March 27, 2006 at 1:44 pm
Is a global skilled technical workforce bad for the US?
I'd say no, but a recent think tank debate said it means an end to US dominance. I might agree with that since I think the US is the best country, but there are many talented, brilliant thinkers and workers all around the world.
More skilled tech workers in other countries does mean more competition. It means that bids for jobs will face other, perhaps lower priced, entries from other countries. But it doesn't mean doom and gloom. I've been hearing for a long time how bad foreign competition can be for my country. Indeed for any country and lots of them recognize this and enact tariffs and limit imports or even the ability to do business by foreign firms.
But the US has a great spirit and we've shown that we are driven to succeed. To me this is an opportunity to do better and grow. The challenge of foreign competition should drive us to do better, not close our borders and shy away. That would be the recipe for disaster.
I've watched the US auto industry decline for most of my life with the introduction of cheap Japanese cars in the 70s. However that decline is the fault of our companies that weren't spurred to compete and build better cars. Obsessed with larger, fuel-guzzling cars, the Detroit Big 3 didn't respond quickly. Or even have the foresight to be looking ahead.
That seems to be changing now, especially with Ford, and I hope the high tech industry recognizes this. They should welcome the changes and spur themselves to do better. Stop looking at the financial markets as your driving forces and instead look to build better, more useful, more feature rich and innovative products. Business will then take care of itself.
Steve Jones
March 28, 2006 at 6:41 am
Your timing is providential, just today I woke up and realized, dreading outsourcing and pretending everything is alright is foolishness. It's time to compete if I want to stay in this industry!
March 28, 2006 at 6:51 am
I once lost a contract to an East Indian firm, underbid by about 30% (cheaper leabour, less insurance issues, etc.). At the time I remember feeling like hell, because I had to let one of my coders go. Three months later the company came back to us because the distance mattered. We could be on site and our communication was more effective as a result. The transition is what is tough, because international competition means that some clients have to discover the quality factors in having competent and close development. And helping with that trnasition is what governments should be doing, rather than trying to delay the inevitable pressure to compete.
March 28, 2006 at 6:54 am
One of the biggest economic mistakes is to try to preserve a snapshot an economic situation as a permanent thing. Economy is dynamic at an ever increasing rate and trying to freeze patterns is at best hopeless and at worst destructive. As more and more countries become technologically developed, competition will increase, but so will markets and opportunities.
The dominance of high paid manufacturing jobs was itself just a phase after the shift from agriculture. The only true builder of overall wealth is productivity. The full output of a farming family a couple hundred years ago went to producing food and maintaining very limited posessions (the large time expenditure in darning socks, or reworking worn farm impliments --even nails were reused-- testified to the high cost of replacing these products). Gradually mechanized farming freed up more and more work hours fuelling the nascient manufacturing world, which in turn produced goods at far less real cost (it took far fewer hours of labor to buy an impliment than to laboriously refab an old one). This trend is been increasing ever since (it costs less than an hour's labor to buy a watch... how long would it take you to make one).
The overall pattern is that as human work hours are freed up by productivity, localized disruption occurs, but the hours eventually find themselves consumed in goods and services that would have never been even considered in leaner productivity times.
...
-- FORTRAN manual for Xerox Computers --
March 28, 2006 at 7:21 am
A given individuals performance far exceeds expectations when in face of competition. My personal belief is if you have a quality product or service to offer, regardless of the other country pricing issues you will succeed.
Because I am Indian by birth, however now an American citizen, I get a lot of garbage about oh my job is eliminated because some Indian can do better for far less. I want to turn around and say “Hey I am working towards providing a better and product and service than the people half way around the world why don’t you do the same”.
The times have changed globalization is an element that is part of every culture, and it should be otherwise we become to self-centered ego maniacs. The goal should always be pooling together resources, by that mean if you strongly believe that someone is doing a better job than you are, stop and rethink your approach, revise your processing, do the right things, it is about being Passionate towards your job that will bring you the success you rightfully deserve.
March 28, 2006 at 7:22 am
I have no issue with even footing competition. In fact the very foundation of competition is a fundamentally even playing field. Whenever the competition is tilted in one direction too far it is fundamentally flawed.
America enjoyed a dominant position for many years. This was fundamentally flawed and an even footing had to be restored. Now the pendulem would appear to have swung to far the other direction. With many skilled technical workers available in countries that have such low standards of/ costs of living that they now enjoy competitive advantages.
Should something be done to level the playing field is the real question. And if so what? Isolationism surely would not accomplish the goal. So becoming more competitive is substantially more elusive.
March 28, 2006 at 7:28 am
Obsessed with larger, fuel-guzzling cars, the Detroit Big 3 didn't respond quickly. Or even have the foresight to be looking ahead.
This is the common explanation, but misses the mark. Certainly for the past 15 years, it is the larger vehicles that have been paying the bills (even Saturn which tried to stick to smaller cars was forced by market demand to change its lineup). The Japanese have also been carried along by this demand, big trucks, SUVs, my 89 Acura looks downright tiny compared to it's current progeny.
Detroit's real problem is profitability, buried in years of inertia and financially suicidal contracts that evolved in a time when the US auto industry did not have to worry about world competition. Even the US plants of Japanese and other manufacturers have far less operational cost because their whole labor structure is more competitive.
...
-- FORTRAN manual for Xerox Computers --
March 28, 2006 at 8:12 am
I was forced out of one position as a programmer not because I was incompetent but because G.E. could hire four equally competent programmers from India for the same salary they paid me.
I don't have a problem with competition or innovation but four on one is unfair in my book.
The same is true in the manufacturing sector where you have China producing goods at a lower price because of lower labor costs.
March 28, 2006 at 8:13 am
What interesting timing! I recently read "The World is Flat" by Thomas Friedman. It is a fascinating book that deals with this topic.
Julie Breutzmann
March 28, 2006 at 8:30 am
Sorry way to many simpleton approaches. Wait until China gets in the Fray. With pirated software, and a propped up currency this will become a major problem. The world is flat theory is a very poor analogy when issues like this exist. When the playing field is level you can have this discussion. Also many of the countries we outsource to severly hamper our imports to these countries. The only way to fix this is tariffs.
March 28, 2006 at 8:38 am
I feel that many ppl in the US are leaving IT, or deciding not to get involved in the first place because of the challenges from overseas (and imported) cheap labor. The "brain drain" is on.
Competition is good, but only when fair. The US will shortly fail to be the IT leader.
Terry
March 28, 2006 at 8:55 am
Not sure I agree we'll fail in the US. We might not employ the most IT people as I can see China or India giving us competition there, but high tech is alive and well in the US.
It's not fair or unfair, it's just something that happens. Unlike some manufacturing, like steel, I'm not sure that IT will fall to that level since the interactions between client and customer are important.
March 28, 2006 at 9:14 am
Hi Steve
I read with interest your comments on the American auto companies and especially your "I've watched the US auto industry decline for most of my life with the introduction of cheap Japanese cars in the 70s. However that decline is the fault of our companies that weren't spurred to compete and build better cars."
I suggest to you and your readers that the above statement is simply not accurate.
When American politicians allow foreign car companies (or any other industry) dump their products in America BELOW actual cost because their companies are heavily supported by their government's monies... AND these same foreign governments purposefully prevent our cars (and other products) from being sold in their countries... the resultant loss of industries and jobs is a foregone conclusion.
This happened in the 70's with Japan.
It is happening now with Korea.
Soon, China will join in.
Sometimes finding "fault" is not as simple as it may appear.
March 28, 2006 at 9:25 am
The US is more innovative, we already lag say China and India in the number of PhD's granted in aggregate terms and degrees granted annually.
Innovation includes Government resources channelled to the private sector for R&D health, education, defense, infrastructure, etc. It has been our innovation that has kept us ahead. This innovation is directly correlated to our country's unique "cultural" approach -- one that inspires and rewards risk takers. We are not likely to loose this edge soon. But global politics are playing against the US technology worker.
The US is developing a strategic relationship with India (1 billion people) to counter the threat from China's (2.5 billion people). This favored relationship with the US may very well dictate the number of India immigrants, trade policy and "incentives" offered by our government to US companies to locate in India. Outsourcing is on the way out. Local US Corporate presence is on the way in. Distance was a problem -- now US corporations, including Microsoft are opening major divisional headquarters overseas. They will easily be able to manage what we now call outsourcing in India.
In the aggregate, supply and demand in a global economy dictate pricing. The sheer numbers of individuals with advanced degrees from India and China will have a effect upon wages of highly skilled workers in the US. Or, it will drive a move to hire knowledge workers elsewhere, or move offices to locales where they can become "corporate employees".
Who ever thought 20 years ago that the technology sector would still be growing? It's this growth -- the worlds appetite for leveraged technology, (technology that makes work product cheaper or moves certain technology into the consumer realm) that is what is keeping America's entrepreneurs busy.
What makes the Indian's so formidable is that they adapt well to western ways, particularly when it comes to capitalism ( the Japanese are still trying to understand our capitalistic ways). I suspect that they will innovate their way to being the 2nd most innovative country in the world.
For the US this means that the vast majority of highly educated Indians will find a market for their services at home, a small group of highly educated, and motivated individuals will continue to come the US to fill gaps in demand for highly skilled workers. These immigrants may start out working for less, but they quickly assess the market for their skills and demand higher wages. So you will find yourself competing with these folks for jobs here. If you have a BS degree and they have a PhD you could loose (think about getting an advanced degree). And, if you have a fear of working for say an East Indian, then beware, they will innovate, starting and growing successful businesses, and you may well be working for one of these smart people soon.
March 28, 2006 at 9:40 am
I am all in favor of fair trade and global competition, but you that doesn't mean you have to say, "It's Darwinism, nothing to be done."
Perhaps tariffs and their ilk are not the way to go, but at the very least the playing field should be level and in many cases it's not.
The government needs to stop providing INCENTIVES for companies to outsource jobs.
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