Month: April 2004

People say “our jobs are going overseas” as though there were a fixed number of jobs. While it’s true that there are only so many cars to be sold in the US in any given year, it’s also true that there’s really plenty of work to go around. Not, mind you, that there are good jobs for everyone who wants one, but that “jobs” are not fixed in number. Increasing the wealth and well-being of the world will eventually mean that the US auto industry has a lot more cars to sell in, say, India, and China, than it could possibly have imagined if it stuck to manufacturing and selling only in the US and Europe.

There are many things to be done, and we should in general seek the most efficient way to perform them, so that individual people can be freed up to do other work. Arguing that building cars in Mexico or running call centers in India is taking work away from the US is an awful lot like arguing that using a mechanical reaping and sowing machine takes work away from the individual people with scythes and sacks of grain.

It does, of course– they’re unemployed, and the upheaval caused by the mass migration of unemployed former peasants to the city was a huge part of the industrial revolution, and it wasn’t pretty or easy. But we’re better off for it, I think, than we would be if we were still depending on manual farming techniques. We’re not regularly subject to famine, for example. We have different clothes to wear every day of the week. And people don’t all have to be peasants– they can be personal trainers, or massage therapists, or tool-and-die stampers, or software engineers.

There’s a lot of software that needs to be written in this world, a lot of things that need to be manufactured. The increase in jobs in developing countries can and will be a good thing; whether it’s a rough ride or worse depends on regulation and process.

We need to make sure that companies aren’t abusing tax shelters, that environmental regulations are obeyed (and standardized globally), and that minimum wage and employee protection laws are enacted and obeyed. If Mexican factory workers had sane, healthy working conditions, it’d be a better world on both sides of the border.

Later, I will explain why huge amounts of immigration should be legalized. In fact, I can say it in one phrase: legal immigrants pay more taxes, and those taxes support the services rendered to the legal immigrants, plus they support social security, which is in dire need of young able-bodied workers on the legitimate tax rolls.

Robert Cringely has written several articles about outsourcing, both onshore and off. His point is that, for the most part, outsourcing is a short-term solution which typically lowers quality and ultimately increases costs through expensive corrections of mistakes made by the outsourcerors.

Now, as someone who works for a multinational corporation, I work with engineering groups in Bangalore, Waltham, Provo, and Mexico City. That’s not necessarily outsourcing, though: Novell has a subsidiary in almost every country in the world and they all report back to regional, continental, and global bosses (the global bosses are not mysterious beings, either– we call them Jack and Chris. Sure, they’re from Mars and have tentacles, but the names make them so friendly!)

We outsource a number of functions here. For example, the people who clean our offices do not work directly for Novell. (Nor, for that matter, do the people who clean Wal*Mart stores, which has led to Wal*Mart getting in trouble for hiring contractors that hired illegal immigrants. Lesson: outsourcing can help you place blame!)

IT outsourcing, for the most part, is a bad idea because it’s more complicated, and less fungible, than, say, floor-cleaning. If Ace Cleaning screws up washing your windows, you can call Acme, and they’ll come over and clean them. If CSC screws up your multimillion-dollar three-year IT rollout project, you can’t call SBS and have them take it over right away. Each job is different enough that it’s not feasible to switch vendors quickly, or for that matter, switch vendors at all.

In some cases it does make sense, though. A lot of companies, especially nontechnical companies, pay for web design, and it doesn’t matter at that point of the web design company is in Bangalore or Boston: you have your teleconference, you mail your comps, and you pay your bills. Same with web hosting, or even Exchange mail hosting.

Outsourcing your core competence to a competitor is a terrible idea. Outsourcing a complicated, difficult-to-replace service is usually a bad idea, unless you’re way too small a company to afford a whole solution– say, the ten-person bookstore with a part-time email administrator. Outsourcing a non-core, simple, fungible service, whether it’s printer-servicing or some random part of IT, can make sense, if done properly.

Whether it’s done in Bangalore or Boise doesn’t much matter, ultimately: it’s still outsourcing.

More later.

My personal favorite is the scooter article which begins “Riding a motor scooter in Los Angeles is a religious experience. And that religion is Calvinism.” Boston’s not that bad, five months of the year, for scootering, but it’s not, say, a small town in southern Italy.

Mmmm, coffee. Sounds like someone needs to switch to Provigil for their recreational psychopharmacology!