History
Ancient History
Philosophy
Drama
Theater
Dance
Think about it. Guy shows up to apply for a job with a PhD in History. What is the recruiter going to say? "I'm terribly sorry sir, but you obviously don't have the skills to advance a Powerpoint presentation and attend meetings." Well, of course not! He had the skills to produce a Master's Thesis and graduate as a Doctor of History, but he obviously can't comprehend the phenomenal complexity of supply chain management.
Additionally, any attempt at an advanced degree other than a M.S., M.D., J.D. or an MBA is instant disqualification from any job except as a professor. Business complains that college graduates don't have the needed "skills" yet never quite explain what those skills are. Yes, I'm sure it takes great skill to wedge an ass into a molded chair in a conference room and be skeptical. It takes great skill to say "it will never work." Then again twelve publishers passed on Harry Potter, so I'm sure all those managers are brilliantly competent since their education obviously came from universities on Jupiter.
It's all about stuffing their pockets with other people's salaries. These businesses have nothing but contempt for their neighbors unless they can scoop tall dollars out of their wallets. The educations of millions are being wasted on purpose. My only question is "who you gonna sell $7000 televisions to when nobody has a job, genius?"
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
The American executives who are planning to send work abroad express concern about what they regard as an incipient erosion of scientific prowess in this country, pointing to the lagging math and science proficiency of American high school students and the reluctance of some college graduates to pursue careers in science and engineering.
I don't blame the students. Who wants to bust their ass to compete with $5/hr engineers in Cheapbuckistan? We need carrots, not sticks. If you have an academic knack, then being a lawyer, financier, or even a business manager is more lucrative in comparison. Compared to other options, sci/tech pays poorly in the US. People choose careers based on their comparative options. Sci/tech is a better option in Cheapbuckistan than being a lawyer or biz manager, for example.
Further, most of what is taught in school is not even used much in the real world. Many practicing engineers will tell you this.
Table-ized A.I.
America is the only nation in the civilized world that believes "health care is not a fundamental right", right? Nobody else, no matter how bad their health care waiting lines are, wants to adopt America's way. The operative word here is "pariah". Look it up some time.
--- Grow a pair, liberals... stop letting the Republicans bully you!
China has approximately twice the combined populations of Russia and the US.
Even though I am heavily interested in computers, I am currently double majoring in math and physics at a local community college.
For the past 3 years, all the science departments have made cuts in courses offered (except for biology for some reason). For example, computer science students are now forced to take online courses for several required classes. 3D Calculus has been cut to only one classroom instead of the previous two when I took it. Same thing with Physics of magnetism and electrostatics, which I am currently taking and so far only accommodates 16 people.
I'm assuming that all serious engineering majors will take 3D calculus and physics; that equates to 16 potential students that might graduate with me. And that is only for an A.S. degree. The community college I attend is also number 1 in students transferring to UCLA and other top local universities in southern California, so that number for other community colleges is likely to be less.
Only 9 years ago, the physics department was booming. According to the department chair, they actually had adjunct faculty (for more classes than the tenure staff can handle) and a laser program.
What is causing students to major in something other than engineering? Is it the threat of outsourcing or, in the case of the USA, the anti-intellectualism of the Bush administration? Or maybe engineering is too old school for gen X. It really irks me to see how much the sciences have gone downhill in only the past 3-4 years.
Is this to appease the religious whackos?
Take three teams: Team 1 are based in the same location, same office, they know each other face to face and know each other well. Discussions can take place face to face, every so often on the phone when one is out of the office or in email or in tha group database. Team 2 are in the same office but they are distributed around the building, they have occasion face to face contact, meetings will be arranged so everyone can sync up, the phone and email are often used. Team 3 are distributed around the world, they my never have actually met face to face. Some of the team members have a average command of the primary language in either written or verbal form. Communication is mostly via email, because of the time zone difference. Which team will win? For all the hand wringing 'good teamwork' stuff, most people would bet on Team 1. Whether you like it or not, communication over timezones is very expensive. Any business process designer would be able to tell you that.
and companies like IBM and Microsoft looking to setup R&D labs in Asia
:)
China is projected to produce 60,000 engineers this next year while the United States is set to only produce 7,000. It's no wonder Microsoft is bitching about the lack of engineers and moving camp to Asia.
And the kicker of it all: We are paying for these foreign degrees because of our extreme debt to China; to whom, the United States government pays about 5 times (approximately) more in interest (INTEREST) per year than it pays in total for education of its own citizens.
And now there is a bill being introduced to raise the debt limit once again (for I think the sixth time since GW has been in office) so that we can borrow more money from the Chinese and wind up having to pay them back even more interest next year.
I hate to think it but if the budget does not get balanced (which it hasn't been since Clinton in '93) and the United States sprials farther into debt it's only a matter of time before the dollar becomes absolutely worthless and we go into a huge depression.
NOTE: Some of this information may or may not be accurate. I picked it all up from watching C-Span.
Someone should mod you up, I just don't have any mod points. Sorry. :)
Tired of all the isms, don't exploit people as an employer, or a government, mmmmK?
visit warren, ohio in order to see the end result of outsourcing...
duplexes for less than $10k.
thousands of homes not even inhabited.
that's where the powers that be want to take this coutry.
In neither case are these people very interested in a safety net. Also, it has been US policy to push away people who are coming to this country who are coming just for social services.
It's not about the safety net for the immigrants, it's about what kind of society they are moving into. Immigrants are increasingly put off by the lack of safety net for others--by the lack of civic-mindedness and civil society, by the drug addicts, violence, mental illness, dirt and homeless in the streets, by the lack of good schools, and by the racial and social conflicts. That's in addition to the paranoia and xenophobia that's sweeping the country.
Bank employees cash checks. Landlords cash checks.
Engineers build things.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Find answer to this question and you would solve all financial and employment issues.
Unless of course there is more to the world of banking than you realize...
Mathematics is made of 50 percent formulas, 50 percent proofs, and 50 percent imagination.
The wall... of text!
<p> is your friend. Love it, use it. <p> and preview should be your best friends. People will thank you and actually see your posts instead of zoning out at the enormous block of text.
Oh really, is that all it is?
Yep. In fact, the bank industry is so automated at this point that there is absolutely no need for any thought at all. There is not one ounce of humanity in the bank industry. If the numbers add up, the dollars are tall. If the numbers don't add up, the dollars are small. End of story.
Wow, then I just had an idea that could solve your little unemployment problem.
Oh good. Let's patronize unemployed people, shall we? That will surely help us all succeed.
You surely are competent enough to cash a check, right?
Is that a marketable skill?
Unless of course there is more to the world of banking than you realize
Yes. Don't forget the meetings, and the catered steamed lobster for lunch, and the expense accounts, and being paid to sit and talk about golf all day on the phone. I would love to see a list of the "marketable skills" required to make a six-figure salary at a bank. That would be entertaining.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Er, so if it doesn't take any skill, then what exactly is keeping you from entering this world of seven-digit salaries you fantasize any old "cubicle drone" may inhabit? Pride? Self-pity? Waaah.
Dang. Obviously someone hasnt seen the wrong side of exploitative (US style) globalization - maybe you need to come to the Rust Belt and other parts of flyover country, instead of just dismissing it as Someone Else's Problem.
Well, the deep nationalistic feelings are quite mutual in at least one H1B country (China, possibly Japan, with others).
Who pays - not just internationals, but a portion of taxes and cut rate tuition (cut something from another govt department) would also pay for it. Besides, I dont see much in reciprocation from China and India, having no need to have an international take my spot for no return, just a low quality, 2nd rate job fixed by the domestic that would have done it right the first time.
As for the other nations, it's a matter of how much they reciprocate back to allow for mutual growth.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
And how are you going to even increase it in the first place if the only places to effectively bootstrap the public cant be broken of their exclusionism?
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
Anyways, if you look at the situation from a purely statistical point of view there are a much larger percentage of people in those countries with high potential(raw intelligence, due to the large population) so the large multinationals can "cherry pick" the top .1% of the graduates to do jobs that would normally go to the top 30% or so of American graduates; so of course they can do them better(and cheaper). The multi -nationals are just looking for the best human capital value and due to the speed of communications the geographical advantage for US graduates is decreasing rapidly.
Well, more reason to turn all education in the US to a system where a citizen can get higher education as easy as it is to get water from a tap.
Internationals would just have to have some visible multinational sponsor them, and consent to monitoring which any citizen can obtain and use similar to credit bureaus. Not the best way to do it, but with this kind of government, you have to make an pro-globalization endrun very costly.
And to address your point of more education even if everyone in the US was trained to be an engineer do you think they would all make good or competent or the best VALUE engineers? I think not.
The world is flattening and all resources will slowly find their way into the most productive hands. Distributed elitism is already upon us! (emphasis mine)
Who said the best education had to be of one single profession - as long as you can get the education with some sort of guarantee of it not being towards a job that self-built the Domestic Job Killer known as Offshoring (Offwhoring acceptable too).
50+ years is a bit long, and I'm not about to put myself to cryogenics just yet to wait for a nation that promotes domestic education if that doesnt pan out. It's better to deal with this problem now, before it's impossible to reverse.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.