Blowback, or Passage to India
In the last few weeks we've been taking notice of mainstream focus on the amazing drain of IT jobs to India. "Wired Magazine" is the latest to take a shot at it with a series headed by Daniel H. Pink et al. http://www.wired.com/wired/archive/12.02/india_pr.html Bottom Line from everyone concerned: The number of jobs flowing to India will increase exponentially as companies face the daunting fact that their competitors can buy 5 programmers or medical lab technician for the price of one US cube. All three authors at Wired agree that painful as it is, we will just have to get used to the old saw "that the only thing constant is change" and the even older one: "This country has an endless supply of initiative and drive."
As usual, our take is a little more nuanced. First off, we do agree that undoubtedly, we will move on --nothing stops time.... but the question to be begged, is how? The extended Silicon Valley boom occurred nearly on the heels of the rusting of the American Midwest --and not uncoincidentally, many of the pioneer cadre in the Valley had grown up and were the best and brightest of that very heartland. But we have to also bear in mind that thanks to that very Silicon Valley innovation the world has moved on. The three major differences between now and the early 1990's are the advent of truly globalized corporations, the abundance of fiber cable and the speedy spread of cheap-CPU powered network technology.
That leads us, with the intensity of a Holmes on a case, to the hard question: Do American's have an innate advantage in the realms of "imagination, concept and empathy", the qualities it is suggested in "Wired" that will keep our future and present white collar employees one step ahead of the foreign competition? Clearly, we all certainly hope so.
Not too long ago, dweeb friends of ours would refer, without forethought to $20 bills as "techie foodstamps". Not too much longer ago companies were offering $10,000 sign-up bonuses and bounties. Nobody was hiring programmers with job qualifications of "imaginative, conceptual and empathetic", though admittedly "flexibility" might have been listed as a plus.
So what is it about our system, or water supply, for that matter, that provides us with a dominance in inventiveness, imagination, fantasy and conceptual skills? Is this something we teach in our schools? If so, things must have changed radically since we went to grammar school. And from what we hear, the public education system back then was a marvel compared to what's served up most places these days.
Communication links and Moore's law are certainly speeding up economic evolution. Are we closer to where we were mid-century or where Great Britain was at the turn of last century? Yes, we are undoubtedly the world's great military power with no rivals in sight and so we spend on building up our military capabilities at a rate that is greater than the next 17 countries combined. It can be said that the sun never sets on our globalized corporations. GE, for example, has nearly 18,000 employees in India, no doubt more than they had in Schenectady (company HQ, then) right after World War II.
When you look carefully over the lists of achievers: the innovators, inventors, media builders and industrialists of America's last half century, it is quite amazing how many were foreign born. So the real question is not whether we have some great corner on innovation and drive but whether we still offer the lure of an open playing field where dreamers from all over the world are drawn?
And how is that equation driven by the add-ons of high bandwidth, cultural hegemony, English language speaking skills and speedy CPU's? When the Japanese bubble burst --and, to keep the record straight, it did reinflate briefly several times since-- it caused a certain re-evaluation. The shining image of Japanese toughness, work ethic and just-in-time invincibility faded quickly into that of the Japanese hill of ants.
Investors, instead of keeping a short-term peeping eye on the Wall St. show, should be looking at what's really happening: in Iraq, in Washington at the Fed's printing presses and in the high tech sectors where the future picture will emerge. No matter what the short-term brings, perhaps right up until the election, there will be a patch ahead where real adjustments occur and are made. They're bound to catch a lot of people by surprise.
rmb
Copyright 2004 Richard Mendel-Black All Rights Reserved
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