February 17, 2004

The clueless leading the stupid

It seems that there is something of a kerfuffle in this American election year over the growth in overseas outsourcing, especially of computer jobs to India.

Having lived with Silicon Valley's many Randroids for far too long, I'm having some difficulty suppressing my sense of Schadenfreude. "I don't want a union, I prefer to stand on my own skills." Indeed.

Via Brad Delong, I see this article over at Wired. It is, as usual, one paradigm behind the times. Yes, in the long run outsourcing may enable people to be better deployed in more productive industries. Yes, people in India are happy to have the jobs.

What really struck me about this text though was this bit:

As I meet programmers and executives, I hear lots of talk about quality and focus and ISO and CMM certifications and getting the details right. But never - not once - does anybody mention innovation, creativity, or changing the world. Again, it reminds me of Japan in the '80s - dedicated to continuous improvement but often at the expense of bolder leaps of possibility.

And therein lies the opportunity for Americans. It's inevitable that certain things - fabrication, maintenance, testing, upgrades, and other routine knowledge work - will be done overseas. But that leaves plenty for us to do. After all, before these Indian programmers have something to fabricate, maintain, test, or upgrade, that something first must be imagined and invented. And these creations must be explained to customers and marketed to suppliers and entered into the swirl of commerce in a fashion that people notice, all of which require aptitudes that are more difficult to outsource - imagination, empathy, and the ability to forge relationships.

This is something of a standard excuse - it's an extension of the old Yankee know-how cliché that proved to be such a joke when Japanese cars started turning up on the US market. But for the most part, it put me in mind of a South Park episode: Chinpokomon, the episode where the kids of South Park fall under the mind control of a Japanese conglomerate. In particular, I thought of a scene in which an adult in South Park - a toy store owner - realises that something is up with these "Chinpokomon" toys and starts asking questions.

Hirohito: You are American?!
Owner: Yes!
Hirohito: Oh! You must have very big penis!
Owner: Excuse me?! I was just asking you what you're up to with these toys!
Hirohito: Nothing! We are very simple people with very small penis! Mr. Hosek's penis is especially small!
Hosek: He he he! So small!
Hirohito: We cannot achieve much with so small penis! But, you Americans! Wow! Penis so big! SO BIG PENIS!
Owner: Well, I-I guess it is a pretty good size.
Hosek: Menasa! Kit`e! Kit`e! (A bunch of Japaneese women enter) This man has a very big penis! (Women applaud while the Toy Store Owner smiles in pride.) Ho, ho! What an enorm-immense penis!
Owner: Well, it certainly was nice meeting you folk! I just wanted to bring that little malfunction to your attention! Bye, bye!
Hirohio: Goodbye! Thank you for stopping by with your gargantuan penis!
Owner: (Still smilling in pride) Hm, Hmmm! (leaves)
That's all Wired is doing here. By evoking some sort of natural American sense of creativity as the reason why there is nothing to worry about, they are doing nothing more substantial than claiming that their bigger penises will save the day.

What they seem to have failed to grasp is that the folks doing that imagining and creating, the research and development, taking meetings, building networks and selling product, are themselves increasingly foreign nationals. As long as capital kept pouring into the US and work visas were easy to get, it wasn't too hard to just hire the best from overseas and keep them in America. With the student visa restrictions of post-9/11 America - not to mention the unlikelihood of any expansion of the H1-B programme - and the drop in capital inflow from recent currency readjustments, how much longer is America going to be able to rely on that sort of intellectual capital?

Of course, people like me tend to be the winners here. Every time an American CEO starts to think about getting into overseas markets, he (it's almost always a he) thinks language and localisation issues are little details that need barely be mentioned. As a result, he pays more and gets lower quality. Harsh. His overseas employees (and their governments) will sooner or later realise how much more of a clue they have about international markets in addition to their advantages in labour costs. In short, I'll be paid to tell his competitors how to beat the crap out of him.

But all that is in the long run. In the short run, it's a few Indian workers getting jobs working indirectly for American firms and Americans losing them. In the old days (pre-2001), Indian profits from this sort of venture would just return to US capital markets instead of building businesses in India. But, with the dollar tanked, that money is going into European capital markets. I win again.

Posted 2004/02/17 17:40 (Tue) | TrackBack

Well, congratulations on winning. But as I believe you are in favour of borders becoming less important, why worry too much about short-term displacement (or who has the bigger tallywhackers)?

Posted by: Mrs Tilton at February 17, 2004 18:35

Mrs. T, you misunderstand me. I'm all in favour of good jobs for India. I do want people - and especially coders who think they're indispensable - to understand that they aren't going to magically get new, high paying jobs when they lose the ones they've got. Not only not on the short term but quite possibly on the long term too. The rising tide doesn't just lift all boats, it sweeps a few away.

I said in my last book review on AFOE that if this process really is raising productivity and net wealth, there needs to be enough wealth to compensate the losers and still come out ahead.

Posted by: Scott Martens at February 17, 2004 19:31

What the passage ignores is what most conceptualists ignore. Innovation comes from apprenticeship. If you begin doing the grunt work, in any field, any creation is an extension of that practice. It always come down to the basics.

Posted by: seth edenbaum at February 18, 2004 16:58

The point being that when the Indian fabricators begin to 'imagine and invent' they will be better at it than those who have forgotten how to fabricate.
The author's only logic is simple stupid nationism.

Posted by: seth edenbaum at February 18, 2004 17:04

This is a pretty readable article on the same theme.

Posted by: Aidan Kehoe at February 18, 2004 17:49

There are concerns over productivty and dynamic growth from the Indian point of view as well; for a sample I found this article from the EPW quite good:


Posted by: Conrad Barwa at February 19, 2004 12:07

Coming up in a small town in Japan is a festival on March 15 known as Hounen Matsuri...


Maybe it is South Park related but not much else relates to what you are commenting on.

Posted by: david at March 2, 2004 2:05
Post a comment

Remember personal info?