“Outsourcing” is still keeping ’em up at night in this Renderosity thread. Here is my latest reply – go check it out if you want or just read my post below. (outsourcing thread)

Re: Outsourcing by soulhuntre on 3/4/04 08:26

“That is simply NOT the case. The High-Tech jobs, such as advanced computer programming and ALL the rest, are rapidly being outsourced to companies in India and China wher the workers make waaaaaaaaaaaay less than a similar equally-highly-trained worker in the US.”

As someone actually in the industry you are discussing – the situation isn’t nearly as dire as it sounds. Lumping all programming together is as naive as lumping all “craftsman” together.

As we speak, at this moment, there has been a huge presence of Indian companies in the programming and web fields for more than 5 years now. They do work at extremely low rates, and they do deliver what they promise on time. Yet, the US designer, programmer and web developer with talent is still a viable, competitive force even though we charge more.

Why? Not because of any delay in the trend, we led the trend in this industry. There is almost no barrier to someone using an Indian firm and websites like guru.com make connecting with, reviewing and paying those companies a trivial task.

There is something that seems to be hard to define about US firms and workers in this area that makes us competitive. All the best design studios are US based, all the leading developers of the technologies that drive the web are US based (Microsoft, Macromedia, Adobe, Apple and a slew of others) and most of the innovative development comes from the US.

In short; at the moment we are still competitive despite higher rates because we do a better, more innovative job.

Is that always enough? Nope. Not all jobs clients have require innovation. Many of them are just grunt work jobs that are better suited to second world developers. Hell, I have helped clients outsource language translation projects as well as other work once the framework was in place.

The problem with this “race to the bottom” stuff is the assumption that only price matters and that skill, culture, infrastructure and societal influences have no value and make no difference. Yet all the experiences I have say the opposite.

Look even here on Renderosity, we have artists from all over the world… yet if you were going to commission someone to do a image for you would price be your only concern or would skill, artistic ability and talent play a part in your choice?

Yu can spend a lot of time complaining that in a global economy the US worker can’t compete  yet as a US worker I and others have been successfully competing and consistently charging higher rates than overseas companies that we bid against in a market that makes it absolutely trivial for a client to find, evaluate and use someone from anywhere in the world with confidence.

You can say it isn’t possible all you want but the reality is it is possible, and that people are and have been doing it. Competing on a global market may be new for you – but it simply isn’t new for some of us.

“100% of it goes into bigger profits which are skimmed off in the form of HUGE multimillion dollar packages for the greedy execs.”

Umm… no. Your probably off by a few zeros in your calculations. The money a large manufacturer saves by using an overseas supplier (Nike, for example) is probably much, much more than they pay and perks of their top executive staff combined. As publically traded companies the stockholders will only tolerate so much of that, and a CEO that doesn’t perform above his worth will be brought down (witness Disney).  If a top CEO is making millions or tens of millions a year it is because the stockholders have voted that he makes them enough money to be worth the price.

That’s the free market at work again 🙂

“Face it, cheap Indians can do anything we can do. Their government is making a massive investment in the outsourcing trend. Educating our population is not something many Americans are willing to do, at least on the scale of India.”

And as they do, and they get more work their pay rates go up, and they thus become more about competing on skillset, and less on price. As we are as good as they are or better this is not a problem. That’s kinda the beauty of this. While some fear we are all racing to the bottom, in reality this trend tends to bring many more people up than it does tear others down.

This kind of fear is common… at the moment it is “globalization” and in the old days it was “industrialization” What would happen to the people of the world they cried when a machine can do your job cheaper than you could and never tire? Predictions of massive loss of life, a permanent drop in living standards, anarchy, aliens attacking from Mars and all the rest of it were rampant as the evil machines took all the jobs away.

Yet that didn’t happen… the market shifted, it put people to better use or different use and the machinery brought about massive productivity increases. The fears and wailing came mostly from those who could not see or deal with a vision of change… they felt that their personal obsolescence in the coming marketplace meant no one else could possibly thrive.

“Now, preparation of American tax forms in foreign lands carries great risk in privacy…In America, he would be arrested; in Pakistan, we can do nothing.”

The market is already correcting this. I have seen a number of US firms put out bids for work in the medical field that are for US only companies because of their desire to maintain a legal fallback on situations like this. US companies are legally responsible for the privacy of this data – and they are now very wary of trusting a non US supplier specifically because of this lack of legal pressure. Eventually, the US consumer will demand of medical firms that they only us US suppliers and that their data never leave US regulatory control. This will become another area where a unique aspect of the US (in this case legal protection) makes US workers competitive even if they are not the cheapest.

I am still waiting of course for a more workable plan than trade barriers (since those are demonstrably a total failure in my opinion). Complaining that it’s unfair that someone can do your job as well as you can for less pay isn’t getting you anywhere, and it never will.