Offshoring: San Jose Mercury News article? (take II)

Subject: Offshoring: San Jose Mercury News article? (take II)
From: "Hart, Geoff" <Geoff-H -at- MTL -dot- FERIC -dot- CA>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Thu, 13 Nov 2003 10:17:24 -0500

Picking up on some points that Eric Dunn raised:

<<the fact that Indian companies are now looking for foreign workers means
the market is drying up.>>

Not necessarily. Early in such labor migrations, while you're developing
experience and expertise, it makes sense to hire the high-priced talent. I
suspect that's more likely what's going on. This would mean more work for
those of us willing to relocate in the short term. In the long term, we'll
be replaced by the locals we train.

<<That means that prices will be driven up in India.>>

Sure, just as has happened with the Japanese auto and animation industries,
who now subcontract to China and Korea. Eventually, the current low-priced
producers get replaced by workers in countries that are hungrier and thus
less expensive. On the whole, I think this is a good thing for the people in
those countries, despite the many problems such social disruptions bring
along for those countries.

<<Off-shoring and outsourcing happen after the cutting edge has passed. Stay
on the cutting edge of technology and your job will be safer.>>

That's always been the case to date, but it won't necessarily remain the
case for much longer. For example, you'll see a lot of biotech advances
moving offshore to countries with much less restrictive policies concerning
research ethics and so on. Biotech is just starting to be the cutting edge,
and yet much of the work is going overseas specifically because there are
fewer barriers to research and implementation.

<<Or, in your case Geoff, I suppose it's unlikely that India will develop
much in the way of forestry technology and research.>>

I'm not worried about India. Australia and South America worry me much more.

<<But many sectors requiring large capital investments and intensive labour
have already moved overseas, so what's the difference?>>

My point was that capital requirements make it harder to move--but that
intellectual resources move even more easily, and thus are even more at risk
for being moved. What's different this time around is that the tools of
production (computers in our case) are increasingly cheaper to obtain, and
the brains required to use them are a commodity; there's nothing special
about me and thee that lets us work better or smarter than they guy in India
who speaks fluent English and is willing to work a 60-hour week so they can
read the programming manuals after work and the latest textbooks on a field
over lunch.

<<While it seems knowledge workers are easier to move I don't really think

My claim that knowledge work is easy to move relies on the number of
programming jobs being moved to China and India, and why India has more CMM
Level 5 programming shops than anyone else in the world. Similarly, many
Indian and Chinese students come to North America for degrees then return
home bearing those skills. I think that's great for them and their
countries, but not so great for us.

In the long term, I think everyone benefits. But in the short term, as in
all previous historical shifts in technology and economic dominance, people
like us--the ones whose work is outsourced--will suffer a fair bit. I don't
have any good solution for this.

<<Sorry, but that's a poor argument. Microsoft's main clients are not
Microsoft employees.>>

No, the argument's fine--I just expressed it badly. <g> My main point is
that if you ship a large number of high-paying jobs overseas, then those
salaries are no longer available to subsidize consumption in your local
economy. The workers whose jobs were relocated elsewhere now have less money
to spend, the industries that used to receive those salary dollars have less
income to hire and retain employees, and so on.

<<Are you suggesting the impact to your local grocery store should be taken
into consideration before your company can make a decision to fire or

I don't think anyone should be legislating "local content" restrictions. But
yes, I'd hope an employer living in my community would consider the effect
of such decisions on the community. Business nowadays is exclusively about
cost; with few exceptions, it's long since forgotten any sense of social

<<Sure, the laid-off buggy-whip makers stopped buying horse buggies. But
that's because they all found other employment and started buying cars.>>

So let me pose the tough question: What jobs are we going to work in once
most companies move most of our existing jobs overseas? I think that's a big
one for members of techwr-l. (Perhaps start a new thread for this one: "Jobs
of the future"?)

<<While they initially suffered economically, the world economy owes its
current size and might to the commoditisation and elimination of their

While that's true in the long run, the short-term result of such economic
transfers have historically been two undesirable things: First,
concentration of wealth in ever fewer hands. Second, an averaging effect in
which the standard of living rises for the majority, but the average falls
in regions that currently live at the highest standards. Simple math!

--Geoff Hart, ghart -at- [delete]videotron -dot- ca
Forest Engineering Research Institute of Canada
580 boul. St-Jean
Pointe-Claire, Que., H9R 3J9 Canada

"Wisdom is one of the few things that look bigger the further away it
is."--Terry Pratchett



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