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Outsourcing Evolving 270

Posted by Zonk
from the onward-and-outward dept.
Shree writes "An article at NYTimes suggests that the outsourcing mantra is shifting to reasons of hiring global talent, tapping new potential minds and amassing top global human resources. Its not just software companies trying to save a buck by outsourcing; now its about Berkely trying to hookup with Tsinghua University and institutes in India, and companies like IBM and Microsoft looking to setup R&D labs in Asia."
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Outsourcing Evolving

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  • by massivefoot (922746) on Saturday February 18, 2006 @06:43AM (#14748563)
    If nothing else, this should serve as a short, sharp shock to Western governments. Why are we having to outsource these kinds of technical jobs? Most people don't quite seem to appreciate the crisis that the UK is going through in maths, science and engineering. I'm guessing the situation is similar abroad?
    • Why are we having to outsource these kinds of technical jobs?

      Because our workers and governments demand too much. When companies have to pay high salaries, top benefits, and meet tons of regulations and pay huge taxes on top of everything then what do you expect? It amazes me when I see legislation that attempts to force large companies to dedicate a portion of their payroll expenses to health care costs for workers. Don't our lawmakers understand that this communist style approach to government will o

      • by luvirini (753157) on Saturday February 18, 2006 @07:14AM (#14748628)
        Yet in most cases I have found the people who the job is outsourced to, to be quite "one track". In most cases for a actual development or similar job you need a broad understanding of things.

        Most people coming out of university programs in countries like India are actually trained in a very narrow part of the subject. This is fine for a actual "techie" that does a very narrow job, but anyone doind R&D or such needs more. (note that many people from "western universities suffer from the same, but there atleast you can find the other type fairly easy)

      • You know maybe, just maybe, there's things that are more important than the almight dollar? I don't know, like human life. Having companies pay their employee's health benefits is far from ideal, it would be better to have the government recognize health care as the fundamental human right that it is and take care of it, rather than burden employers over a certain size. But until we can get that, forcing employers is the best option we have.
        • by jcr (53032) <jcr@NOsPAM.mac.com> on Saturday February 18, 2006 @07:56AM (#14748712) Journal
          health care as the fundamental human right that it is

          Health care is not a "fundamental human right". It is a service like any other service, your emotional proclaimations notwithstanding. You are no more entitled to health care at other people's expense, than you are entitled to force other people to feed, clothe, or shelter you.

          -jcr
          • Most civilised countries do provide healthcare of some form, and most of us would recognise that when one person has health and wellbeing, while another is sick, purely because of monetary issues, that's poverty. Being entitled to healthcare by others is NOT the same as being entitled to FORCE others to provide it. Those are very different concepts. The first is simply living in a society where people help you when you're in need, much like you help them. There's no need for force, because, having helpe
            • Being entitled to healthcare by others is NOT the same as being entitled to FORCE others to provide it.

              What does "entitled" mean to you?

              If I were to accept the premise that one is entitled to the product of someone else's labor (whether it be for healthcare, or food, shelter, etc), then that entitlement requires someone to provide it. This is the difference between considering healthcare a "right", and healthcare being a service that people obtain through voluntary interaction.

              -jcr
              • What does "entitled" mean to you?

                Businesses are "entitled" to fire people whenever they feel like it.

                How's that?

                and healthcare being a service that people obtain through voluntary interaction.

                And a pile of money. Don't forget the huge pile of money.

          • You are no more entitled to health care at other people's expense, than you are entitled to force other people to feed, clothe, or shelter you.

            Yes, and you are entitled to having other people feed, clothe, and shelter you when you are unable to do so yourself. That kind of social behavior and group support is what sets humans apart from lizards. It's what has made humans the dominant species on the planet despite us being physically weak and unimpressive.
          • IT damn well is. LIFE is a fundamental human right. Everything that is necessary to live (food, shelter, clothing, health care) is a fundamental human right by extension of that. If you actually think keeping another hundred bucks in your pocket is more important that wether someone lives or dies... well, fuck you. If you have that little concern for your fellow human being, your opinion is worth jack shit.
          • America is the only nation in the civilized world that believes "health care is not a fundamental right", right? Nobody else, no matter how bad their health care waiting lines are, wants to adopt America's way. The operative word here is "pariah". Look it up some time.
        • Forcing governments? Forcing employers? What a terrible idea if you actually want good health care. In Canada, where I live, health care is terrible because of exactly this reason: overtaxation of people wouldn't let them to provide themselves with sufficient coverage on one hand. On the other hand private health insurance is against the law (only in Canada, Cuba and North Korea, what a nice company to be in.) And the worst part is that all that money provided in taxes is not really creating the heal
      • by Fred_A (10934) <fred@f r e d s h o m e.org> on Saturday February 18, 2006 @08:05AM (#14748735) Homepage
        Because of course mere survival is the purpose of one's existence. The fact that a century ago people have fought and sometimes died for the right of working for more than a mere pitance, for the right of not seing their chilren mangled by machines in factories, for the right to be able to afford a doctor, for the right to be able to rest every now and then may mean nothing to you. They must be spinning in their graves.

        In that case, you can feel free to go work in a US meat factory. It sounds like your dream environment. Workers are daily wounded or killed, they have no benefits whatsoever, they have the most basic of pays, the very idea of unions is ludicrous. It's the least protected work environment in the US with the least benefits. Maximizing shareholders value at its best.

        Nowadays if office or factory equipment is reasonably safe to use, doesn't irradiate you or chop your hand off at a whim, it's because of those damn workers that demanded too much. Don't you think safety goes against the bottom line ? In the short term it certainly does. And what matters nowadays except the short term ? People in Wall Street can't count beyond a couple months anyway.

        Sure, let's have a level playing field, leveled at the bottom. The chinese have factories with truncheons to motivate workers, fine, truncheons for everybody, we wouldn't want those poor western businesses to suffer now would we ?

        It's not as if anyone was paying the price except for the actual population of your country. Except of course for the happy few very top execs who will keep on enjoying their insane lifestyle.

        It's nice that suicidal sheep like you (still spitting "communist" like a good brainwashed 1950s TV watcher) are still alive and well. The abusive corporations still have sweet days ahead of them...

        In the mean time I'll stick to Europe where we're still trying to do something around it.
      • by nicklott (533496) on Saturday February 18, 2006 @08:33AM (#14748800)
        Why does paying helthcare cost for their employees drive business away? The employees still have to pay their healthcare costs, so they either get a higher salary and pay it themselves or a lower one and let the business pay it. For an example of this in action just compare average european salaries with average US ones (Hint: American salaries are much higher). Only the most short sighted businesses cannot see this. Luckily the lawmakers aren't as short sighted as you, who clearly have never been in the position of of not being able to afford your health insurance because your tight-fisted employer only pays you minimum wage and makes you work a 60 hour week. Presumably "workers" in this sentence to you means "trailer park scum who milk the system for all its worth" or some other social group to which you do not belong? Can you not understand that your parents/neighbours/you are all "workers"? You're privileged to even be able to think about this stuff. Take your $100k pa, buy your ipod/mopar/hdtv, accept that you're going to have to pay some tax and shut the fuck up.

        Anyway, drive business away from where? America? Everything you're wearing right now and 95% of the computer you're looking at was made in china or SE asia by american owned megacorps. The business that can go away has already gone. The car dealer down the street isn't going anywere, the local kwikemart isn't going anywhere (unless walmart undercuts them out of business), people will still need to buy things and as long as that is the case businesses will survive and prosper.

        Why should business assume that it has a god given right to only take from society and not be expected to return something? You pay taxes to keep your neighbourhood clean and get your trash taken away, is it not reasonable to expect that a business should pay taxes to help maintain the neighbourhood that allows it to make a living? That $9bn profit that Mega Corp made last year was squeezed out of the pockets of the people in society. They only exist under the sufferance of that society; why should they not be expected to put some of that enormous amount of money back into the society?

        A business is part of society, not an isolated entity who's only action is to take money in return for goods or services. Not only is every employee of that company a part of that society with rights and responsibilities towards it, but the company itself is legally an individual with the same rights and responsibilities. It's unfortunate that many businesses don't see this and largely try to avoid their responsibilities while at the same time going to extremes to enforce and extend their rights.

        As a business owner myself I'm glad to see that I'm not the only who sees all of this. Under programs such as http://www.onepercentfortheplanet.org/ [onepercent...planet.org] companies are voluntarily paying extra tax for the benefit of others. OK some are doing it for PR reasons, but most are doing it cos they genuinely feel that their government is not doing enough or they just want to contribute more. Hopefully as the old style business dinosaurs die out, the new breed will appear and take a more rounded view of the world.

        • The employees still have to pay their healthcare costs, so they either get a higher salary and pay it themselves or a lower one and let the business pay it.

          Or they get a lower salary and pay it themselves. Or they just do without. Mostly they just do without.
      • Boy this kind of thinking always gets to me. It just strikes me as knee jerk reactionism. What's wrong with expecting large corporations to pay fair salaries? You aren't opposed to governments illegalizing indentured servitude or restricting the use of child workers are you? Illegalizing slavery is also a form of restricting the free market you know.

        Read a little bit of recent history. Particularly enlightening would be to read something about the industrial revolution, as a lot of the regulations we

      • Don't our lawmakers understand that this communist style approach to government will only drive businesses away?

        You're making the fundamentally wrong assumption that outsourcing at the level discussed in the article is driven by cost. IBM and Microsoft are going to India not because it's too expensive for them to hire Indians and move them to the US, but because it's becoming too difficult (in a way that no amount of money can fix).

        Dismantling the US safety net even further is only going to accelerate outs
        • Dismantling the US safety net even further is only going to accelerate outsourcing: the more brutal and socially irresponsible the US appears, the less attractive it is to many immigrants.

          Historically, immigrants have come to the US for two reasons: repression (usually religious) or opportunity. In neither case are these people very interested in a safety net. Also, it has been US policy to push away people who are coming to this country who are coming just for social services. I've experience this per

    • Why are we having to outsource these kinds of technical jobs?

      Because the education system at top universities in the UK is often completely worthless. It was recently said by a minister that the drop in numbers of students doing art degrees was "no bad thing" ... which I'd agree with, but what are they supposed to do instead? Computer science degrees? How funny. It seems the more respected the university the more irrelevant the CS course becomes.

      Why only the other day we were being taught parallel algo

    • Why are we having to outsource these kinds of technical jobs?

      Because other nations are beginning to figure out that the talent that the US used to syphon off is valuable and they are doing everything they can to keep it/attract it. In the past, the US got a very valuable resource very cheaply, and that's inevitably changing.

      Most people don't quite seem to appreciate the crisis that the UK is going through in maths, science and engineering

      Average high school education may suck, but at the top end, the UK is
    • Why are we having to outsource these kinds of technical jobs?

      Nobody's forcing businesses to outsource, it's just more economical. Our educational systems aren't in shambles; education abroad is improving.

    • Why are we having to outsource these kinds of technical jobs?

      Because the uppity workers here want electricity and food.
    • Most people don't quite seem to appreciate the crisis that the UK is going through in maths, science and engineering. I'm guessing the situation is similar abroad?

      Find ten Americans who can SPELL "maths, science and engineering". Go on, I dare ya!

  • by elynnia (815633) on Saturday February 18, 2006 @06:44AM (#14748566)
    ...it's all about the money.
    • by antifoidulus (807088) on Saturday February 18, 2006 @07:09AM (#14748616) Homepage Journal
      I especially liked the quote:
      The American executives who are planning to send work abroad express concern about what they regard as an incipient erosion of scientific prowess in this country, pointing to the lagging math and science proficiency of American high school students and the reluctance of some college graduates to pursue careers in science and engineering.
      Imagine that, EXECUTIVES who are overpaid and underworked are criticizing the scientists who they force to work long hours for pay that while not exactly meager, comes nowhere near theirs. And of course, when things go wrong, it's always the workers' fault, NEVER EVER the saintly executives who were only looking out for our well being, and well, can you blame them if they want a couple of million for leading a company into failure, after all a guy's gotta eat....
      Too bad GM didn't take a line from Nissan and sack the top managers and replace them with someone from the outside. Would have taught a lesson to all the other CEOs who think they can just sack a company for all it's worth and jump ship with a golden parachute while pointing their fingers at the drowning workers and saying, "it's your fault!"
      Or maybe I'm just cynical :P
      • There are plenty of qualified people to fill the jobs that these executives want to export. I have met many qualified applicants for many jobs that were simply overlooked because a different word was used on a resume, or there weren't enough letters in a specific title or some other stupid bullshit reason. I also know that there are many other places where one can aquire a quality education without having to spend time in a classroom. I know a lot of stuff, and most of this stuff was learned from nights
      • Imagine that, EXECUTIVES who are overpaid and underworked are criticizing the scientists who they force to work long hours for pay that while not exactly meager, comes nowhere near theirs.

        No, you totally misread the quote. They did not criticize scientists. Rather they said that there are two few: "the reluctance of some college graduates to pursue careers in science and engineering". Also: it is easy to make the case that executives are overpaid, but in my experience they are seldom underworked. Most e

      • by ph1ll (587130)
        Hear, hear.

        The one thing I've never heard an argument against is this line of thought (stick with it - there are a few steps but it's worth it):

        1. If engineers are responsible for the success or failure of projects then clearly there should be a greater spread in their wages. The best should earn big bucks and sit on the project board, the worst get paid jack and are threatened with offshoring. However, the reality is that engineers are all roughly paid the same and when management offshore they tend to un
  • by ishmaelflood (643277) on Saturday February 18, 2006 @07:03AM (#14748607)
    In Australia we have always been short of technical talent. The company I work for has been trying to recruit 200 engineers for the last couple of years, fortunately the recent collapse of engineering in Europe and to a lesser extent the USA means we'll be filling those jobs pretty quickly.

    Personally I'm pretty annoyed that we can't recruit locally, but basically our graduate recruitment program cuts fairly deeply into the available pool of graduates (ie we recruit more thickies than I'd want to). The truth is, you have to be bright and motivated to do well in an engineering course, and when you leave, there are far more superficially attractive options than working for people like me.
  • by boomgopher (627124) on Saturday February 18, 2006 @07:06AM (#14748608) Journal
    Everyone tends to agree that Americans/Westerns have a hard time competing with outsourcing, due to the huge differences in labor costs between the first and third world. Fine.

    But what I'm beginning to see is that the real problem is the cost of housing in the West.

    Yes, everyone bitches about high gas prices, health costs, etc (which all seem tend to be trumpeted by politicians with alterior motives), but these won't bankrupt you. Housing can destroy you financially if you aren't careful.

    If housing was cheaper, I would be okay making a lot less than I do now. However, I'd personally be screwed if I made much less than $100K (rent is over $2000/month in my very plain, old neighborhood in California). I don't really spend much on anything else.

    I'm approaching middle-age, and this is the number-one factor that I face trying to safely raise a family. Frankly, health costs pale in comparison as to how much I have to pay even to rent a halfway safe home.

    I think the financial industry has pulled a fast one on us, and are milking average folks dry. The environmentalists don't help either, with their 'smart growth' policies (i.e. 'no growth').

    • by antifoidulus (807088) on Saturday February 18, 2006 @07:20AM (#14748647) Homepage Journal
      EXACTLY! Mod this man up as much as you can.
      Younger Americans are really caught between a rock and a hard place now. Renting is one of the worst financial moves you can make(the others being credit cards and interest only adjustable rate mortgages). Even if your home doesn't increase in value you are still better off owning than renting, because every month instead of paying a landlord, you are paying a bit to a bank and the rest to yourself. And by the time you totally pay off your home, you don't have to pay a monthly fee to anyone(well, perhaps the government :P), saving you tons of money you can put to use in investments etc.
      The problem for people who got to the game too late to get a house cheap is that it's almost impossible for us to own homes. First and foremost you have the cost: Home prices AND rents have been spiraling ever higher, but wages have not. So while we are making money, what little we can save after paying outrageous rents hardly makes a dent in the downpayment we would have to pony up just to get a mortgage at a reasonable rate.
      The second of course is job security. Owning a house doesn't make any sense if you aren't going to be in the area more than 5 years, but how many of us here can say they have a job secured in their area for that long? If you sell it before is up, all the interest and fees would have made it hardly worthwhile....
      I see the US becoming more and more like places such as Italy and Japan where kids live with their parents till they are married, and maybe even a bit after that. When I was working in Japan, my co-worker was a 30-something graduate of the University of Tokyo making good money, but he still lived with his parents? Why? Because he could actually afford a decent lifestyle that way(such as owning a car!) As much as people like to make fun of nerds living in their parent's basement, if I wasn't in Germany right now and could find a job close to my mom's house, I would live in her basement for a while. It's getting harder and harder not to....
      • I have heard the conventional wisdom, that you should buy in stead of renting often, but i am not sure this applies always.

        As it has been stated, the housing market is expensive and i dont think it can hold this value much more. So if i buy a house now, i am going to pay maybe 2 times the amount i would pay if I buy when the market collaps.

        Say the market collapses in five years. With at 30 year houseloan, i would have payed 1/6 of it. If i wait and buy at the correct moment, i would saved 1/3 of the price o
      • by jcr (53032) <jcr@NOsPAM.mac.com> on Saturday February 18, 2006 @08:00AM (#14748727) Journal
        Even if your home doesn't increase in value you are still better off owning than renting,

        This is not always the case.

        Housing prices don't only rise, they sometimes fall, and when you buy a house you are making a very highly-leveraged investment. If you buy a $400K house for $10K down and $2500/month, and the price falls to $380K, your equity is now negative $10K. Lose a job while you're in the hole, and you're screwed.

        -jcr
        • I'd take that chance any day over paying out rent and not having my money work for me. A house is an investment. Investements sometimes work, sometimes fail. Paying rent each month, when you could have a chance to purchase a home, is just stupid.

          Me? I had a chance in 1999 to puchase a 5 bedroom 4,200 sqft. home in Southern California, to live in alone for a while until I find a wife and have children and can "grow" into it, for $380k. Most homes were about $200k back then (by comparison, most homes are
      • Not in this market. Mortgage payments are sometimes double rental payments in this environment. Wait a few years when you can get the house at half price, and then it might be a wise move. Renting also means no need to pay over 6% of the property value every time you move (greedy real estate agent cartel). 6% of 500k is $30,000 - enough money to cover over a year's rent even in a pricey district.

        because every month instead of paying a landlord, you are paying a bit to a bank and the rest to yourself

        Every mo
      • Even if your home doesn't increase in value you are still better off owning than renting,

        Unless of course, you end up in Golden Jail [typepad.com].

        Because your property tax is set by the value of your property when it was first purchased, having rising prices all around can lead to you become financially trapped. You can't move up or down the market, nor do you want to leave the market.
      • Renting is one of the worst financial moves you can make(the others being credit cards and interest only adjustable rate mortgages).

        Wrong on all counts.

        Renting is an excellent deal in the West right now because it's far less than you pay in interest on a mortgage. Of course, buying may still be the rational choice for your particular situation, but that doesn't make rentals bad.

        Whether interest-only adjustable rate mortgages are a good or a bad idea depends on how long you intend to stay in your home and w
        • Renting is an excellent deal in the West right now because it's far less than you pay in interest on a mortgage.

          Interest is tax-deductible. Renters have no equity. Renters own nothing.

          Whether interest-only adjustable rate mortgages are a good or a bad idea depends on how long you intend to stay in your home and whether you expect housing prices to rise.

          Homeowners should not be encouraged to speculate on housing prices with gimmicky scam loans that cheat them out of their own homes.

          As for credit cards, the
    • Hell yes! Four years after graduating, with continuous employment (finished my last exam on the Thursday, started work on the Tuesday), I find myself renting a 10'x10' room in a three bedroom ex-council property, because it's what I can afford. Rents around here have almost doubled in 4 years, it's terrible.

      What's really frustrating is being told by people who bought their house for a fraction of its current value, that the housing market should be this high. Or that I should buy somewhere, and then I can s
    • While I pretty much agree with you on housing costs, must point out that, ironically enough, Bombay has one of the costliest housing markets out there in PPP terms. Even in actual terms, costs in urban India seem to reach international levels pretty fast; an average cab ride in Mumbai, for instance, is much more expensive than what it is here in Singapore. The same for cinema tickets.
    • Wouldn't it be nice if there were some kind of tax benefit (deduction, credit) for renters?

      There's one for homeowners. Oh, wait. It's the rich people who get all the breaks. Never mind.
    • However, I'd personally be screwed if I made much less than $100K (rent is over $2000/month in my very plain, old neighborhood in California). I don't really spend much on anything else.

      If housing prices in California are too high, make the market and move to a place where prices are lower! Midwest cities have excellent high tech opportunities and less expensive housing. I own 3 beds and two baths on a quiet acre for hundreds less then what you are paying in rent. With my big SUV, life is grand!

  • There are real problems with the fact that the society in "west" is so geared to make businessleaders and artists and so on as "heroes".

    Thus the prestige that was attached to technical jobs is gone and most people do not see them as desirable jobs.

    Yet, to further the livingstandards and so on we need technical and engineering people.. in huge numbers and as smart as possible.

    Today, unfortunately most smart people choose some other carreers instead.

  • 24 hour development (Score:2, Interesting)

    by DavidHOzAu (925585)
    A large company will outsource eventually if they want a 24-hour workday. India is a nice place for such companies because they can be coding while you are sleeping. Result: Projects get finished in about half the time.

    Besides, there is also the financial benefits of cheap labour that outsourcing brings. Some might say that outsourcing isn't nice to those working at home base, but that's beside the point to a company when deadlines and audits are looming.
    • by AuMatar (183847)
      No they won't- more bodies does not cut the time in half. Read the Mythical Man Month.

      Besides, if they just wanted 24 hour development, hire a night shift. You know, like US based hospitals, police, and factories do. I'd be willing to work nights for extra pay.
    • Myth? (Score:2, Insightful)

      by edderly (549951)
      Depends what industry you're in. Manufacturing - well of course. Where you need to communicate over the time zone e.g. s/w development - in my experience it's a myth, and highly dependent on the quality of the people communicating. I haven't seen any good documented evidence of any efficiency improvements. In fact I've heard that it actually can decrease the net efficiency of your local team 40%.

      It's even worse for US -> India than it is for UK->India, at least our timezones cross over a bit. I've see
    • by sbrown123 (229895) on Saturday February 18, 2006 @11:59AM (#14749549) Homepage
      India is a nice place for such companies because they can be coding while you are sleeping.

      Wow! What a huge advantage! I mean, since ALL Americans HAVE to go to sleep between 6 PM to 6 AM this rules! Seriously, theres this thing called "shifts" that can do the same thing. And if you ever had to deal with India in software outsourcing you would know the horrors of working 12 hour days so you can reach one of the sleeping bastards by phone for a phone conference.

      Result: Projects get finished in about half the time.

      Not true. Anyone who has done software projects knows that they are usually given unrealistic schedules and changing requirements (scope creep). I once, to great humor, watched a local project with serious issues go overseas. The outsourcing company supposedly threw swarms of software engineers at it and were still unable to complete the project. No matter how many people you have its impossible to reach a goal if the goal is undefined.

      Besides, there is also the financial benefits of cheap labour that outsourcing brings.

      Trye. Cheap labor means company makes more profit and the stock goes up. Executives, who usually recieve stock in the company as "rewards", make more money. This means executive can buy fancier boats, cars, and houses. A win-win situation for them.

      Some might say that outsourcing isn't nice to those working at home base

      Everyone around is effected by outsourcing, not just software engineers. You see home based software engineers pay taxes, eat at restuarants, buy items from stores or the internet, etc. etc. That money goes in to the community which in turn pays for other peoples living and general area welfare (like fixing roads with tax money). Now to be honest, software engineers are not that numerious to make a serious dent. But India, and China for that matter, are moving to outsourcing other types of jobs. Indians generally target the higher paying jobs. Go to a hospital in a larger city and figure out how many doctors on call don't hail from the U.S. Theres not a shortage of doctors, its just that hospitals are businesses too and cheap labor makes the executives happy. The complaint that there is this "shortage of talented labor" by companies can be correctly translated as "shortage of cheap labor with sufficient degrees".
  • Buh-bye (Score:3, Insightful)

    by sanman2 (928866) on Saturday February 18, 2006 @07:12AM (#14748623)
    Look, big business interests are tired of waiting for politicians and public to slog through the debate morass about education reform, privatization, vouchers, "no child left behind", blahblahblah.

    While Western politicians and activists babble about all that, big business is just going to cut to the chase and hire from whichever countries have actually managed to come up with educational systems that churn out needed skills, rather than waiting for this reform business to work itself out.

    So dear politicians and activists, please by all means continue to wrangle in endless debate over the issues, because meanwhile your societies are the ones who may be left behind wholesale, while the fluid business interests bypass you altogether.
    • While Western politicians and activists babble about all that, big business is just going to cut to the chase and hire from whichever countries have actually managed to come up with educational systems that churn out needed skills, rather than waiting for this reform business to work itself out.

      Wrong. Big business does whatever gives big business the biggest buck fast (within the next quarter). Meanwhile the capital is eating itself. More and more people are not running for the money but the self-inflating
  • by cyber-vandal (148830) on Saturday February 18, 2006 @07:30AM (#14748664) Homepage
    The outsourcing of economists' jobs. Suddenly we'll be hearing how it's a terrible thing and should be stopped.
  • by zappepcs (820751) on Saturday February 18, 2006 @07:48AM (#14748695) Journal
    The big picture is the real center here... Its not just about costs of labor, housing, or whatever. Since the advent of the information age and the Internet, the world has increasingly become a flat world, a smaller world, evolving toward a single community. This evolution toward flatness is stretching and pulling on national and international boundaries, laws, and business practices. Its cheaper to live in Texas then in California, and business incentives on top of that have made Texas the silicon valley of telecommunications companies. Cost of living is less than half of many places in Cal. or the New York area, so the jobs should be good... but still there is outsourcing. Government still has not given businesses the right incentives to hire from within the country, so they will save money wherever they can. If that means hiring people in a country around the world where health plan costs and retirement costs are cheaper, they will because the flat world means it is possible to do so. 30 years ago, it just would not have worked. Communication was not good enough, now it is.

    The real problem is not quality or quantity of graduates in the science fields, it is the fact that governments have not caught up to the information age with their legal and business practices standards. Giving companies tax breaks for this or that but not taking into account hiring practices is one of the things that has upset the balance of wages and outsourcing. All this political rhetoric about colleges is just political posturing. The real changes need to be made at the business tax and law level of things. The government can give incentives to companies that don't outsource... but then that would be taking easy money out of their pockets... it is all about money, but not for business, its about money for government and political figures.

    When businesses are given the right incentive by governments through taxation and regulation, they will pay for in-country talent, and those jobs will again carry prestige, thus garnering the admiration and adulation of students planning for their futures.

    It was fine to enforce equal hiring practices by race, but for some reason its not okay to make companies biased toward hiring citizens of the country they are registered in and pay taxes in. The big picture is that politics is screwing the west for the short term gain.

    The dotcom bubble and bust showed that there are times when a guy coding in his mom's basement is as good as a 120k/year engineer... businesses are still learning that the dotcom boom is over, and getting quality work and workers again costs money. It doesn't matter how many people you hire in India, there are costs associated with communicating with those workers, and instilling pride in those workers to do the kind of job that gives the company the reputation that they want.

    Right now, there are tons of call centers in India (we all know and hate them) and in the interests of business, even Indian companies are outsourcing to China (of all places) to cut costs because that is the only incentive that business has... cut costs, make profit... Its time for government to step in and realign incentives for companies. Yes, labor is often cheaper, and regulations or lack thereof makes doing business overseas cheaper.. but for the same reason that, say, poisoning the environment is wrong in California, its also wrong in Yogoslovia and India, and governments should not support businesses that are involved in such practices with tax incentives etc. That would counter the effect of a flatened business world.

    Well, that is the gist of it anyway.... "its the government's fault" more or less...

    Okay, go ahead and show me where I'm wrong now

  • by HampiRocks (769257) on Saturday February 18, 2006 @08:17AM (#14748760)
    Slashdot at its weekend best.

    Let the slashdot readers go back to blasting the Indians and the asians. How pathetic and incompetent they are, if it was not about the prize they would not get anything to do, we are so great they are so bad, blah blah blah .....
    • Actually, looking around today, I'm not seeing too much along the lines of "its the Indian's fault" or "I'm entitled to a job with a 75,000+ salary which involves me just sitting at a desk".

      Of course those posters are probably just sleeping in...

      • "I'm entitled to a job with a 75,000+ salary which involves me just sitting at a desk"

        The bank is entitled to $2800 monthly mortgage payments (for 30 years) for doing... nothing.

        The landlord is entitled to $2100 monthly rent payments (perpetually) for doing... nothing.

        At least the employee is actually at a desk.

        Well, they were. Now they're fired. The bank is still getting paid.
        • by nwbvt (768631)
          Sure, it seems to you, someone who knows crap about real estate or banking, that bank employees and landlords don't do anything. Just like it seems to someone who knows crap about engineering that the engineers don't do anything.
    • I don't see people bashing indians or asians. I see people that are concerned with what might happen if their job was outsourced and they had to go back to the streets to look for another one.
  • by greg715 (955508) on Saturday February 18, 2006 @09:17AM (#14748913)

    The real reason for outsourcing is macro economic efficiency. In true free trade its the last denominator that companies can do nothing about internally as its an external factor.

    Like it or not its the reason why china should not float their currency and the reason why countries like Singapore have managed to survive in a very competitive technical sector. In countries Like the US,UK and Australia you may pay an engineer more but the engineers themselves don't benefit due to the high living cost. The high living cost is attributed to the high proportion of non-productive sectors in an economy compared to productive sectors. Productive sectors would include the likes of Engineering,manufacturing, mining,agriculture while non productive sectors are largely the finance sector and bureaucratic sectors. In essence productive sectors support the non productive sectors(eg you cant eat money if there are no farms).

    I will give you an example of what has happened in Australia recently. In the last 10 years the cost of house ownership(and thus rent) has gone up hugely. Incomes have gone up to match, but once the cost of paying for a house is taken into consideration, what is left over in the income has not gone up, often down. Take two people bidding for a house. In order to get the desired house each bidder goes to the bank to secure the loan. Thus due to bidding competition each will try to obtain the highest possible loan possible but from the same bank. Thus the bank increases the price of housing by giving larger loans and increases its profits due to interest on the loans. In the end the productive sectors of the economy must provide high pay jobs to support the high value loan to provide the bank with a profit.

    So why should a company pay for bank/financial sector profits when in a country with a lower cost of living they could pay the same amount and the engineer would benefit much more as they would actually retain the wealth. Otherwise if the company does pay the engineer less the engineer would still attain an equivalent living as one on a much higher income in a high living cost country.

    Take a country like Singapore for example. Here the government heavily controls housing. Singapore doesn't have much choice if you look at the population density however they have benefited greatly due to maintaining a low living cost. Essentially the government here controls 90% of the housing as government housing. In order to get his housing you get a government loan which is not designed to make the government profit. They call it subsided housing, but its not really subsided. The prices of houses cover the construction cost, they just don't provide profits to the financial sector through high interest loans that artificially inflate house prices through competitive bidding.

    The result is you can hire an engineer for a lot less in Singapore than you can in the US and the engineer still has an equivalent life.

    The second example is China. As a developing country china has a very low cost of living. In much of the country no one expects to gain a high level of profit from housing. As a result in these areas you can set up a manufacturing company and by default be competitive due to low living costs. Should the Chinese government float their currency, from the point of view of foreign-non Chinese currency, the cost of living will rise dramatically. Through this rise, locals would suffer from an increase in relative living cost due to the lost competitiveness. They only institutions set to gain are the financial ones as they will make massive profits of the rise in the Chinese currency. That profit has to come from somewhere and thats the productive sectors of the world economy. i.e. engineering.

    Thus when you see outsourcing, don't blame the engineering companies- they are in a loose loose scenario. If they don't, they loose due to foreign competition, if they do they will fail due to a faltering local economy.

    Blame the non productive financial

  • One of the things that is driving American Universities toward change is the rise of for-profit education in the US. These enterprises tend to clip high margin students away from traditional educational settings into an increasingly fast-paced and often online world. This is squeezing colleges, especially colleges without the power of a large endowment.

    This comes at a time when there has been unprecedented growth in the number of American colleges and universites. None of them want to go out of busine
  • by argoff (142580) on Saturday February 18, 2006 @11:52AM (#14749514)
    IMHO, the economic fundamentals do not favor China and India making a smooth transition into the world economy. I think that both China and India will become a large part of the world economy someday, just not as soon as most people think.

    First off, if you look at the infrsatructure of these countries, they are very small compaired to the size of infrastructure in the western world. Which I'm sure they will catch up, but infrastructure is expensive and the US has over 100 years up on them.

    Second off, if you look at the political freedom rankings of these countries, many of them are in really bad shape. This is very important, because countries with political freedoms have outlets for the stress cuased by growth and change. China especially, could be explosive.

    Third off, if you look at the economic freedom rankings of these countries. They are also in really bad shape. This is extremely important, because economic freedom allows peoples to exploit opportunities to create wealth and prosperity. I could really see a situation where all these cool technologies get developed all over the world, but they only get applied in productive ways in the free and western countries. In China, general tax rates are as high as 40%. (The US is pretty bad too, but already has a middle class(for now)) But there is no way that you can have high rates of sustained growth under those kind of taxes, because there is no way to build an economic middle class.

    Fourth off, IMHO the economic shithole that the US is in is temporary. Currently the US has more debt than it can ever pay off, and is about ready to fall off a hyperinflationary debt cliff. However, once the financial system collapses, and they push the reset button, the path will be cleared for sustained growth. Half the government freebies will be dead, realestate will collapse and become reasonably priced, the debt will be offloaded, the currency will likely end up backed by something other than the good faith of the federal government, and taxes will be low. That combined with the higher level of economic and political freedoms will position the US very nicely. Hopefully, the US will also open the immigration flood gates, bringing intellignet people over here who will even create more jobs and oppertunity - getting more bang for the buck.
    • Hopefully, the US will also open the immigration flood gates, bringing intellignet people over here who will even create more jobs and oppertunity - getting more bang for the buck.

      This was how the US leapfrogged over everyone after WW2. We had pretty much a huge section of the European intellects come here (Einstein, Godel big names and numerous others). As a rough guide if you look at the Nobel laureates from the US in the past 50 years, many of them were born in Europe. Lately you'll see ones born in C

      • This was how the US leapfrogged over everyone after WW2. We had pretty much a huge section of the European intellects come here (Einstein, Godel big names and numerous others). As a rough guide if you look at the Nobel laureates from the US in the past 50 years, many of them were born in Europe. Lately you'll see ones born in China, Egypt (Asia).

        The scientists came because they were fleeing Europe, not because we had open arms.

    • Fourth off, IMHO the economic shithole that the US is in is temporary. Currently the US has more debt than it can ever pay off, and is about ready to fall off a hyperinflationary debt cliff.

      Back up both of these arguments (the necessity of paying off the national debt and why we're on the brink of hyperinflation) with facts.

      Hopefully, the US will also open the immigration flood gates, bringing intellignet people over here who will even create more jobs and oppertunity - getting more bang for the buck.

      Th

      • by argoff (142580)

        Back up both of these arguments (the necessity of paying off the national debt and why we're on the brink of hyperinflation) with facts.

        http://mwhodges.home.att.net/debt.htm [att.net]

        But it's not just government debt, it is total debt and obligations in the US economy, and the fact that were going thru a technology and offshore service induced deflation - which means that there won't be the pay base to prop it up. When push comes to shove, there will only be two options, massive cascading defaults on debts or

  • by ErichTheRed (39327) on Saturday February 18, 2006 @01:15PM (#14749922)
    I work in the IT universe, so the first wave of outsourcing is nothing new to me. Often, it's simply to save money, and damn the quality. This is especially true for mundane, tedious stuff like maintenance of legacy code. However, I'm starting to realize more and more that the average "IT guy" in the US isn't the same an an overseas IT guy. The foriegn workers tend to be smarter and harder working than their US counterparts, and they usually have better academic credentials. I'm guessing it's because education is a higher priority everywhere else. I think parents would be well advised to push their kids to study more if they want to compete. Some of the outsourcing projects I've worked on have foriegn workers who are just space fillers, but the vast majority have workers who are absolute robots, cranking out 12-14 hour days all the time when an emergency happens.

    Outsourcing scientific research is just the next step. Science and technical students here are freaked out about living a life of perpetual unemployment. I graduated in the late 90s, and even then having a science or engineering degree was considered at least a step in the right direction. We laughed at all the psychology and businsess majors who treated school as a 4 or 5 year party and said they'd never get jobs. Now it seems like they have the upper hand in management, which I think is probably the nnly "safe" job. I can understand why students entering college today wouldn't want to study math, science or engineering, simply because they know they won't be able to make a living in the future. Either that, or their business student peers will be making 4 or 5 times their salary in a management job. Now companies can't find talent here, so they outsource to somewhere that has a higher work ethic and much lower salary. Double bonus for them, big loss for those of us who are scientific and not destined for the ranks of management.

    Unfortunately, I don't see anything short of a decree from the top that will stop this. Even then I have my doubts. Imagine if the president got on TV and told everyone that we're losing our competitive edge by becoming a nation of service workers and manageers. I don't know if anyone would listen.

    We need a big-time project like the Apollo missions in the 60s to get everyone believing we can actually compete again, and then maybe the trend will reverse itself.
  • Why do you think the US became such a science and engineering powerhouse? Because the farm boys that lived in this mostly rural nation were so smart? Because Harvard was such a great school for country gents? The US did have its pool of US-born talent, but what made the US so big and powerful was smart, education-oriented immigrants and their immediate descendants. In particular of the post-WWII technology boom was fueled by European refugees (as well as by the lack of competition from a world in shambl
  • <sarcasm>Well, why not, we already outsource tech support, programming, and other skills, why not outsource evolution as well? </sarcasm>

    The headline should probably have read, The Evolution of Outsourcing

  • I outsourced my work during college but still got a degree. Now I'm outsourcing my own job. I get an assignment, I send it to some really good engineer in Asia, I tell him to make a few mistakes, and I give it to my boss. No one notices. I give the engineer enough of my paycheck that it's a really good salary for his country, but I still get to keep much of mine. I get to do very little work and get paid, the engineer who does the work gets paid, my employer doesn't notice the difference.
  • Darwin would have a fit over this!!!
  • "Put your degree last"

    The slogan of every job recruiter in the business. Let's list all the education that business has made worthless, shall we?

    Art
    Art History
    Chemistry (without an advanced degree)
    English
    Literature
    Anthropology
    Biology (without an MD)
    Business (without an MBA)
    Linguistics
    Physics (without an advanced degree)
    Music
    Geology (without an advanced degree)
    Psychology
    Sociology
    History
    Ancient History
    Philosophy
    Drama
    Theater
    Dance

    Think about it. Guy shows up to apply for a job with a PhD in History. What is
  • The American executives who are planning to send work abroad express concern about what they regard as an incipient erosion of scientific prowess in this country, pointing to the lagging math and science proficiency of American high school students and the reluctance of some college graduates to pursue careers in science and engineering.

    I don't blame the students. Who wants to bust their ass to compete with $5/hr engineers in Cheapbuckistan? We need carrots, not sticks. If you have an academic knack, then

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