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password question: why did this work?
I had the employee of a client come up with a very strange scenario with a site
that isn't hosted on my server today. She couldn't get into her email account
using the standard Outlook settings...
Am
I safe?
I have just been attacked by a hacker who has succesfully planted the w32.gael
virus on my system. Here's how it happend. A few days ago, a friend came around
to play some network games...
It
raised my knowledge level.
Got talked into a short-term project recently that required a skill set I as yet
don't have. Recruiter was anxious to get the position filled. It was pretty humiliating.
(Basically, got kicked from the project.)...
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10.12.05
What
Happened To The "Giant Sucking Sound" Of Outsourcing
 By Ian Ippolito
The conventional wisdom is that outsourcing has been very bad for the U.S. Information
Technology workforce.
After all, now that a company can transfer the work of a $50/hour U.S. programmer
to an equally skilled programmer in India or Romania and pay only $5/hour for
the same job, what are U.S. workers to do? Ross Perot once famously described
the result of job loss as the "Giant Sucking Sound"…from the movement of the jobs
overseas. Virtually every newsgroup, blog and magazine editorial quotes anecdotal
evidence of someone who has lost a job in the recent down turn as validation of
this theory. Almost all make dire predictions of the end of U.S. I.T. dominance
.
It's too bad that none of these people took the time to notice that the U.S. Bureau
of Labor and Statistics survey in July showed the number of jobs in U.S. IT has
rebounded to the highs of 2001. (see "Reliving the summer of 2001" in InformationWeek)
If they had, we would have heard a completely different type of "Giant Sucking
Sound"… a whole lot of people holding their breaths while forced to ask themsleves
"If outsourcing is the awful bogey man I believe it to be…then WHY ARE THE JOBS
STILL HERE?"
U.S. IT moves in cycles. 2001 was the height of the excesses of the dot com bubble
(remember when people wouldn't take a new job unless they got a 50% raise AND
could bring their pet in to work?). And what goes up unfortunately must always
come down. But when people lose jobs, the pain is real, and human nature is such
that we need to blame something or someone for the injustice. And who is a more
convenient and defenseless scapegoat than foreigners who can't speak for themselves
or defend themselves?
You'd think we'd know better about foreigner scape-goating. Remember when the
Japanese were buying up marquis U.S. properties in the 1990s like Rockefeller
Center? Everyone predicted they were going to own the country. That never happened.
Their real-estate bubble busted, they had to leave town and haven't been sighted
since. And you'd think we'd know better from history about making simple assumption.
In the 1700's, the English gave themselves premature coronaries, because they
obsessed over the fact that they couldn't grow enough trees to power the wood
power plants. The invention of the coal based steam engine propelled England into
the industrial age, and reduced the dreaded "wood shortage" to a historical footnote.
Outsourcing HAS had an effect on U.S. I.T. but it has NOT been what the convention
wisdom predicted. And understanding it is the key to having a real understanding
of outsourcing.
The survey data shows that there are about 16% less programming jobs than in 2001.
Everyone knew that heads-down coders would be affected by outsourcing (although
that isn't exactly true either...something we'll examine further in another blog).
On the other side of the ledger, I.T. management jobs have skyrocketed about 20%
(70,000). Almost no one realized that those jobs would explode and practically
offset the loss in programmers. And a person managing work tends to be paid higher
than the people actually doing the work.
Where did these management jobs come from? I call it "Affordability Magnification".
Say you're a typical IT manager in a small to midsize company with a budget of
$1,000,000 for programming. Before outsourcing you ran 4-5 projects a year. Now
those projects are just 1/10th the cost. If you still run 4-5 projects, you are
going to have a ton of money unspent at the end of the year. The CFO would be
more than happy to take it from you and give it to some other department next
year…so you can't do that. Instead, you'll of course spend every last dime. And
you'll run 40 projects and hire a bunch of new project managers to manage them.
And that is what we are seeing.
To those who think this is a surprising idea…I recommend a trip to library (or
Wikiopedia) and a quick read of economics 101. Outsourcing is based on free-trade,
and free trade predicts that when 2 countries trade…BOTH benefit, not just one.
This is counter intuitive for all the reasons mentioned earlier. But free-trade
predicts that people in each country will realign from jobs that the country can
do less efficiently, to jobs the country can do more efficiently. And that makes
both countries stronger. And that is what we're seeing.
Yes, this does mean pain and problems for those affected…some of whom have invested
years of training. And as a society we should be helping those people with benefits
and retraining. But we also need perspective as well. Just like the economic cycle
we talked about earlier…this is a cycle and not a novel thing at all. Disruptive
technology is constantly displacing old industries as it creates newer and better
ones. How many 8-track cassette engineers do you know of? Are any groups pushing
for a ban on CDs to protect this specialized profession? And this cycle isn't
even unique to our century. For centuries, scribes (people who could write) were
prestigious and highly paid for their advanced skills. But when the printing press
was invented and took off in the 15th century, the scribe felt the pain of sudden
unemployment. The cost of books dropped by a factor of 300, scribes made the shift
to other professions, and society as a whole is more literate and better off than
it was before. Today, there is no "scribe in America" program that advocates the
banning of printing presses to protect the health of U.S. scribes.
So anyone that says that outsourcing has caused some unemployment is correct…and
some heads-down coding jobs have left the U.S. for good. But anyone who says that
outsourcing hasn't also created new jobs, and is somehow unpatriotic because of
it...is simply uninformed.
About
the Author:
Ian Ippolito is the the creator of http://www.RentACoder.com,
an open marketplace for computer programming where 2/3rd of the parties choose
to outsource internationally. It has been studied by universities such as American
University to learn more about outsourcing. |
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