Tuesday, February 24, 2004

Sixteen hard truths of off-shoring

Tom Peters has just posted the following 16 hard truths of Offshoring on his Observations site. I think it's important to point out that Tom has been predicting that 90% white collar jobs are going to be moved overseas since March of 2000. Expect to see more and more information on this topic as it becomes a bigger and bigger hotpoint in political elections.

1. "Off-shoring" will continue; the tide cannot be reversed.

2. Service jobs are a bigger issue than manufacturing jobs, by an order of magnitude.

3. The automation of business processes is as big a phenomenon in job shrinkage as off-shoring.

4. We are in the middle of a once every hundred years' (or so) productivity burst -- which is good for us in the long haul.

5. Job churn is normal and necessary: The more the better ... long haul.

6. Americans' "unearned wage advantage" could be erased permanently. ("There is no job which is America's God-given right anymore." -- Carly Fiorina, Hewlett-Packard)

7. The wholesale, upscale entry of 2.5 billion people (China, India) into the global economy at an accelerating rate is almost unfathomable.

8. Big Companies are off-shoring/automating almost exclusively in pursuit of efficiency and shareholder value enhancement. (This is not new or news.)

9. Big companies do not create jobs, and historically have not. (Big companies are not "built to last;" they almost inexorably are "built to decline.")

10. Job creation is entrepreneurially led, especially by a small number of "start-ups" that become growth companies (Microsoft, Amgen et al.); hence entrepreneurial incentives including low capital gains taxes, high R&D supports are a top priority.

11. Primary and secondary education must be reformed, in particular to underscore creativity and innovation -- the mainstays of high-value added products and services. Children should be nurtured on risk-taking, with a low expectation of corporate cosseting.

12. Research universities must be vigorously supported.

13. National/global protection of intellectual capital is imperative.

14. All economic progression is a matter of moving up the "value-added chain." (This is not "management speak": Think farm to factory to R&D lab.)

15. Worker benefits (health care, re-training credits, pensions) should be portable, to induce rather than impede labor mobility.

16. Workers have the ultimate stake. They must "re-imagine" themselves -- take the initiative to create useful global skills, not imagine that large employers or powerful nations will protect them from the current (and future!) labor market upheavals.

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