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"Off-shoring" Manifesto/Rant: Sixteen Hard Truths (Tom Peters)
tompeters.com ^ | February 21, 2004 | Tom Peters

Posted on 02/24/2004 4:20:01 PM PST by AZLiberty

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 ... in the long haul.  

6. Americans' "unearned wage advantage" (Born in the U.S.A.) could be erased ... permanently.  

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

8. Free trade works. Period. It makes the world a safer place ... long haul. The process is not pretty at times. Those displaced must be helped when the "rules change." Such help must not be in perpetuity -- it demands a sunset date.  

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

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

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

12. 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.  

13. Research universities must be vigorously supported.  

14. National/global protection of intellectual capital-property is imperative.  

15. 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.)  

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

17.  Workers have the ultimate stake. And thus the ultimate personal responsibility. Think: Emerson, self-reliance. "Workers"/we/all must "re-imagine" ourselves -- take the initiative to create useful global skills, not imagine that large employers or powerful nations will protect us from the current (and future!) labor market upheavals.  

Quotes worth noting/quoting:   

"Fourteen Million Service Jobs Are in Danger of Being Shipped Overseas."  

"One Singaporean worker costs as much as three in Malaysia, eight in Thailand, thirteen in China, eighteen in India."  

"The proper role of a healthily functioning economy is to destroy jobs and put labor to use elsewhere. Despite this truth, layoffs and firings will always sting, as if the invisible hand of enterprise has slapped workers in the face." (Joseph Schumpeter)  

"WHAT ARE PEOPLE GOING TO DO WITH THEMSELVES?"  

"THERE IS NO JOB THAT IS AMERICA'S GOD-GIVEN RIGHT ANYMORE." (Carly Fiorina/HP)  

"The world has arrived at a rare strategic inflection point where nearly half its population -- living in China, India, Russia -- have been integrated into the global market economy, many of them highly educated workers, who can do just about any job in the world. We're talking about three billion people."  

"The notion that God intended Americans to be permanently wealthier than the rest of the world, that gets less and less likely as time goes on." (Robert Solow, Nobel Laureate in Economics)  

"The new organization of society implied by the triumph of individual autonomy and the true equalization of opportunity based upon merit will lead to very great rewards for merit and great individual autonomy. This will leave individuals far more responsible for themselves that they have been accustomed to being during the industrial period. It will also reduce the unearned advantage in living standards that has been enjoyed by residents of advanced industrial societies throughout the twentieth century." (Governor, Bank of England)


TOPICS: Business/Economy
KEYWORDS: globalization; offshoring; outsourcing; trade
Sounds about right.
1 posted on 02/24/2004 4:20:02 PM PST by AZLiberty
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To: AZLiberty
tag to watch ...
2 posted on 02/24/2004 4:26:58 PM PST by _Jim ( <--- Ann C. and Rush L. speak on gutless Liberals (RealAudio files))
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To: AZLiberty
We are all dead...in the long haul.
3 posted on 02/24/2004 4:27:21 PM PST by dfwgator
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To: AZLiberty
14. National/global protection of intellectual capital-property is imperative.

I must not understand. Does this mean that, for example, American intellectual capital must be protected all around the world? Or does it mean that American intellectual capital is now "Global?"

4 posted on 02/24/2004 4:29:56 PM PST by AreaMan
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To: AreaMan
It means that without enforceable patents, no technical advances can be sustained. Imagine a world where drug companies have significantly diminished incentives to develop new drugs because they cannot keep the rewards of their R&D?
5 posted on 02/24/2004 4:38:57 PM PST by RKV (He who has the guns makes the rules.)
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To: AZLiberty
in the long haul

That's a neat rhetorical trick, since "in the long haul" noone's going to remember your rosy predictions and noone's going to hold you responsible for them.

6 posted on 02/24/2004 4:42:51 PM PST by Revolting cat! ("In the end, nothing explains anything!")
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To: RKV
It means that without enforceable patents, no technical advances can be sustained.

Agreed.

I would like those patents be developed here in America.

7 posted on 02/24/2004 4:45:41 PM PST by AreaMan
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To: AZLiberty
Big companies are not "built to last;" they almost inexorably are "built to decline."

Without big companies would there be a Tom Peters?
8 posted on 02/24/2004 4:50:17 PM PST by lelio
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To: RKV
It means that without enforceable patents, no technical advances can be sustained.

Sorry, but that is nuts.

Change it to "no company that patents technology can be sustained by it" and you would be right. The technology itself marches on, regardless of what country performs the advances.

9 posted on 02/24/2004 4:54:28 PM PST by Pukin Dog (Sans Reproache)
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To: Pukin Dog
It means that without enforceable patents, no technical advances can be sustained.

Sorry, but that is nuts. Change it to "no company that patents technology can be sustained by it" and you would be right. The technology itself marches on, regardless of what country performs the advances.

I suspect that what he means is, that without enforceable patents, companies will not invest in R&D. Why spend the money and give everyone else a free ride? If this occurs, then technology itself will slow waaay down in its "march".

10 posted on 02/24/2004 4:59:29 PM PST by dark_lord (The Statue of Liberty now holds a baseball bat and she's yelling 'You want a piece of me?')
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To: AZLiberty
I read y-day that off-shoring service jobs (customer service and coding) is basically limited to 4 countries, Ireland, Canada, Great Britain, and India. Of those 4, India is limited to 3,000,000 people with sufficient english skills to be effective customer service representatives.
11 posted on 02/24/2004 5:04:40 PM PST by Lokibob (All typos and spelling errors are mine and copyrighted!!!!)
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To: _Jim
bump
12 posted on 02/24/2004 5:08:09 PM PST by beebuster2000
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To: AZLiberty
Now the globaloons admit it. America is selling itself out (the so called "unearned wage advantage") in the relentless pursuit of bargains which in the long haul aren't bargains at all.
13 posted on 02/24/2004 5:08:21 PM PST by HiTech RedNeck
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To: dark_lord
I understand, but that is wrong too.

Think about what Sony did when RCA decided that their patents were not worth enforcing. We still got WEGA, my man. If there are dollars to be made, SOMEBODY will pick up the technology and move it to profitability. The point is that the company that does this will not always be American, and we had better get used to that, and learn to compete more effectively unless we want the trickle to turn into a flood.

14 posted on 02/24/2004 5:17:49 PM PST by Pukin Dog (Sans Reproache)
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To: AZLiberty
6. Americans' "unearned wage advantage" (Born in the U.S.A.) could be erased ... permanently.

Looks like the author forgot a quote "worth noting/quoting":

"People vote their pocketbooks"

The idiot politician who thinks that Americans recieve an "unearned wage advantage" is doomed.

15 posted on 02/24/2004 5:22:49 PM PST by Willie Green (Go Pat Go!!!)
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To: AZLiberty
"The new organization of society implied by the triumph of individual autonomy and the true equalization of opportunity based upon merit will lead to very great rewards for merit and great individual autonomy. This will leave individuals far more responsible for themselves that they have been accustomed to being during the industrial period. It will also reduce the unearned advantage in living standards that has been enjoyed by residents of advanced industrial societies throughout the twentieth century." (Governor, Bank of England)

It's ironic that people who support "free trade" use quotes like this. I don't think freedom is what is giving places like China a wage advantage. I imagine the later part of the quote is true in that we may all be living in the third world. Except, of course for our masters.

16 posted on 02/24/2004 5:46:08 PM PST by briant
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To: Pukin Dog
If there are dollars to be made, SOMEBODY will pick up the technology and move it to profitability.

GREAT.

So company A spends millions developing a new semiconductor manufacturing process (embodying a veritable ton of IP - intellectual property) and company B, located in the far east (YOU take a guess at which country) is 'free' (by your rules now) to reverse engineer those products (ICs) fabbed (fabricated) by company A and then begin production in company B's facilities - with company A receiving *no* payback for their R & D!

THAT is not right ...

17 posted on 02/24/2004 6:04:08 PM PST by _Jim ( <--- Ann C. and Rush L. speak on gutless Liberals (RealAudio files))
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To: Pukin Dog
Reduce the profit from inovation, and take away the incentive to innovate.
18 posted on 02/24/2004 6:07:07 PM PST by RKV (He who has the guns makes the rules.)
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To: _Jim
THAT is not right ...

No, it is just reality. I didn't defend it, I only described it.

19 posted on 02/24/2004 6:08:48 PM PST by Pukin Dog (Sans Reproache)
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To: AZLiberty
That sounds like the kind of logic which could get John Kerry elected president...
20 posted on 02/24/2004 6:11:35 PM PST by greenwolf
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To: RKV
Innovators rarely profit. Those who take innovations to market cheaply usually do profit. Whether those companies are one and the same, is really up to the company in question.

Many of the same companies that complain about being undercut overseas were the ones that sold/shared their technology with those under-cutters when it was profitable for them.

Boeing builds wings in Japan, because when they went to Japan for cheaper manufacturing, Japan insisted on a piece of the action long term. Who is the fool?
21 posted on 02/24/2004 6:12:08 PM PST by Pukin Dog (Sans Reproache)
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To: RKV
More apt, and for shorter grants of the patent and copyright monopoly on manufacture, and perhaps against what may be your own views of expansionist "intellectual property" is:
Reduce the profit from litigation and take away the incentive to litigate.
The posited benefit of patent and copyright restrictions on freedom -- for that's what they are, grants of sole right to use of an idea, thus they are at the same time and more broadly, restrictions on use of those same ideas -- those posited, imagined benfits are far outweighted by the hobbling effect of litigation. That is, increasing patent (and copyight) life-times and scopes engenders litigation much more than invention and innovation.
22 posted on 02/24/2004 6:22:14 PM PST by bvw
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To: RKV
It means that without enforceable patents, no technical advances can be sustained. Imagine a world where drug companies have significantly diminished incentives to develop new drugs because they cannot keep the rewards of their R&D?

A point that I wish more people understood.

But how come other countries pay so little for the drugs they get form the American drug companies? We're lucky there not screwing us as badly as they alraedy are

See how long you'd be able to run a drug company if pharmacists living in other parts of the world copied your drug formulas because they refused to pay the going drug rates.

23 posted on 02/24/2004 6:23:14 PM PST by LowCountryJoe (Shameless way to get you to view my FR homepage)
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To: Pukin Dog
You are hitting home runs tonight! Every point you made is a score, imo.
24 posted on 02/24/2004 6:23:53 PM PST by bvw
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To: LowCountryJoe
"pharmacists living in other parts of the world copied"

That is why we used to have a concept called borders, and import tariffs. Good things, both. In the animal kingdom, things without borders and restrictions on imports are called slime-mold.

25 posted on 02/24/2004 6:26:38 PM PST by bvw
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To: AZLiberty
Crap, Tom Peters kind of resembles Teddy Ruxpin Dick "miserable failure" Gephardt.
26 posted on 02/24/2004 6:38:38 PM PST by LowCountryJoe (Shameless way to get you to view my FR homepage)
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To: Pukin Dog
No, it is just reality. I didn't defend it, I only described it.

Duh ... and WHY do think Peters mentions it then?

It's also not quite as pervasive as you might think it is, but, the potential for abuse *does* remain a live threat. Intel, TI, Motorola et al all have active legal departments whose jobs it is to see this does not become rampant ...

Remember, the post I'm responding to is this one:

   If there are dollars to be made, SOMEBODY will pick up the technology and move it to profitability.

The way that phrase is written - it sounded like business at the 'shrink-wrap' - WalMart level only was being addressed ...

27 posted on 02/24/2004 6:39:05 PM PST by _Jim ( <--- Ann C. and Rush L. speak on gutless Liberals (RealAudio files))
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To: _Jim
Are you saying we should not mention what we don't endorse? Come on. Peters mentions what is happening, to display a level of knowledge applicable to selling books. He may or may not have a side in the argument, but is that really the point? Is it not the point to understand that whether or not you like what is going on, that it IS going on, and rather than just whine about how we don't like it, that we decide to do something about it, or at the very least insulate ourselves from it's effects?
28 posted on 02/24/2004 6:47:32 PM PST by Pukin Dog (Sans Reproache)
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To: bvw
Quotas and tariffs are nice little euphemisms for central planning and benevolence. I'm really surprised that someone that seems to have such a sharp mind -such as yourself - can't recognize socialism however it is practiced. Tariffs were one of the very few things that the founders had wrong.
29 posted on 02/24/2004 6:47:57 PM PST by LowCountryJoe (Shameless way to get you to view my FR homepage)
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To: LowCountryJoe
You are close, but wrong.

Quotas and tariffs are NOT socialism. For them to be socialism, you would have to remove choice from the equation. No one need complete a transaction which is conditioned upon a quota, or required tariff.

It can be called 'social-engineering, persuasion, motivation, among other things, but Socialism is a bit much.
30 posted on 02/24/2004 6:52:27 PM PST by Pukin Dog (Sans Reproache)
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To: Pukin Dog
Clearly innovators do profit - AT&T for instance. Free riders do come along and where they can operate with state protection they can prosper. In the long run don't benefit on the copy cats.
31 posted on 02/24/2004 6:56:48 PM PST by RKV (He who has the guns makes the rules.)
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To: Pukin Dog
Are you saying we should not mention what we don't endorse?

I don't understand your point in that question; I am further annoyed with the rather cavalier attitude by some regarding IP (intellectual property) and R&D that gets 'stolen' by those that don't/won't respect patent law; I see nothing wrong with being granted a period of time during which one can recoup his (or her) financial investment or time before the idea/method becomes, quite literally, 'public property' ...

32 posted on 02/24/2004 6:59:28 PM PST by _Jim ( <--- Ann C. and Rush L. speak on gutless Liberals (RealAudio files))
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To: RKV
Didn't say that innovators don't profit, I said it is rare, by comparison with the number of profitable non-innovators that dwarf them.

Examples:

Innovator = IBM (the personal computer); Millions of non-innovators make profits from that invention which are thousands of times a multiple of what IBM makes.

That dynamic is true in every industry. Few can innovate, while almost anyone can profit from the innovations of others.
33 posted on 02/24/2004 7:02:13 PM PST by Pukin Dog (Sans Reproache)
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To: Pukin Dog
It can be called 'social-engineering, persuasion, motivation, among other things, but Socialism is a bit much.

Fair enough, but if I'm an importer of some resource that is used as an input for my finished product and you as an elected official hamstring me by increasing my cost due to some tariff - causing me to have to raise my prices, causing less demand/consumption, dead weight losses - I'm taking my business, my provided labor opportunities, and the tax revenue that I would have generated to some other shore; some place where the government is a lot less interfering with their "well meaning" policies.

34 posted on 02/24/2004 7:04:28 PM PST by LowCountryJoe (Shameless way to get you to view my FR homepage)
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To: LowCountryJoe
I'm sure you have nothing against benevolence. so you'll have to forgive me for not catching that aspect of your comment. And as far as central planning goes we are both not fans of it -- von Clausewitz in his never quite finished work "On War" has the best take on planning I've seen. Planning is a method of preparing one's thoughts and training one's senses about the future, but plans must be tossed once action commences.

What you mean by "central planning" is not planning, I'd say, but centralized control, managemnet and direction by parties absent from the front.

Life is never quite finished and we never should mechanically run plans as if it is -- and those central powers who would attempt to dominate us by such plans are a ruination and like a tub of concrete used as ballast in a birch-bark canoe.

Such tubs of rock hard ballast fill the Beltway, in every windowed office and chamber's seat. Our supply of fine, fast, quick-handling amd light to carry canoes is almost depleted. And the chinese and indians of hindustan persuation simply do not make them.

Yet they are great at pouring concrete into the tubs and shipping it to DC, where it is too highly valued.

And that is why tariffs are anti-central planning.

35 posted on 02/24/2004 7:05:47 PM PST by bvw
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To: _Jim
I think you should understand that it is possible to discuss and describe a situation without taking sides on it.

I see nothing wrong with being granted a period of time during which one can recoup his (or her) financial investment or time before the idea/method becomes, quite literally, 'public property'

How much time would you have given Zerox to come up with what Apple did before saying "times up"? Do you remember the "Tucker" automobile? How long would you give those folks? Ideas are worthless without execution. That is just the way it is. No one gets paid to think.

36 posted on 02/24/2004 7:09:39 PM PST by Pukin Dog (Sans Reproache)
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To: Pukin Dog
If you had some actual statistics which supported your contention I would believe you - but you don't (and won't find them because you are factually challenged). Here is a list of a few innovators - Hughes Aircraft (laser), Raytheon (microwave), Apple (OS)...
37 posted on 02/24/2004 7:10:03 PM PST by RKV (He who has the guns makes the rules.)
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To: Pukin Dog
Ideas are worthless without execution.

I think that this is a nice side-step of the issue overall; Texas Instruments is going to 'sit' on a development after spending millions on a new semiconductor fabrication technology or transistor design - a) money (investor/stockholder monies) isn't well-spent (obviously) doing that and b) that wouldn't be the intent nor goal at the outset of the development project either ...

38 posted on 02/24/2004 7:15:06 PM PST by _Jim ( <--- Ann C. and Rush L. speak on gutless Liberals (RealAudio files))
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To: bvw
Nice post but a bit heavy on the "lofty" writing. I particularly enjoyed the opening:

I'm sure you have nothing against benevolence...

Touché!

39 posted on 02/24/2004 7:16:34 PM PST by LowCountryJoe (Shameless way to get you to view my FR homepage)
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To: AZLiberty
True and salient point commentators like Ralph Peters are consistently missing - at least in terms of significance:

"In the long term" may refer to 20-50 years down the road. And the intervening years are politically unsustainable under our current political system.

40 posted on 02/24/2004 7:21:01 PM PST by Snuffington
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To: RKV
Hmmm, I guess this is not a fair fight.

You listed companies that either bought or stole technology from other companies before marketing them as their own. It would be a good idea for you to read, prior to arguing with me. Facts are a terrible thing to ignore. Apple? Woo-boy..... Have you ever HEARD of Zerox? I'll just be charitable and consider that you might have just had a bad day.
41 posted on 02/24/2004 7:23:49 PM PST by Pukin Dog (Sans Reproache)
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To: _Jim
Texas Instruments is going to 'sit' on a development until one of their smart people goes somewhere else and helps another company succeed by taking risks that TI was unable or unwilling to take.

This is a very old and repeated scenario.

42 posted on 02/24/2004 7:26:04 PM PST by Pukin Dog (Sans Reproache)
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To: Pukin Dog
Raytheon didn't steal, nor did Hughes, sorry you are wrong - again.
43 posted on 02/24/2004 7:26:57 PM PST by RKV (He who has the guns makes the rules.)
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To: RKV
last post to you. Do your homework.
44 posted on 02/24/2004 7:32:34 PM PST by Pukin Dog (Sans Reproache)
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To: Pukin Dog
until one of their smart people goes somewhere else and helps another company succeed by taking risks that TI was unable or unwilling to take.

Do you know how TI got noticed early-on in the semiconductor world?

They hired away a materials specialist named Gordon Teal who had worked at Bell Labs near the Shockley Lab and he figured out how to grow the pure germanium crystals that was used early on ... In 1952, Teal answered a want ad in the New York Times for a job at Texas Instruments.

45 posted on 02/24/2004 7:33:50 PM PST by _Jim ( <--- Ann C. and Rush L. speak on gutless Liberals (RealAudio files))
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To: AZLiberty
The proper role of a healthily functioning economy is to destroy jobs and put labor to use elsewhere.
Sounds like they only got one half of the equation figured out. In a healthy economy, people are pulled into new jobs, not pushed out.

46 posted on 02/24/2004 8:09:06 PM PST by sixmil
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To: Willie Green
Our fundamental "unearned" wage advantage is freedom. Freedom, coupled with human intelligence, inexorably creates wealth. As our freedom declines and the freedom of the rest of the world surges, our freedom advantage and hence our wage advantage will naturally be reduced.

More freedom worldwide, fortunately, will lead to an aggregate increase in wealth. Less freedom here at home will mean that we will earn a smaller piece of the bigger pie than we might otherwise have earned.

47 posted on 02/24/2004 9:26:54 PM PST by AZLiberty
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