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Offshoring and Lowered Expectations
Computerworld ^ | March 8, 2004 | Dan Gillmor

Posted on 03/08/2004 3:14:41 PM PST by Mini-14

MARCH 08, 2004 - One of the best things about living and working in Silicon Valley is the quality of the people. I'm frequently the least-knowledgeable person in the

room, and probably the stupidest. I get to learn from the ultrasmart and creative folks I meet.

So why do I have an uneasy feeling these days about the place, even as an economic recovery for the technology industry starts to gather steam?

One factor abounds with irony. A few years ago, I wondered if the Valley was sowing the seeds of its demise by creating the communications and collaboration tools that would make it much less necessary to be there in a physical sense. The near-unanimous consensus at the time among the top people in the field was that the Valley had nothing to worry about.

I never entirely bought their faith, though the Valley has repeatedly shown an ability to rebound to new heights after deep economic downturns. The recent evidence, notably the surge of offshoring, makes me ask again -- about the Valley and the entire nation.

And I wonder if something is genuinely different now.

Intel CEO Craig Barrett put his finger on it a few weeks ago when he stopped by my newspaper for a long chat with some reporters and editors. What's new this time, he told us in a persuasive way, is the nature of the global workforce.

For the first time in human history, Barrett said, a truly gigantic pool of well-educated, technically adept and eager-to-please labor is being created. This pool of talent, which will include hundreds of millions of people in China and India (many of whom speak English fluently), has another characteristic: a willingness to work for a fraction of what Americans expect.

This is not because they like living poorly. It's because local conditions and currency exchange rates make what would seem like a pauper's salary here a highly attractive one there.

The U.S. largely came to grips with a similar crisis in low-end manufacturing. We moved up the value chain as a society, painful as this was for the less-educated, hardworking people who lost middle-class jobs and had to settle for lower-paid service employment.

How high can we move on the value chain now?

I travel widely. One thing I know for sure is that Silicon Valley and the U.S. have no monopoly on brains or energy. We do have an advantage in promoting a culture of risk, of entrepreneurialism. But other places are beginning to adopt even that value, too.

The spectacle of politicians promoting trade wars in the name of stemming job losses is disturbing, if understandable. I wish they'd devote that energy to telling the harder truth: that the U.S. will need to buckle down in unprecedented ways, with vast new investments in education and infrastructure, plus a new commitment to the best aspects of entrepreneurialism.

We may be facing big trouble in the near term, no matter what we do. That's the kind of news few politicians dare deliver.

Barrett, running for no office, offered a hard truth. As he gave his litany of why conditions truly are different this time, we asked if this suggested a generation of lowered expectations in the U.S. "It's tough to come to another conclusion than that," he replied.


TOPICS: Business/Economy; Foreign Affairs
KEYWORDS: employment; h1b; l1; offshore; outsourcing; trade; unemployment
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To: eno_
"Unless we cut taxes, we will lose.

Unless we cut the cost of regulations, we will lose.

Unless we fire corrupt sandbagging public sector employees we will lose. "


All correct................who is gonna do it??

21 posted on 03/08/2004 4:08:36 PM PST by international american (Tagline!!)
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To: pabianice
You can't turn back time. The Dems demand that we do so. Let them explain how....

You believe in the myth of the rational voter. Democrats are already demagoguing outsourcing and have their own harebrained solutions to stop it. Democrats don't have to provide viable solutions. They just have to hammer it home how much "they feel" for busted down workers. Blue collar and white collar

22 posted on 03/08/2004 4:10:06 PM PST by dennisw (“The fear of the Lord is the beginning of knowledge: but fools despise wisdom and instruction.”)
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To: dfwgator
We are allowing foreign companies to get away with murder, vis a vis fair trade laws. We are being played for suckers.

Our regulations are obsene! Our taxes are too high. Then you got OSHA, Shyster lawyers, et al....we are in trouble!
23 posted on 03/08/2004 4:12:14 PM PST by international american (Tagline!!)
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To: dennisw
"Democrats don't have to provide viable solutions. They just have to hammer it home how much "they feel" for busted down workers. Blue collar and white collar"

Yep, and if it works, we will have a doctrinaire Marxist for a President. Happy days:)

24 posted on 03/08/2004 4:18:51 PM PST by international american (Tagline!!)
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To: pabianice
Sure you can stop it. It is just a creation of multi nationals. You can shut down multinationals - you do not even have to nationalize them, just tax them to death and make tech trasfers illegal (as most tech transfers were up until a few years ago.) ANd if you do not think that the voters will not do this then you are crazy. What we are talking about here is more devastating that the great depression,and in the age of thermo nuclear war much more deadly.

What are you taking about? There is nothing inevitable about it. Make outsourcing illegal and focus on making great technology while we still have the lead. If the EU wants to outsource, let them ruin themselves. But they won't. If we do it theywill follow. Outsourcing will come to be seen for what it is: suicide for the West. If not we will place a tariff on them too. India and China do not have the research infrastructure we have right now. Let us not help them get it. It is only inevitable if we lose our science and technology edge. We had the internet decades ago, this is a problem created by free trade elitists, it can be unmade. If we pulled out of the WTO, and stop building up the Chinese and the Indians the problem would just go away. At worst we could have a teired economic order.

It is ridiculous to imagine that there is "no escape." What a strange sentiment, it is merely a matter of trade policy, national security strategy, and science and tech nology strategy. That and voting the globalists out of power. What do you think it is, a force of nature? An act of God? And do not think the voter will not act in four years or so if this keeps up. Can they take our votes away that quickly? And if they do vote against outsourcing you can say bye bye to the GOP if that happens, and I mean bye bye for another 70 years. They will unionize every job in the country.

25 posted on 03/08/2004 4:20:04 PM PST by CasearianDaoist ((Nuance THIS!))
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To: CasearianDaoist
And we did not "recover" from the loss of manufacturing. That is one of the reasons we are so in debt.

And one of the main reasons for the permanent welfare class. As we move up the 'value chain. that class, consisting of those who cannot acquire higher skills and for whom there is no useful employment left, will continue to grow. Eventually, it will destroy all but the very top of the 'value chain' and result in a society much like that which we see in Mexico today.

26 posted on 03/08/2004 4:23:26 PM PST by templar
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To: CasearianDaoist
"Outsourcing will come to be seen for what it is: suicide for the West."

How many times have I posted here saying pretty much the same thing? Asia is laughing at us. India is hosing us.....Americans are too insulated; they don't travel enough. And our educational system has been taken over by globalist scum!

Rant done, and you are correct on all points.
27 posted on 03/08/2004 4:26:10 PM PST by international american (Tagline!!)
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To: templar
BINGO!!
28 posted on 03/08/2004 4:29:02 PM PST by international american (Tagline!!)
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To: eno_
Add also - Unless we gut the multi-million dallar salaries for corp. CEOs and the board members and all their buddies on the typical Mahogony Row of any major US business.

It might help to bring back 8-track tapes.

29 posted on 03/08/2004 4:30:31 PM PST by citizen (Write-in Tom Tancredo President 2004!)
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To: international american
I bring business franchises to America, and in a very small way, am bringing dollars back to America.

If I understand your statement correectly, you assist in transferring ownership of American business and assets to foreigners?

30 posted on 03/08/2004 4:33:46 PM PST by templar
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To: Mini-14
I have stopped feeling sorry for displaced s/w developers. These folks are generally intelligent and educated. They've probably noticed the h1-b/l1 encroachments coming for years (outsourcing shouldn't be a suprise). Although denial is understandable. Anyway...

1. The barriers to entry for developing a software product have got to be the lowest around - all ya need are a couple of guys, a living room (that's not gonna be foreclosed on for a couple of months), some computers (which everyone already has at least a couple of), and the s/w tools (which someone should have pirated from the company before they were let go).
2. Develop a product.
3. Sell it.

Being a slave to a corporation for a job is no way to go through life. F it - create your own job. Ok, this is a "sea change", a "paradigm shift", whatever. Goes against everything we were taught in public schools. I hope at some of them will see this as the opportunity it is. Word.

31 posted on 03/08/2004 4:35:22 PM PST by searchandrecovery (This tagline intentionally left blank.)
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To: CasearianDaoist
Yet almost no response from West but continued comma of consumption.
32 posted on 03/08/2004 4:37:23 PM PST by RussianConservative (Xristos: the Light of the World)
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To: dennisw
Sure we can stop. But it will stop itself. It is an unnatural condition. And to compare it to the invention of agriculture is silly, agriculture took millennia to establish. You cannot just turn a whole citizenry in the most advance country in history in to peasants in the course of one half of a generation! The elites tend to believe their Harvard sociologists all too much. It is a rejection of every precept of Modern Western Liberal civilization (liberal in the 19th century sense of the word.) Wait until you have internal "terrorism" from 200 million people. Wait until you have a protest march on the capital that is in the tens of millions.

How are you going to man your armies with, conscripts> (and brother, will you need armys.) These people are not geniuses, just a cosseted management class. They can be outfought. They have over reached, IMHO. THey are living in a dream world. One city nuked in asia and it all comes tumbling down.

33 posted on 03/08/2004 4:37:54 PM PST by CasearianDaoist ((Nuance THIS!))
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To: Mini-14
I have read some about John D. Rockefeller and J.P. Morgan and I believe they have been unfairly villified. J. P. Morgan said what is good for General Motors is good for the country. Of course he said that when multinational companies were the exception not the rule. It may be what is good for Toyota is good for the country after all, we have had that company reinvest its capital in very productive plants in this country, while at the same time Ford and General Motors seem to be putting capital to work outside our borders and at the same time exporting jobs that could pay for the cars that were being produced. It was Henry Ford after all who saw his workers as customers for his products. Corporate America today seems to have no such vision and the economic nationalism expressed by Morgan is viewed as something for antiquity.
34 posted on 03/08/2004 4:38:02 PM PST by Biblebelter
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To: pabianice; A. Pole
You forget one:

I know it sucks, but there is both precedent for and no escape from what is happening. Since the development of sedentary agriculture to now, every so many centuries, there is a quantum shift in how the world works. Sedentary agriculture, Roman legions, the serf system, the Renaissance, the Industrial Revolution, mass production, steam power, electric power, nuclear power, computers, the internet, a 24 hour international market. Chinese slave power...and it will defeat US and West....oh but that is powered by West Greed Power.

35 posted on 03/08/2004 4:39:54 PM PST by RussianConservative (Xristos: the Light of the World)
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To: CasearianDaoist
It is ridiculous to imagine that there is "no escape." What a strange sentiment,...

I think that the 'no escape' statement is more an attitude from the elites end of things. It has to do with the elites believing that the world is entirely under their control and at their mercy and no escape will be allowed. They believe they will get what they want and no one, no nation, can stop them. They may well be right.

36 posted on 03/08/2004 4:44:35 PM PST by templar
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To: templar
Eventually, it will destroy all but the very top of the 'value chain' and result in a society much like that which we see in Mexico today.

No, it will be like the societies that were in Europe 500 to 600 years ago.

37 posted on 03/08/2004 4:51:51 PM PST by CasearianDaoist ((Nuance THIS!))
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To: templar
Eventually, it will destroy all but the very top of the 'value chain' and result in a society much like that which we see in Mexico today.

A return to serfdom?

38 posted on 03/08/2004 4:56:15 PM PST by sarcasm (Tancredo 2004)
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To: CasearianDaoist
Wealth creation lies in manufacturing and engineering. If we do not lead here we are doomed to follow.

200 years ago, wealth creation was clearing a plot of land.
100 years ago, wealth creation was building a factory.
20 years ago, wealth creation was designing a chip.
10 years ago, wealth creation was creating software.

All of this has led us to the situation where food, manufactured products, processing power, and software are, roughly speaking, free -- created for us with historically unimaginable quality by highly efficient equipment (including robots) or relatively inexpensive foreigners.

Yes, we have to figure out how to earn the relatively little money needed nowadays to live reasonably well, but more important the market needs to figure out the meaning of wealth for the next generation.

The answer lies somewhere in Maslow's hierarchy.

39 posted on 03/08/2004 4:56:19 PM PST by AZLiberty (Capitalism presumes we possess a traditional endowment of morals -- F. A. Hayek)
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To: Mini-14
We moved up the value chain as a society, painful as this was for the less-educated, hardworking people who lost middle-class jobs and had to settle for lower-paid service employment.

But what about their "standard of living"? After all they can get a VCR for about 50 bucks, a popcorn maker for 15, or a microwave for 50, rent a multi-million dollar movie for 2...what more do they want?...How much better could life be? < /sarcasm >

40 posted on 03/08/2004 4:56:44 PM PST by lewislynn (The successful globalist employee will be the best educated, working for the lowest possible wage.)
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