Silicon Age, part two
A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all but two countries. Fifty years ago, most of the US labor force worked in factories. Today, only about 14 percent is in manufacturing. But we've still got the largest manufacturing economy in the world - worth about $1.9 trillion in 2002. We've seen this movie before - and it's always had a happy ending. The only difference this time is that the protagonists are forging pixels instead of steel. And accountants, financial analysts, and other number crunchers, prepare for your close-up. Your jobs are next. After all, to export sneakers or sweatshirts, companies need an intercontinental supply chain. To export software or spreadsheets, somebody just needs to hit Return.
What makes this latest upheaval so disorienting for Americans is its speed. Agriculture jobs provided decent livelihoods for at least 80 years before the rules changed and working in the factory became the norm. Those industrial jobs endured for some 40 years before the twin pressures of cheap competition overseas and labor-saving automation at home rewrote the rules again. IT jobs - the kind of high-skill knowledge work that was supposed to be our future - are facing the same sort of realignment after only 20 years or so. The upheaval is occurring not across generations, but within individual careers. The rules are being rewritten while people are still playing the game. And that seems unjust.
Couple those changed rules with the ham-fisted public relations of the American companies doing the outsourcing and it's understandable why programmers are so pissed. It makes sense that they're lashing out at the H1-B and L-1 visas. US immigration policies are a proxy for forces that are harder to identify and combat. It's easier to attack visible laws than it is to restrain the invisible hand. To be sure, many of these policies, especially the L-1, have been abused. American programmers have done an effective job of highlighting these abuses - and during an election year, Congress will likely enact some reforms. But even if these visa programs were eliminated altogether, not much would change in the long run.
Patni's head of human resources, Miland Jadhav, compares the Pissed-Off Programmers' efforts to the protests that greeted Pizza Hut's arrival in India. When the chain opened, some people "went around smashing windows and doing all kinds of things," but their cause ultimately did not prevail. Why? Demand. "You cannot tell Indian people to stop eating at Pizza Hut," he says. "It won't happen." Likewise, if some kinds of work can be done just as well for a lot cheaper somewhere other than the US, that's where US companies will send the work. The reason: demand. And if we don't like it, then it's time to return our iPods (assembled in Taiwan), our cell phones (manufactured in Korea), and our J. Crew shirts (sewn in Indonesia). We can't have it both ways.
Still, if you're 61 years old, it makes sense to borrow a page from Charlie Chaplin and try to throw a wrench into the machine. John Bauman is 61 years old. More than a year ago, Northeast Utilities fired Bauman and 200 other IT consultants. From his home in Meriden, Connecticut, he created the Organization for the Rights of American Workers. The mission: to protest H1-B and L-1 visas. He feels that if he can slow things down, he stands a chance. When I speak to him by phone one afternoon, I offer the standard defense of globalization and free trade - that they disrupt in the short term but enrich over time. But it's hard to make this argument with much gusto to a man who, faced with his unemployment benefits running out, had to take a temporary job delivering boxes for FedEx. The invisible hand is giving him the finger. A compassionate society must somehow help its John Baumans.
But the rest of us, like it or not, will have to adjust. The hints about how to make this adjustment are evident at Patni. As I meet programmers and executives, I hear lots of talk about quality and focus and ISO and CMM certifications and getting the details right. But never - not once - does anybody mention innovation, creativity, or changing the world. Again, it reminds me of Japan in the '80s - dedicated to continuous improvement but often at the expense of bolder leaps of possibility.
And therein lies the opportunity for Americans. It's inevitable that certain things - fabrication, maintenance, testing, upgrades, and other routine knowledge work - will be done overseas. But that leaves plenty for us to do. After all, before these Indian programmers have something to fabricate, maintain, test, or upgrade, that something first must be imagined and invented. And these creations must be explained to customers and marketed to suppliers and entered into the swirl of commerce in a fashion that people notice, all of which require aptitudes that are more difficult to outsource - imagination, empathy, and the ability to forge relationships. After a week in India, it seems clear that the white-collar jobs with any lasting potential in the US won't be classically high tech. Instead, they'll be high concept and high touch.
Indeed, Kirwin, the programmer in Delaware, partly confirms my suspicion. After he lost his job at J.P. Morgan, he collected unemployment for three months before he found a new job at a financial services company he prefers not to name. He's now an IT designer, not a programmer. The job is more complex than merely cranking code. He must understand the broader imperatives of the business and relate to a range of people. "It's more of a synthesis of skills," he says, rather than a commodity that can be replicated in India.
Kirwin still believes the job is "offshorable," though I'm less certain. And he's earning less than he did at J.P. Morgan, though the downturn is much to blame for that, as it is for at least part of the broader anxiety that programmers are feeling.
But Kirwin does begin to address Senator Turner's question. Back in New Jersey, she introduced what appeared to be an unanswerable riddle: What comes after knowledge? The answer, perhaps, is an update of the slogan that appears in giant steel-and-neon letters on the Trenton Bridge, just a few miles from Turner's office. That slogan, affixed to the bridge in 1935 to proclaim the region's manufacturing strength, reads TRENTON MAKES - THE WORLD TAKES. Now that the rest of the world is acquiring knowledge, and we're moving to work that is high concept and high touch, where innovation is essential but the path from breakthrough to commodity is swift, the more appropriate slogan - of both admonition and possibility - might be this: AMERICA DISCOVERS. THE WORLD DELIVERS.
It's a soggy, breezy Saturday afternoon - and I'm hanging out with Aparna Jairam and her husband, Janish, in their comfortable sixth-floor flat in suburban Mumbai. Janish, who also works in the IT industry, is a genial fellow whose laid-back friendliness nicely complements his wife's quiet intensity. We're drinking tea, eating vadas, and discussing the future.
"Someday," Janish says, "another nation will take business from India." Perhaps China or the Philippines, which are already competing for IT work.
"When that happens, how will you respond?" I ask.
"I think you must have read Who Moved My Cheese?" Aparna says to my surprise.
Janish gets up from the couch, and to my still greater surprise, pulls a copy from the bookshelf.
Who Moved My Cheese? is, of course, one of the best-selling books of the past decade. It's a simpleminded - and, yes, cheesy - parable about the inevitability of change. The book (booklet is more like it - the $20 hardcover is roughly the length of this article) is a fable about two mouselike critters, Hem and Haw, who live in a maze and love cheese. After years of finding their cheese in the same place every day, they arrive one morning to discover that it's gone. Hem, feeling victimized, wants to wait until somebody puts the cheese back. Haw, anxious but realistic, wants to find new cheese. The moral: Be like Haw.
Janish gave Aparna a copy of the book for their wedding anniversary last year. (He inscribed it, "I am one cheese which won't move.") She read it on a Hexaware commuter bus one morning and calls it "superb."
The lesson for Aparna was clear: The good times for Indian IT workers won't last forever. And when those darker days arrive, "We should just keep moving with the times and not be cocooned in our little world. That's the way life is." Or as Haw more chirpily explains to his partner, "Sometimes, Hem, things change and they are never the same. This looks like one of those times. That's life! Life moves on. And so should we."
If you're among the pissed off, such advice - especially coming from talking rodents chasing cheddar around a maze - may sound annoying. But it's not entirely wrong. So if Hem and Haw make you hurl, return to where Aparna began when I met her that first day - the sacred text of Hinduism, the Bhagavad Gita, whose 700 verses many Indians know by heart.
The Gita opens with two armies facing each other across a field of battle. One of the warriors is Prince Arjuna, who discovers that his charioteer is the Hindu god Krishna. The book relates the dialog between the god and the warrior - about how to survive and, more important, how to live. One stanza seems apt in this moment of fear and discontent. "Your very nature will drive you to fight," Lord Krishna tells Arjuna. "The only choice is what to fight against."
Computers threatened our jobs, but ultimately made us stronger. So will outsourcing.
by Chris Anderson
Worried about India's practically infinite pool of smart, educated, English-speaking people eager to work for the equivalent of your latte budget? Get used to it. Today's Indian call centers, programming shops, and help desks are just the beginning. Tomorrow it will be financial analysis, research, design, graphics - potentially any job that does not require physical proximity. The American cubicle farm is the new textile mill, just another sunset industry.
The emergence of India is the inevitable result of the migration of work from atoms to bits: Bits can easily reach people and places that atoms cannot. India's roads and politics are still a mess, but cheap fiber and a glut of satellite capacity have liberated an army of knowledge workers. Never before have we seen such a powerful labor force rise so quickly.
Jessica Wynne
There is some solace in history. Agricultural jobs turned into even more manufacturing jobs, which decades later turned into even more service jobs. The cycle of work turns and turns again. Neat.
Of course, there's another part of the cycle: anxiety. It used to be that factory workers worried, but office jobs were safe. Now, it's not clear where the safety zone lies. It's not a matter of blue collar versus white collar; the collar to wear is Nehru.
For US workers, the path beyond services seems uncertain. But again, history provides a guide. Thirty years ago, another form of outsourcing hit the US service sector: the computer. That led to a swarm of soulless processing machines, promoted by management consultants and embraced by profit-obsessed executives gobbling jobs in a push for efficiency. If today's cry of the displaced is "They sent my job to India!" yesterday's was "I was replaced by a computer!"
Then, as now, the potential for disruption seemed infinite. Data crunching was just the start. Soon electronic brains would replace most of the accounting department, the typing pool, and the switchboard. After that, the thinking went, the modern corporation would apply the same technology to middle management, business analysis, and, ultimately, decisionmaking. If your job was emptying an inbox and filling an outbox, you were begging for someone to draw the I/O analogy - and act on it. Indeed, computer terminology is littered with traces of what were formerly jobs: printers, monitors, file managers; even computers themselves used to be people, not machines.
Computers have, of course, reshaped the workplace. But they have also proved remarkably effective at creating jobs. Bookkeepers of old, adding columns in ledgers, are today's financial analysts, wielding Excel and PowerPoint in boardroom strategy sessions. Secretaries have morphed into executive assistants, more aides-de-camp than stenographers. Typesetters have become designers. True, in many cases different people filled the new jobs, leaving millions painfully displaced, but over time the net effect was positive - for workers and employers alike.
At the same time, we learned the limits of computers - especially their inability to replace us - and our fear of a silicon invasion diminished. 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.
We are now in the Desk Set period with India. The outsourcing wave looks awesome and unstoppable. Like the mystical glass house of the 1970s data processing center, India's outsourcing industry thrums with potential and power, as if it were itself a machine. Today, the outsourcing phenomenon is still mostly in the batch-processing stage: Send instruction electronically, receive results the same way the next morning. But the speed at which the Indian tech industry is learning new skills is breathtaking. Some US firms now outsource their PowerPoint presentations to India, a blow to the pride of managers everywhere. From this perspective, India looks like an artificial intelligence, the superbrain that never arrived in silico. No wonder workers tremble.
But the Melanie Griffith phase is coming, as is the Mike Judge. It's not hard to see how outsourcing to India could lead to the next great era in American enterprise. Today, even innovative firms spend too much money maintaining products: fixing bugs and rolling out nearly identical 2.0 versions. Less than 30 percent of R&D spending at mature software firms goes to true innovation, according to the consulting firm Tech Strategy Partners. Send the maintenance to India and, even after costs, 20 percent of the budget is freed up to come up with the next breakthrough app. The result: more workers focused on real innovation. What comes after services? Creativity.
Chris Anderson (ca@wiredmag.com) is Wired's editor in chief.
US jobs are fleeing overseas...
United States
GDP per capita $35,060
Unemployment rate 5.8%
Labor force 141.8 million
Population below the poverty line 13%
Typical salary for a programmer $70,000
... and heading to the subcontinent ...
India
GDP per capita $480
Unemployment rate 8.8%
Labor force 406 million
Population below the poverty line 25%
Typical salary for a programmer $8,000
Top 5 US Employers in India
General Electric 17,800 employees
Hewlett-Packard 11,000 employees
IBM 6,000 employees
American Express 4,000 employees
Dell 3,800 employees
... where the work gets done for a fraction of the price.
FEATURE:
The New Face of the Silicon Age
PLUS:
The Indian Machine
Will Work for Rupees
The Outsourcer
The Outsourcer
This man just convinced the CEO to send your job to India. Kiss your cubicle good-bye.
by Josh McHugh
US companies are expected to ship more than 200,000 service jobs to countries like India every year for the foreseeable future. The simple concept at the root of this trend: A trained third world brain is every bit equal to a trained American brain, at a fraction of the price. Which is not to say a CEO's decision to embark on an outsourcing strategy is ever simple. By nature, CEOs are averse to appearing heartless by taking a job from a member of the community and handing it to someone very far away. When it comes time for such ruthlessly efficiency, a CEO needs motivation. He needs a management consultant.
Matthew Mahon
Gut-wrenching change is always good business for consulting firms, and outsourcing is no exception. After two horrible years for the consulting industry, spending on consulting services is expected to jump 9 percent over the next two years, invigorated by the sudden need for advice on sending tech jobs abroad, according to Kennedy Information. In the last few years, the major consultancies have all beefed up their outsourcing divisions.
For an inside take on the consultant's role in pushing jobs overseas, listen to Mark Gottfredson. As cohead of outsourcing strategy at Bain & Company, Gottfredson tells the tale of a recent client, a CEO who was brought back from retirement to save the struggling West Coast hardware firm he started many years ago. A pillar of the community for having created thousands of local jobs, the CEO originally resisted outsourcing. But as his stock price and market share plummeted, he became desperate, and agreed to take a meeting with Gottfredson.
Gottfredson's team paraded out a variety of charts and graphs that all boiled down two simple options: a) become competitive again by sending jobs someplace they could be done better and cheaper, or b) face a slow death. The CEO ordered a complete efficiency audit, at the end of which Gottfredson recommended outsourcing all call centers, manufacturing, HR, IT, and back-office operations.
Exasperated, the CEO relented and has since trimmed $130 million from his expenses. What's left of the company? Whatever it is, it's leaner and more competitive, and, most important, it's still alive. Gottfredson is utterly unapologetic. "The beauty of our system is that we've always had the ingenuity to come up with new things to do," he says. "This country has an endless supply of initiative and drive." Easy for him to say. |
