Friday, January 30, 2004

Offshore mania

I first read a cohesive article about the offshoring (like outsourcing, but doing it outisde your coutry) of American white collar jobs in Tom Peters' new book Re-imagine! (haven't read it, you should buy it, and read it, and then read it again). Tom makes what many may think are dire predictions about how many American white collar jobs are going to be outsourced to countries like India in the next 5 years. Is he being alarmist? Maybe, and then again, maybe he's not being alarmist enough.

Examine the following articles:

Fast Company | Offshore Storm: The Global Razor's Edge

Wired 12.02: The New Face of the Silicon Age

HP: Protectionism won't save Europe's jobs | CNET

BW Online | December 8, 2003 | The Rise Of India

Pay special attention to the Wired article above, it's very comprehensive.

What does all this mean? Ask Tom Peters and he will tell you that it is time to re-invent yourself. He's right. This has happened before, and you don't need to read the Wired article to figure it out, you already know it. Think about American history:

(1) Farming is the big major industry then industry begins. People move from farms to factories, but it takes awhile. Farms become more efficient with less and less people.
(2) Industry creates the need for office jobs.
(3) Industrial workers begin to move into offices, but it take awhile. Industry becomes more efficient with less and less people.
(4) Industrial (manufacturing) work begins to be farmed out to Asian countries. Japan becomes a massive force in the auto industry and electronics industries. Politicians campaign on platforms of protectionism. Buy American is a big deal.

Do you see the trend? Still a lot of cars and clothes and everything else are designed here in America, but built and assembled overseas. Should it really surprise any of us all that much that the act of writing computer code is really all that different from building a car? What fueled the consulting boom through the 1990's was really not strategy consulting per se, it was the act of dressing computer programmers in buttondowns and suits and calling them consultants. When I was a consultant I was paid a ridiculous amount of money as a base salary, overtime, and great beenfits and I did tech-strategy consulting that was then passed off to the other "consultants" (aka programmers) to code.

Let's do the simple math:

Average salary of a programmer in India -- $8,000
Average salary of a programmer in America (same skills) -- $30,000-$40,000

The math is really easy. In the immortal words of Doctor Demming, ". . .it ain't that hard folks."

Expect to see politicians soon (now?) standing on platforms of protectionism for the American programming jobs being shipped overseas. Simple fact of the matter is that this has happened many times before in our history and the end result has always been positive for us. Read the articles, the Indians don't want the job of developing and thinking up the software, they just want to build (code) it. Get it? This gives us more time to just, not to put too sharp a point on it, think shit up! That's what we do best. Read Tom's book. Pay attention to what's going on. Re-invent yourself to adapt to the new way of the world (damn right it's happening fast, that's what has you scared).

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