Posted by In-Cog-Nito on January 29th, 2004 (All posts by In-Cog-Nito)
Lex sent me an excellent article yesterday about the effects of offshoring U.S. IT jobs.
It’s very readable and compelling. I like the analogy the author uses with movies and the portrayal of computers at the work place:
“The growing détente was reflected in 40 years of Hollywood films. Desk Set, from 1957, was about a research department head who keeps her job only after a battle of wits with a computer (the machine blows up). By 1988, the computer had moved from threat to weapon: In Working Girl, Melanie Griffith has both a stock market terminal and a PC on her desk and uses her skills and knowledge to move from secretary to private office. By the time Mike Judge made Office Space in 1999, the PC had faded into just another bit of cubicle furniture.”
I found another good article that makes a similar argument albeit slower to read and more numbers oriented.
I like the analogy this article makes comparing the rise of IT India to the proliferation of the desktop computer. There’s no catchy line, so I’ll try to spell it out. When computers first started, the money was in making stuff like DRAM and chips. But chips were expensive to make, so computers were expensive to buy. With the offshoring of chip production, computers became a cheap commodity, and we have mass proliferation of the desktop PC. With a PC on every office desk, productivity soared.
Like PC’s, the money now is in writing code and trying to make sense of all that computing power. By extension, the final product is prohibitively expensive, such as an integrated SAP or Oracle system. It’s expensive, so only the richest companies can use it to boost productivity. So if you can offshore and decrease the cost of technology by magnitudes, you make technology more accessible to more people. And as this previously expensive technology proliferates, you get another jump in productivity.
Creative destruction has been the rule for centuries, and it’s still the rule now. I probably should have picked up on it earlier, but it’s the most compelling argument I’ve heard for offshoring service jobs to India. I’m liking this offshore idea more and more now.