The software industry clearly is in dramatic upheaval. Some 90 percent of software start-ups have gone out of business, and many of the rest are likely doomed. Yes, newly funded software start-ups are required by venture capitalists to do their product development offshore, and chief information officers are aggressively using offshoring to reduce their operational IT costs.
Meanwhile, the domestic IT services industry is being ravaged by deflation. Independent consultants today command half or less of their pre-2000 billing rates, as the labor arbitrage between the United States and India quickly erodes.
All these realities are well-documented in the press. To me, however, they are symptoms of a different and much more interesting trend.
It is easy to miss the fact that we work in the most violently catalytic industry at the fastest-paced moment in human economic history. We overlook the fact that we are largely responsible for the return of amazingly high productivity rate gains in the U.S. economy (and soon, the world economy). The price we pay for this success is volatility: the sacrifice of the individual for the good of the whole.
The price we pay for this success is volatility: the sacrifice of the individual for the good of the whole.
Legacy code is replaced by modern, off-the-shelf software packages. Custom-coded enhancements to software packages are replaced by highly configurable upgrades to those same packages. User help desks are bypassed by people who learn to solve problems themselves with knowledge management programs and databases. Tough business integration problems ultimately get solved by true software standards, accepted business object definitions and Web services.
Ultimately, the holy grail of codeless development using great software design tools will be discovered. By then, the loss of jobs to offshoring won't seem so important after all.
That's scary. What jobs will be left, then? The new jobs that haven't even been thought of yet, the kind that always arise out of creative destruction, the ones that will surely emanate from the United States because that's where the creative forces thrive.
So what do we do until they arrive? Thankfully, we are the smartest, most adaptive workers in the history of the world. We look for the light and go for it, like the laid off tech worker who started a new business selling T-shirts reading, "I lost my job to offshoring, and all I got was this lousy T-shirt!" We hunker down and use our survival instincts.
For our reward, just look at what is a short way ahead of us in IT: virtually free hardware and network bandwidth (Gilder's telecosm is really arriving); unimaginable computing power (growing indefinitely at Moore's law); limitless, virtually free data storage; increasingly intelligent, self-learning applications; evolving, highly integrated business transaction networks; highly personalized, instantaneous self-service systems.
All of these tools will liberate us to the point where we are constrained mainly by our imaginations.
Biography
Marc Hebert is executive vice president of Sierra Atlantic, a Silicon Valley-based application development company that has a branch in India.
The jobs and roles will focus on how to create new value in systematic ways through innovation and new methods for truly collaborating. The future is being designed right now if we are brave enough to step out from shadows and into the forefront. Just like history, the outsourcing of today will ultimately pass once American companies get the courage to trash the old systems and start to truly think, behave and execute with more zest and reward those behaviors. This will be the value proposition of IT in the future...
Well, we still have mainframes and LANs have indeed tranformed communication.
Offshoring has nothing to do with technological advancement. It has to do with money.
Economics pushes jobs overseas and to Mexico. They have the cheap supply and we have the demand.
It's also a reality that the best workers go where they can make the best living. The future, at least in the short run, brain drain for the US and a lower standard of living for those who stay.
The result of outsourcing will be more and more compaints due to the lack of quality and the problems resulting when things go wrong.
However some smart companies will use this to show that they care about their customers and do not outsource as much as their competitors.
If nothing else, they're training their own competition.
Here is the simple ugly truth: off-shoring to places like India is effective because the average standard of living is so much lower there. The vast majority of people live in conditions of squalor that make our worst slums look like pleasure palaces. The long-term effect on America will be to lower our average standard of living in order to bring it more in line with the worldwide average. This effect has been temporarily delayed because technology improved quickly enough to allow us to transfer workers from industrial jobs to information jobs. However, the ability of countries like India to absorb jobs is increasing much faster than our ability to create new ones.
What is the solution for us, as a nation?
1) Reassess our priorities. Our consumption is pleasure-oriented instead of future-oriented. We need much more investment in things like infrastructure, training, and research. The money for this will have to come from things like pets, cosmetics, junk food, SUVs and sports cars, big suburban homes, throwaway electronics, rapidly-changing fashions, season tickets, etc.
2) Level the playing field. Either get rid of expensive regulations, domestic programs, and legal systems that protect American workers and the environment, or else force off-shore producers to obey these regulations and implement such programs and systems. Free-enterprise and capitalism do not care about people dying in the streets or species extinction down-river. Investment will flow to wherever it generates the most return.
3) Conserve energy and develop alternatives to oil. Importing oil is a big drag on our economy and a political handicap. Drive a fuel-efficient car. Move close to work. (This is a biggie! Which is better: a car that gets 20% more mpg, or a daily commute that is 2 miles instead of 30 miles?) Encourage partial telecommuting. (Too much and you get outsourced!) Encourage teleconferencing. Use less heat and AC. (Why is my office colder in summer than winter?)
4) Forget this idiocy about making America a multilingual society. One of our big economic advantages is that we speak English, the lingua franca of world trade, better than anyone else (except perhaps the English). Why undermine that? Certainly, encourage immigrant families to keep their language alive -- that can be a useful skill -- but not at the expense of proficiency in English. And here's another thought: instead of offering French and German in high schools, shouldn't we be offering Mandarin (spoken by a billion Chinese) and Arabic (the lingua franca of a billion Muslims)?
engineer (someone that is involved in the hands
on production of hardware, software or mechanical
engineering designs) extolling the virtues of
outsourcing. Some engineers feel that it is
a force that can't be stopped (and some of these
are leaving the profession). Some feel that
we are reaping what we have sown (automation has
put lots of people out of work). A few buy into
the idea that it will all be for the best in the
end. But even those who buy into this article
of faith are not too happy about the whole process. Playing to part of roadkill on the
highway to a brighter future is not
much fun. Espeically if that brighter future
turns out to be fantasy anyway.
Of course none of this is much of a surprise.
Few people are going to think that higher
unemployment, less job security and lower pay
are good things, at least when it applie to them.
Although engineers and other professionals
are increasingly insecure, we have not seen
any decline in executive pay, especially CEO
pay.
Only those who are involved in profiting from
moving jobs overseas think that all this is
for the best, in this best of all possible worlds.
Which brings us to the question of why C/Net
is constantly running these editorial. Perhaps
it is to suck up to their advertisers. It
certainly is not something that is likely to
appeal to their readers. The replies to these
editorials is almost universally negative.
How about running an editorial from the
Communications Workers of America? As the
organization that is behind TechsUnite and
other engineering organizations I suspect that
they have a different view on the virtues of
offshore outsourcing.