IBM Explores Shift Of White-Collar Jobs Overseas

[Mark Herschberg]

Originally posted by shay Aluko:

Sorry Jon, i think you got it wrong, the situation is this, you will NOT be competing against your peers in the United States for the simple reason that there ARE NO JOBS TO COMPETE for.

And yet we still have manufacturing jobs in the US, albeit fewer. We still have autmotive jobs, albeit fewer. We still have jobs in the clothing industry, albeit fewer and of a significantly different type.
Recent history suggests that while jobs will move overseas, the industry will not dry up completely.
--Mark

[Al Newman]

Originally posted by Tim Holloway:

---

Network computing. Remember, it took Microsoft 3 tries to get "Pocket PCs" right. But they kept trying. A new network computer is coming out for $165/unit. It's based on the idea that web services are the way to work (Don't laugh - hosted versions of MS-Word have been rumored for years). We'd probably be further along if PCs hadn't dropped in price so much, but at some point the support costs for smart PCs outweigh their benefits for most office uses.

---

Hmmm, do you really believe that Micro$oft is aiming a $165 computer at the office? Seems to me that it may be aimed at that box that Wal-Mart is pushing at less than $200 a pop. I think it uses a simple version of Linux for the O-system.

Originally posted by Tim Holloway:

I'm positing a dire scenario for the simple reason that if you expect the worst, you'll have some idea of how to handle the bad. India alone has 3 times the U.S. population and thus could handle their own (sofar limited) IT needs and STILL spare people to take over US jobs, but that's not the whole story, since a lot of India is undereducated. It remains, however, that in the current tight labor market there are those of us who are bidding for work and getting slapped down because companies are focussing on quantity and lot quality. The REAL proof (or disproof) will be when the economy takes off again and either the jobs will open up or they won't. Myself, I don't believe that all things work for the best in this Best of All Possible Worlds or that God will exempt me from the age-old drive that employers have to try and commoditize IT despite frequent lessons to the contrary, or my oft-proven genius.

It's not the 'best of all possible worlds. Nor the converse. You and I aren't buggy-whip manufacturers in 1908, either. The programmers in India tend to come from the top universities and perhaps the second-rank ones as well. No more than about 2-3% of the young people coming of age (in total). And from this pool also come the stock analysts, accountants, and other professionals who are also being outsourced. We're not looking at a pool of a billion people, at most a few million. Of whom a fraction will be qualified programmers.
You are absolutely correct that the proof of the pudding is when the economy starts to take off again. I think demand will leap at that point.

Originally posted by Tim Holloway:

Indian IT salaries have seen some upward movement lately because of the old supply-and-demand. However when they're getting paid 1/10th an American salary that doesn't change much (well for them it does ). To get that other 9/10ths either Indian programmers are going to end up being paid like Indian doctors or the entire Indian economy is going to see horrific inflation. Although even if they got paid even HALF as much as we do, they'd be less a "no-brainer" choice for labor.

I think Indian programmer salaries are between 40 and 50% of US levels, at least in centers such as Bangalore. I don't know about the hinterland. Indian offshoring companies are actually offshoring themselves to cheaper places, but I doubt they will find the quality of labor they need.

Originally posted by Tim Holloway:

I'm not picking on India specifically, as I've mentioned before. They're simply the most visible example. Next week Uganda could be the low bidder and the only thing that would keep the Indians out of the same boat is that Uganda doesn't have as large a labor pool.

Successful offshoring depends upon having a largish pool of people who can program and who can speak and read fluent english. Ireland has been a big success in offshoring, Poland has not. India is a success but Uganda and China are going to have some major problems doing as well as India has. India's big secret has been that it has the largest pool of fluent english-speaking talent in the word.

Originally posted by Tim Holloway:

Anyway, I'm off to my first job interview since last October. Wish me luck!

Yoiks! You have it much worse than I have had it! I was laid off last November and have had 10 or more interviews. Actually landed 2 contract gigs which fell through out of hard luck.
Good luck, dude....
[ July 24, 2003: Message edited by: Alfred Neumann ]

[JiaPei Jen]

This is what I always feel about Mark Herschberg's postings:
completely off the track!!!

[Jon McDonald]

Originally posted by shay Aluko:

Sorry Jon, i think you got it wrong, the situation is this, you will NOT be competing against your peers in the United States for the simple reason that there ARE NO JOBS TO COMPETE for.

Then where in the world are all of my friends who are software engineers going everyday when they say they are going to work? Oh, I know, They are flying to Banglore from Chicago every morning. Now thats a commute!! Or maybe they are just lying to me and they really work at Burger King.

This is not a situation where a project leaves the country, this a situation where an entire INDUSTRY leaves the country.

As has been stated before, even when there is a major exodus in a field, there still are some positions In that field in the U.S. I actually know people who (still) work in automobile plants. And that industry "left" the US years ago. Do you think the DoD, CIA and the NSA or even all of the major research labs (Argonne, Fermi Lab) are going to export all of their custom software development overseas? Maybe a lot of the big financial institutions and Software manufacturers, but those enviornments are not places I particularly want to work in anyway.

Its simple-minded to say that you simply train in a new field, i believe to get yourself to any level of competence in this IT field regardless of how intelligent you are, you need to invest a few years.Do you feel like throwing that away and starting in a new field like say, Nursing?, you don't like that do you? thought so.

I think it is simple minded to underestimate your or my skill set and ability to adapt. I actually have retrained before to go into another field. That's how I got into IT. And as far as selecting a new field, in no way do I think I would be "throwing away" all of my knowledge. In fact, I believe (and the experience of myself and others has shown) that it would give me an advantage coming from a different industry.
As a matter of fact, thats how I got my last two tech jobs. I got one, not because I was the greatest Java programmer in Washington D.C., but because I could code AND I new U.S. national security policy well (I was an International Relations Major, not a CS Major, in College). I got my second job doing database development, not because I was a SQL god, but because I had worked (in a non-technical capacity) for a law firm for 3 years.
In my opinion, the key to surviving and thriving in any industry for the forseable future is adaptability.
Jon.
P.S. If it wasn't for how many doctors treat nurses, I seriously would have considered the profession. Nurse Practitioners are gaining greater legal autonomy.
[ July 24, 2003: Message edited by: Jon McDonald ]

[HS Thomas]

quoted from Alfred Neumann's post :
India is a success but Uganda and China are going to have some major problems doing as well as India has. India's big secret has been that it has the largest pool of fluent english-speaking talent in the word.

Not so sure about this. If a survey was done today, you'd find more English speaking Chinese,
worldwide.
In China , a significant part of earnings is spent on part-time or full-time education in an English speaking medium.
The Chinese (world-wide) have a certain amount of autonomy. Peter Drucker touched on this, some 30 years ago, in some of his Management books. We are now in the middle of some of his predictions and the seeds have been sown for some serious innovation.
That doesn't help much living on a day to day basis.
regards
[ July 25, 2003: Message edited by: HS Thomas ]

[shay Aluko]

Originally posted by Jon McDonald:

quote:
--------------------------------------------------------------------------------
Originally posted by shay Aluko:
Sorry Jon, i think you got it wrong, the situation is this, you will NOT be competing against your peers in the United States for the simple reason that there ARE NO JOBS TO COMPETE for.
--------------------------------------------------------------------------------

Then where in the world are all of my friends who are software engineers going everyday when they say they are going to work? Oh, I know, They are flying to Banglore from Chicago every morning. Now thats a commute!! Or maybe they are just lying to me and they really work at Burger King.

You still don't get it do you?, let me explain a little bit more, this discussion focuses on a trend and the direction the software field is going not where it is now. Sure enough your friends are going to work, whererever they work. That is immaterial to this discussion. The issue is where will they (and you) be working a few years from now when there few or no jobs to compete for. That is what the discussion i focussing on; not just the situation as it is today but the DIRECTION of the industry.

[Tim Holloway]

OK, I'm going to make a stab at gathering some subthreads together here.
The $165 Network PC. Microsoft gets very little revenue from hardware, so given a choice, they'd rather sell Windows - or better yet, rent it. However, the $165 Network PC I'm specifically referring to is a diskless Linux system. In the grand old IT tradition of What Goes Around Comes Around, it's attempting a return to the days of time-share style centralized computer systems. Except using MUCH smarter terminals. Enterprises do like centralized IT - it's a heck of a lot easier (and cheaper) to manage than having to ride herd on each individual department.
Uganda. Actually, I think I pulled that one off the top of my head. Kenya (I think it was), on the other hand already[/b] is being tapped by Satyam (India) for cheap labor (cheaper than Indian programmers, that is). Like India, much of Africa speaks English as a common language. China is still iffy to me, since there are a lot fewer people speak English good grammar right word than actually speaking English. If you get my meaning. If not, go back and look at some of the sometimes-cryptic messages here on the JavaRanch by Chinese posters.
I have some scanner software written by Japanese programmers. It shows. Then again, you don't want me coding apps in Chinese or Japanese!
On the Auto Industry. This is NOT a good example. The automobile is part of the American Identity. Not only do auto manufacturers carry a lot of clout in Congress, but the American consumer carries a bias towards American brands. When was the last time you heard anyone say "I guess I'll buy American and go with Microsoft Office instead of Corel"? Manufactured Consumer Electronics, on the other hand carries no such biases, and we're almost completely out of that business.
Your friends may be going off to work programming this morning, but I'm not. Nor are thousands more like me. A fair number of MY friends that were going off to work last June aren't doing so today.
This is where we're actually carrying on 2 similar, but non-intersecting conversations. My contratulations to all out there who have (so far at least) been so wonderful (or so lucky) as to not get tossed out on the street and had to spend months unsuccessfully trying to find a new position. Or who got tossed out and managed to snag a new one almost immediately. Unfortunately, this is not a universal experience, even among those of us who are credited with a greater than average level of skill and talent. Or perhaps, [i]especially among us who are less of a commodity, and therefore are at more of a disadvantage when trying to bid in a market that's obsessed with price, price, and price.
Indian programmer salaries are NOT making 50% of US salaries. They average more like 1/8 to 1/10th. The rest of the cost of offshore labor is the middlemen, and they're not starving at the moment. My $25/hour competing bid wasn't coming from an independent offshore programmer. It was coming from a consulting agency with a whole team of cheap programmers. And $25 is the average. Almost none of the many bids I've seen goes over $30/hour.
I've been in this industry for over 20 years now. In two of the recessions over that span of time I was unemployed. The longest it ever took me to find something then was 7 months. This time, I'm on my 28th month, and somehow I don't think it can be solely due to age discrimination. I carry a lot of raw talent, but it's IT talent. I'm not a salesman, except in the sense that my talent can sell itself if I can get in the door. Formerly headhunters filled that gap for people like me. These days, headhunters are mostly in hiding. Business is no longer "as usual".
But. What the job market may be for me or for thee is only tangental to the real issue under discussion. The real question is what happens if literally millions of jobs exit the country in a fairly short time? Not just IT jobs, but EVERY job that doesn't require the worker to come in physical contact with someone or something that can't also be moved offshore. Because that's the extrapolation when cost is the only object. When one industry goes offshore, we shift to a new one. But when the rate of offshoring exceeds the rate at which new industries are created, you get more and more competition for a smaller and smaller pie. After a time, the competition is so intense that even for the most skilled, success becomes as much a matter of chance as of skill. Sometimes all it takes to disqualify you for a job is the misfortune to be wearing the same style of necktie as the decision-maker's idiot brother-in-law. Not logical, but nonetheless true. Besides, it it reallt all that good when your skill at salesmanship becomes more important than your technical skill?
The U.S. went through an entire generation of underemployment from about 1928-1944: The Great Depression. It permanently scarred many who lived through it - even today people who were young back then have a different attitude towards money and life than the rest of us.
However, there was no one to blame really for the recession. It was in large part considered justly-earned payback for the excesses of the '20s. This time we have the potential scenario that unemployed masses will be angrily looking overseas at "Those #$%#%% furriners who Took All Our Jobs!!!". That kind of situation is tailor-made for a demagogue like a Hitler or a McCarthy to exploit. I'd just as soon avoid WWIII myself, thankyouverymuch.
The consequences of indiscriminate offshoring are potentially dire. I don't think we're likely to solve the problem here. But let's stay focussed on the big picture here. Some of us may be fortunate (or, if you prefer, exceptionally skilled), but a lot of very good people won't and there's no point in simply blowing one's own horn and saying "it can't happen to me". Especially since Crow is reputedtly a most unpleasant-tasting dish.
It's in everyone's interest to find ways for globalization to work to everyone's benefit. We're not going to stop it, and I don't think we should. We simply need to make sure that we all become the beneficiaries rather than the victims.

[HS Thomas]

Kenya (I think it was), on the other hand already[/b] is being tapped by Satyam (India) for cheap labor (cheaper than Indian programmers, that is). Like India, much of Africa speaks English as a common language.

I hadn't known that. That would make India even more competitive. India *does* have a 50 year history of losing the majority of their better doctors,nurses and teachers to Africa due to economies.
But I still think a lot of INNOVATION is going to come out of China at some point in the future , even if it's just taking old ideas and making them better.But the impetus for change will come from outside China. The main reason I feel so is their culture and history. Unless they get *Westernised* too rapidly. How does one huge amalgam compete with itself.
regards
[ July 27, 2003: Message edited by: HS Thomas ]