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Globalization Decimating US I.T. Jobs
mrraven writes, "According to Ronald Reagan's former deputy secretary of the treasury in this
article in Counterpunch, globalization is destroying US I.T. jobs. From the article: 'During the past five years (January 01 – January 06), the information sector of the US economy lost 644,000 jobs, or 17.4 per cent of its work force. Computer systems design and related work lost 105,000 jobs, or 8.5 per cent of its work force. Clearly, jobs offshoring is not creating jobs in computers and information technology.'" Paul Craig Roberts quotes a number of formerly pro-globalization economists who are now seeing the light of the harrowing of the US middle class. It's not limited to I.T. Roberts quotes one recanting economist, Alan Blinder, as saying that 42–56 million American service-sector jobs are susceptible to offshoring.
Speaking of R&D... ...one of the comments made by Lucent CEO Patricia Russo about the pending merger with Alcatel said (and I'm paraphrasing because I don't have the quote in front of me):
"Alcatel does not do the kind of research that Lucent has historically done at Bell Labs. Future projects at Bell Labs will need to focus on productization in a 5-year timeframe. This transition has already started."
Science and research for the sake of science and research is now officially dead at Bell Labs. If they can't turn it into something that can be sold within 5 years, shitcan it.
Learning HOW to think is more important than learning WHAT to think.
Disclaimer: I am an IT manager who sets up and runs IT groups in India. So I'm the "bad guy" I guess.
1. Outsourcing is not new. And the reaction by the IT industry is not new. The garment industry was outsourced, the steel industry, to a degree the automotive industry. It happens. The people directly impacted don't like it but as long as it make economic sense, outsourcing will happen. Adapt to survive and thrive.
2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees.
3. Outsourcing is not easy in the IT industry. I can point to as many failures as successes. Not every company in the US that needs IT resources will be candidates for outsourcing. Not every job will end up overseas. In fact even though my entire IT organization is in India I'll soon be looking for a Systems Engineer in the US because I'm not happy with what I find in India.
4. Salaries for IT candidates in India are increasing very rapidly (think Silicon Valley, 1999). Given the inherent inefficiency of dealing with people great distances away, the economics of outsourcing are getting worse.
5. Decimation means to kill off 10%, not 90% as some posts have said. From Wikipedia: The word decimation is derived from Latin meaning "removal of a tenth." So the article is correct, this is decimation.
6. I could be wrong on any or all of the above.
"Written on the pages is the answer to the never ending story..."
Why should small/medium sized companies develop software in the US? It's too damn risky. If they compete with or are considered a threat to any of the larger companies, they will just get sued out of existence for "patent infringement". It doesn't even matter whether they have infringed patents, because suing someone for patent infringement is am easy way to cost them a lot of money and not have it immediately obvious about whether you're bluffing. Patents are usually very difficult to read and understand.
"The US *DOES* have a seriously bad management culture which is a far bigger threat than outsourcing IMHO."
A few years ago, I worked as a developer in a fairly large well-known tech company. The progression: Starting there, things were pretty good--well staffed, good morale, nice people to work with. The push for the "bottom line" started creeping in after a year or two on the job--secretaries got laid off, senior engineers got laid off, a website was set up for us to do our own expensing, travel, etc. It was hell. I, a well-trained software developer, getting paid pretty good money, was expected to deal with making travel arrangements, fighting with HR, etc. while my time was being billed to an engineering project. It isn't worth working for a company where my time and talent is simply not valued.
Hey, you're the first to mention the concept for which I was looking, so you get the reply:
This is correct, in my opinion. The big myth - which was not cited in the article - is that you can actually maintain an economy with high standard of living based on "high value" services alone. The key to an economy is really its ability to produce wealth - hard, physical, tangible goods that, as you said, actually raise the standard of living of that society's citizens. All the dentists and doctors in the world cannot help you if you don't have good tools, good infrastructure, or even good food.
I remember from one of my early economics classes that the only wealth-producing endeavours known are agriculture and manufacturing - the rest of economic activity just shuffles that wealth around.
If the economy of a country switches to being service-based, it is then a slave to the actual wealth-producing nations, because if the nations that have the wealth no longer need or want the services, with what is the service-based economy left? The reason the US economy used to be so robust is it had a good balance between service and wealth production. The shift away from producing wealth locally (I don't mean by ownership, I mean physically) is probably a greater risk than most are able to recognize.
"There are a dozen opinions on a matter until you know the truth. Then there is only one." - CS Lewis (paraprhase)