Of course most folks who are actually working in IT could have told you this. I know a number of folks at companies who experienced several rounds of layoffs. They have survived the layoffs, but they are also currently doing the job of two to three employees now versus prior to the layoffs. Morale is low, pay has not kept up with the cost of living increases, the cost of health care or inflation. Productivity is still there, but burnout is likely in these individuals. Other people I know that did lose their jobs ended up going back to school and getting out of IT entirely which I suspect is not an isolated situation and would lead to skewed unemployment statistics.
The thing that worries me is that this is not an isolated employment sector, and I predict that we are in more trouble than we might know. Historically we have relied on our research and development to keep this country on top technologically, but over the last five years or so, we have been reducing the amount of funding we spend on research and development, particularly in the biosciences. For example, if you were to look at NIH grant paylines, five years ago the payline was around 33%. Next year it is predicted to be anywhere from 10-14% meaning the likelihood that a researcher will obtain funding has been cut by more than half. In fact, research and education spending on the whole is down under the current White House administration. So, if we are supposed to rely on education, technology and research and development to keep our edge as a country, we are already in trouble, especially when one considers that even if we were to turn things around tomorrow, we have likely done enough damage that it will take a decade to recover.
Speaking of R&D......one of the comments made by Lucent CEO Patricia Russo about the pending merger with Alcatel said (and I'm paraphrasing because I don't have the quote in front of me):
"Alcatel does not do the kind of research that Lucent has historically done at Bell Labs. Future projects at Bell Labs will need to focus on productization in a 5-year timeframe. This transition has already started."
Science and research for the sake of science and research is now officially dead at Bell Labs. If they can't turn it into something that can be sold within 5 years, shitcan it.
This is an interesting commment, except that Alcatel, like any large telco would have been dead long ago if they hadn't done or sponsored a modicum of basic research, and they have, see this [alcatel.com] for example.
Meanwhile, at Bell Labs, things have been business-focused for a very long time. Remember that Thompson, Richie et al. couldn't get funding to make a new O/S, they had to pretend they were writing a text processor instead [ualberta.ca].
The first version of @acronym{UNIX} was developed on a PDP-7 which was sitting around Bell Labs. In 1971 the developers wanted to get a PDP-11 for further work on the operating system. In order to justify the cost for this system, they proposed that they would implement a document formatting system for the AT&T patents division. This first formatting program was a reimplementation of McIllroy's roff, written by J. F. Ossanna.
Meanwhile, at Bell Labs, things have been business-focused for a very long time.
I'm not sure you counterexample is a good one. Operating systems are more likea product than basic research, although at the time this was less so than today. You take away know-how from both, but you need to have a plan for what to do with a product. Up until then, OSs were tied very closely to hardware; UNIX turned out to be the most portable operating system ever.
You are missing a major point though. Bell Labs had enoug people of this caliber running around that a couple of rapscallions could, with a wink and their fingers crossed, create an operating system under th guise of porting roff. In part this was due to the overal wastefulness of Bell as a regulated monopoly. They told the regulators how much it took to run a telephone system, and the regulators marked that figure up. But it goes to show if you're going to waste money, at least you should waste it on something useful.
Another factor that is different now than then is government investment in research. Part of this was the cold war, which post sputnik threw a lot of money at applied research projects, possibly because nobody knew where the next marginal dollar.
Current attitudes towards government investment in applied research in Washington are rather negative. The idea is that it amounts to "government planning", and that applied research interferes with market efficiencies in allocating research capital to applied problems. Basic research -- OK for the government, but applied research is somebody else's job. Unfortunately, their counterparts in the US private sector is increasingly thinking the same thing, that their job is watching the quarterly profits and applied research is somebody else's job. That's what Lucent was saying; they shouldn't be in the applied research business anymore. The Federal government has cut research funding in energy R&D, agricultural R&D, and at NOAA, NIST and other Department of Commerce agencies.
It's not that the government doesn't do research anymore. Nor is it the case that the government and private sector don't do ANY applied research. But Lucent has a point. A private sector company can't be expected to invest in research that pays off in ten years; there are too many uncertainties in business to ask investors to shoulder that. Five years is reasonable. But if five years is a reasonable end point for private sector research efforts, and, say, twenty years is a reasonable starting point for public sector research efforts, then we have a massive gap in the 5-20 year range. That applied research gap is a massive national economic vulnerability.
They told the regulators how much it took to run a telephone system, and the regulators marked that figure up.
IIRC, they were regulated under a CAPM regime. Under the Capital Asset Pricing Model, regulators allow for a "fair" rate of return on invested capital. (The definition of "fair" might or might not include a reduction or negative premium to account for the near-zero risk, but that's not relevant to my point.) So, regulated monopolies such as AT&T had a very strong incentive to boost their fixed assets. Any "investment" (i.e., spending) they could capitalize would go into their rate base, which would allow them to earn more profit. (They also had an equally strong incentive to use the slowest depreciation accounting methods, thereby extending the allowed earnings on those "investments".) It doesn't completely explain their investments in R&D, but it does help explain the very posh nature of the physical plant at the old Bell Labs, for example.
But it goes to show if you're going to waste money, at least you should waste it on something useful.
Not really. The lesson was, "if you're going to waste money, at least convince the regulators that it was 'investment' and not 'spending'".
It doesn't completely explain their investments in R&D, but it does help explain the very posh nature of the physical plant at the old Bell Labs, for example.
Cough, cough, Bell Labs Holmdale. Other than a few show pieces, I am not sure that Bell Labs or the Bell System had physical plant that was any more posh than any other industrial company at the time. The Bell System physical plant at Long Lines and the local operating companies was solidly overbuilt and equipment was constantly maintained. The biggest thing that changed after the Bell System breakup was that instead of engineering and building telco plant that would operate continously without service interruption for 20 or 30 years, physical plant was designed to last a much shorter time, perhaps 5 years.
I believe that Western Electric was one of the reasons that Bell Labs was well funded. In 1981, the operating companies paid Western Electric about $500 for all of the parts that made up a Touch Tone, Trimline phone. The Trim Line base cost over $200, the Touch Tone handset cost over $200, the coiled cord cost about $10, and the line cord cost another $10. The operating companies bought almost everything from Western Electric, and everything was gold plated; including pens (Waterbury, of course), paper, electron tubes (some of which are coveted today), vacuum cleaners, wire, telco equipment (including installation), dust cloths, tools, computers (which were not called computers, usually they were called processors or controllers) -- everything. Western Electric's prices were not regulated, the operating companies' rates were based upon what it cost to provide the service - which included what it paid Western Electric.
A private sector company can't be expected to invest in research that pays off in ten years; there are too many uncertainties in business to ask investors to shoulder that.
Selecting Jan 2001 as a comparison point is plain stupid. This is still during the whole dot.com bubble which was an insane anomoly and using this is as dumb as using hurricane Katrina as a reference point for wind speeds.
For anyone that has forgotten, you could get an IT job during dot.com if you could just spell cumputer^Wcomputer. For a more realistic point of reference, choose a point before dot.com, say Jan 1999. Do that and you;ll probably notice some growth.
I was thinking the same thing. My office closed after 9-11 because our clients hugged their money in fear of what was going to happen. The market was so quiet, resumes were everywhere. CNN said the time to find a job increased by 40% [cnn.com]. I definitely saw that first-hand, although I'm only one data point.
Oh, maybe the utterly and ALWAYS (in all caps, no less). So you can't think of a single case where an honest, non-powerful person benefited from the free market?
I'll qualify that- not since 1876. Because there have been no powerful PEOPLE since 1876- the year that corporations became first rate citizens and the rest of us became slaves. The system seduces us, makes it look like we're doing well- as long as the continuation of the system benefits from our use. But the guy living in the $12 million mansi
If you actually read it (I know, it was longer then a digg blurb, so you probably didn't) you'd have seen that he used many dates, but the fact that many of his comparisons STARTED with 2001 (which you yourself said was a shitty time for IT workers) and compare them with TODAY (or close as he could get with the data) while showing NO growth or negative growth is scary. In other words, since the shittiest time after the.com blowout, there's been hardly any tangable IT growth.
He blames it on offshoring in general, and I agree with him. Off-shoring IT is a direct IT-job losing situation, but all off-shoring has a serious impact on our economy in general. It's the huge companies getting bigger, and being as greedy as possible while doing it.
So, imagine if he compared things to the year 2000 or 1999? It would look *completely* bleak.
Actually, go back to, say, 1996, a year ago... that previous slashdot article on What's Really Propping Up The Economy [businessweek.com] (anwer: health care services) pointed out
Perhaps most surprising, information technology, the great electronic promise of the 1990s, has turned into one of the biggest job-growth disappointments of all time. Despite the splashy success of companies such as Google (GOOG ) and Yahoo! (YHOO ), businesses at the core of the information economy -- software, semiconductors, telecom, and the whole
This is truly quite frightening. There are technologies which later proved to be crucial, which perhaps were not useful for much years, or decades after they were originally developed. One example is electromagnetism. It took decades for that technology to be fully developed, for radio, electric generation, motors, and so on to become used. Often, it can be the technology which has the least apparent immediate profit making value which has the greatest benefits for humanity. It appears that with this increa
Yea, I am experiencing this too... This guy from Singapore installed a router here and he was in India at the time. It was really amazing how foreigners can defy physics now. Geez the internet is changing everything.
Not that I a VB.NET guy but do you really consider those 'not IT jobs'? what about J2EE? Are the only real IT jobs laying down the network so that a server farm in India can function for a Bank in the US? Lets be real here for every Network Architect / Engineer there are a dozen or so J2EE / VB.NET guys and that is the health of the industry
I've done enterprise-grade checkpoint firewall installs by configuring the equipment ahead of time and mailing it out there. If you document well and are careful about what you do, its entirely doable.
If I can mail a firewall across the states, someone in India could mail one from there. Likewise with a router.
Is it nicer to have someone on-site? You betcha. But its cheaper to have an on-site guy who is just competant enough to plug in the port marked "WAN" and outsource the harder configuration to
Disclaimer: I am an IT manager who sets up and runs IT groups in India. So I'm the "bad guy" I guess.
1. Outsourcing is not new. And the reaction by the IT industry is not new. The garment industry was outsourced, the steel industry, to a degree the automotive industry. It happens. The people directly impacted don't like it but as long as it make economic sense, outsourcing will happen. Adapt to survive and thrive.
2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees.
3. Outsourcing is not easy in the IT industry. I can point to as many failures as successes. Not every company in the US that needs IT resources will be candidates for outsourcing. Not every job will end up overseas. In fact even though my entire IT organization is in India I'll soon be looking for a Systems Engineer in the US because I'm not happy with what I find in India.
4. Salaries for IT candidates in India are increasing very rapidly (think Silicon Valley, 1999). Given the inherent inefficiency of dealing with people great distances away, the economics of outsourcing are getting worse.
5. Decimation means to kill off 10%, not 90% as some posts have said. From Wikipedia: The word decimation is derived from Latin meaning "removal of a tenth." So the article is correct, this is decimation.
There is a significant difference between the two -
Outsourcing without offshoring is usually a positive strategic choice, and a result of businesses moving non-core activities to firms more focussed on that activity and likely to be more efficient/effective at that activity. For instance, most large firms outsource their catering to an external provider. It may have some effect on the overall job market, but usually just means that your role gets moved to a more specialist employer. As this is a move based largely on specialist people being able to do the job better, costs should stay cheaper.
Offshoring, on the other hand, is almost always negative and tactical and little more than a race to the bottom on simple employee cost (usually as a result of poor employment regulation/health and safety/general standard of living etc in the target country). Eventually, however, increased demand for jobs in that country will force wages up, and the only option is to move on to the next cheap economy.
The problem is of course, is there ANYTHING productive left for US and other western societies to do, that they can compete in? It increasingly appears not.
Actually, the real problem is that IT management is so impressed by the initial dollar savings that they are completely oblivious to the utter lack of quality in the work coming back from offshore. Our organization has outsourced about 2/3rds of its internal development to one of the largest companies in India (InfoSys). The product we receive back from them is consistently of poor quality, bug-ridden, and unmaintainable.
Unfortunately, upper management is still so pleased with the low hourly rates that they're not realizing that in the long term, they're paying for three times as many hours than would be necessary if the software were written correctly in the first place. I don't have much hope that they will come to their senses -- this has been going on for four years here now.
Essentially, it's down to the cost structures of labor and the economy as a whole. The levels of indirect expenditure on non-productive organizations absolutely kills the ability to remain competetive; spending on everything from intellectual 'property' through military expenses have to be paid for out of the pockets of the productive areas of the economy.
The problem is of course, is there ANYTHING productive left for US and other western societies to do
er..watching 5 billion channels of $#!+ on television, eating burgers and drinking "pop"? That's the US. In the UK, everyone can productively go on the dole...
Quality is not uniformly crap. The indians are the new japanese. They are working *very hard* to come up to speed. They are insanely driven right now- to the point of committing suicide if they don't get in the right schools.
If you think they are going to produce crap quality code in 5 years, you are setting yourself up for a massive fall.
The good news is in 8 years, their wage advantage will mostly be gone at current inflation rates. And that americans begin retiring in droves in 2012 creating a labor shorta
America is grossly overpriced because it is a safe, prosperous place to live where the government mostly (even in these increasingly fascist days) leaves you alone and has comparatively low taxes. Rich people are willing to pay a lot to live in a pretty place which the government won't take from them and where the government or some religious psychos won't arbitrarily kill them, torture them, or put them in prison.
The next generation of indians will not be *nearly* so driven. Just like the europeans, then t
2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees.
And this is the problem, countries like India and China can get away with horrible working conditions, lapses in saftey standards and employee rights that we take for granted in the U.S. I see examples of this all the time with illegal construction workers here in California. Since they are already in the country illegally, they have no insentive (or knowledge?) to follow OSHA saftey standards that a legitimate construction company would have to follow. If you can get away with the same thing with exported labor, exchanging a few lives for $$$ many companies are willing to do this.
So essentially, U.S. companies are deffering those costs by working overseas. I for one think companies should be punished financially in someway or guarantee the same worker rights in those foreign countries.
Another problem, and I think this is the biggest one, is the lack of national pride in the U.S. If the country you live in is say no more important to you then $200 off a plasma TV at Wal-Mart, what are you to care if jobs go overseas? I'm just saying that economically speaking, there is no added value in the tag "made in U.S.A." anymore since it is no longer associated with quality or pride with the average consumer. I suppose an employer sees their employees the same way now, looking at the individual and their qualities instead of "made in U.S.A.". However, if the U.S. does want to stay competitive it still must maintain self interest.
5. decimation can also mean: to cause great destruction or harm to
"Another problem, and I think this is the biggest one, is the lack of national pride in the U.S."
I agree but it isn't just about cost. 30+ years ago "Made in the USA" meant quality. Does anyone see it that way today? Often people are willing to pay more for things produced overseas because of higher quality.
You mentioned one possible solution for this problem: americans should buy products and sevices done by americans. But this is essentialy isolation from the rest of the world, if you want that to work properly, because you need to use just your resources. And also because you have to guard your R&D (if you are good enough, your R&D will be better than that of the rest of the world and you do not want cheap products based on your R&D but foreign cheap labor to tempt americans:) . Or, alternatively, if your R&D wont be better, you have to essentialy deny that the rest of the world exists otherwise americans wont buy "domestic but inferior" products.
So, IMO, such isolation wont work - it's something similar to what eastern block tried during Cold War or something which China has been doing for quite a long time and is now ceasing to do.
But what other choice other that isolation is there?
Well, openess.
But openess does not mean "we, americans, can do everything, all of you others can do nothing". So no barriers should be used to block others from access to american market.
But to maintain edge over others (in terms of economic production, standards of living,...) is like maintaining a "water hill" in the lake - without walls you can to that to some extent only by perpetualy pumping water like fountain (or by manipulating gravity, but I want dwell into such things for now).
In such analogy, such pump should be something similar to what amaricans used in the past to get the edge: good R&D, freedom,...
Of course, your wealth will always try to flow to poorer countries (because of market forces: cheeper labor, more thus cheaper natural resources, better location,...) but you can view it also in good light:
it is a good reason for your standard of living not to overgrow your own production capabilities (i.e. no deficit in foreign trade which can't be maintained in long term and ends ussualy quite dramaticaly, IMO)
you're helping others out from their poor state (but not by just giving them money but by giving them work to do and paying for it) - TheUglyAmerican wrote it: "Salaries for IT candidates in India are increasing very rapidly" - something not possible without US participating in free world trade and I thing far better than just giving Indians money for doing nothing thus making them unable to take care of themselves
So yes, maintaing the edge in free world trade is not easy. But it's same with everything else, whether you're trying to be better skier, better swimmer, better hunter, better mathematician, better painter - you have to work on that, not just sit there and claim you are better.
Same with me: for now I may be enjoying increase in business coming from the US and western Europe to midle-east Eurore but I know that if I go too far (asking too great price not backed by something appropriate: good quality, good performance,...) my business will go elsewhere very soon - maybe even back the where it came from.
But that's reality (and openess about the reality).
exchanging a few lives for $$$ many companies are willing to do this.
And herein lies the real problem. Someone wrote a letter to our paper a few days ago complaining about new toxic pollution laws (not CO2, this was stuff like mercury and things that are actually proven to kill people) complaining that the current laws are "already far too onerous" by requiring a level of pollution that would kill only one in a million people.
Yet people don't throw these guys in jail? If I ran around killing one in a mill
For me, the lack of national pride - or any kind of pride at all - is the big problem. From what I see in this forum and elsewhere, US workers are embittered, cynical and feel they're grossly underpaid, while foreign workers are not embittered, uncynical and are grateful to work for peanuts.
Someone tell me why I SHOULD hire a US worker or invest in the US with the above being true.
For ever job I could give a bitter and ungrateful US worker, I could give 10 jobs and materially improve people's lives in anothe
From what I see in this forum and elsewhere, US workers are embittered, cynical and feel they're grossly underpaid, while foreign workers are not embittered, uncynical and are grateful to work for peanuts.
"Have-Nots" who are given opportunuties tend to be positive. "Haves" who have opportunities taken away from them through no fault of their own tend to be negative.
Someone tell me why I SHOULD hire a US worker or invest in the US with the above being true.
And this is the problem, countries like India and China can get away with horrible working conditions, lapses in saftey standards and employee rights that we take for granted in the U.S.
First: we are talking about IT workers, right? Safety standards are at best a minor issue. Americans get Carpal Tunnel Syndrome too.
Second: you are responding to a post that says that there is fierce competition for IT workers and therefore burgeoning salaries. These are not abused factory workers. They are PHP program
While IT workers aren't 'abused' in the sweatshop sense, don't trivialize the challenges American IT workers face. We're not complaining about jobs without free soft drinks, but about jobs where we're doing the work of two or three people for 60% of the salary we could command five years ago. American wages are being eroded much faster than Indian wages are going up, with the difference being pocketed by employers, and any attempt by American workers to ask for more jobs, better wages, or better working conditions are discouraged by the threat of jobs moving to India.
What I fear is something called 'wage arbitrage.' Transnational corporations can go anywhere to take advantage of low cost labor, and skilled workers trapped behind national borders cannot follow. So wherever corporations have jobs, they can keep costs down by threatening to move workers overseas. Governments are desperate to keep these jobs, so they're happy to pass laws at the behest of the corporations, giving them tax breaks or making it illegal for workers to unionize.
So I really don't see it as "America is hurting, but India is turning into a technological superpower." If it were that simple, I'd probably just start looking into migrating. India's day in the sun will only last as long as they don't do anything stupid, like try and tax the corporations to pay for the education system that benefits them or improve the lot of the rural poor. The moment that happens, you'll see a massive shift away from India towards some more compliant country.
Of course, that will raise wages in Sierra Leone, or wherever the jobs move to. But not nearly as much as wages will fall in India, and again, corporations will pocket the difference. It's all a huge shell game designed to transfer as much of the wealth created by labor into the coffers of owners, while giving as little back as possible. Wage arbitrage gives capital a huge advantage in any negotiations with labor. But in the long run, this destroys the middle class, and erodes nations' abilities to invest in the health and education of their citizens, which are necessary for businesses to run successfully. So big business is reaping short term profits while undercutting both demand for their products and the ability of labor to create those products.
IOW, I'm happy to see India doing well, but I think it's part of a long-term trend that is going to hurt everyone.
I agree with most of what you're saying, but I don't agree that the "lack of national pride" in the U.S. is the "biggest problem" we're facing.
The problem with that line of thought is, people run around trying to drum up support for things made in the U.S.A. with "peer pressure" vs. trying to ask the tough questions. (EG. WHY do people not particularly care if the Made in the U.S.A. tag is on their product or not?)
I saw this clearly with cars and trucks throughout the 80's and into the 90's. You had your union workers proudly driving around their Chevy, Ford or Dodge trucks with big bumper stickers slapped on them telling you to only buy U.S. made vehicles. Yet, most of the general public was reading publications like "Consumer Reports" before making such a big purchase, where they learned that every year, the most-reliable and best made vehicles were coming from Japan instead. So what do you do? Buy U.S.A. anyway and receive an inferior product (and by extension, continue to vote for inferior products with your dollars)?
I think "pride" in U.S. made products will only really come when we've earned it. This isn't going to happen as long as we're only concerned with selling "as cheap as China" either. We need to quit dumping our skilled jobs on other countries to save a buck in the short-term, and then wondering why people don't really like our products better than foreign ones!
Wasn't part of the opening premise of Neal Stephenson's "Snowcrash" that everyone's wages in the world economy had been equalized and everyone made the same amount of money--that of a Pakistani brickmaker? That was fiction of course, but the reality of the situation is that we have given corporations free reign to do as they please without consequence. Coporations as entities have only one allegiance, the dollar (and not the US dollar at that). It doesn't matter how patriotic their captains are, the doll
Outsourcing is certainly not new, however one could argue that massive outsourcing is new for white color jobs that require a significant level of very specific education. Traditional manufacturing jobs do not necessarily require a university degree.
Exactly - for ages, those in the IT world scoffed at the clericals and other low-skill employees who were obsoleted by advances in technology they created and/or implemented. Secretaries have largely been wiped out due to the advance of email and word processing, manufacturing and distribution personnel have been cut due to the development of industrial technology, retail workers threatened by the progress of e-commerce, etc. Now, when IT workers themselves are threatened by advances in communications techn
Exactly - for ages, those in the IT world scoffed at the clericals and other low-skill employees who were obsoleted by advances in technology they created and/or implemented.
In 18 years of working in a corporate environment, I've never seen this attitude. I always appreciated having a secretary for our department, having documentation specialists, etc., because some of those folks were far far better at what they did than we programmers were, and it was a sad day for most of us when those folks were le
A few years ago, the work that I would have been doing would have been absolutely dull. Things have changed now - I'm involved a lot more with customers and working out how to help them instead of being in a lab all day. Outsourcing has meant that the dull parts of my job have been moved away but the juicy bits remain. And guess what guys and girls, this makes me happier.
Incidently, I read something like for every dollar of work shipped out overseas, we get to see 1.30 in return. This is a well known
"Incidently, I read something like for every dollar of work shipped out overseas, we get to see 1.30 in return."
I wish you would think more critically about the 'we' part. When a company offshores, the extra 30 cents is only seen by the owners and shareholders. The people who get laid off don't see that 30 cents. That 30 cents helps those who make their living off the interests of their investments, but the bast majority of Americans make their living from a paycheck.
I have thought a lot about it. I've also traveled around the world, in a non-tourist capacity, and witnessed the reality first-hand.
If excessive taxation caused the middle class to shrink, Europe would have a small, rich, wealthy class, and throngs of poor people, and relatively unregulated, untaxed places like Africa and South America should have a burgeoning middle class.
But in fact the exact opposite is true. Places without regulation like South America have a wealthy, ruling class of a few, well-connected families. The other 95% of the population are living on the edge. It wasn't until I lived in South America that I saw homeless families -- mom, dad, and kids -- living on the streets. Until then, I had thought that a homeless person was just a crazy guy who heard voices and couldn't hold down a job.
So then in Europe, with high taxes, extensive regulation, and strong unions, we see the largest middle classes and the highest standards of living. So, the reality is the opposite of what your theory predicts. The states with the most regulation, highest taxes, and stongest unions are those with most highest per capita income and the highest standard of living.
Without government regulation, greedy wealthy people will exploit the average joe to maintain their wealth. There are good, honest rich people who want to treat people humanely and compete fairly in the marketplace. However, they are quickly outcompeted by rich people with no ethics, who have no problem bribing officials and having people killed to get what they want. You can't compete with a cheater when you are playing fairly. So what happens is that a kleptocracy arises -- the best cheaters rise to the top.
What government regulation does is keep the game fair, so that honest players have a chance at winning. It's not a perfect solution, but it is far better than the alternative.
Again, I with you would think more critically about these issues. As the slashdot sig goes, the plural of 'anecdote' is not 'data'. I am glad you and your friends are having a good experience with work, but your situation is not representative of reality for most Americans. You can't just look at what is immediately in front of you and think, "Things are going well for me; therefore, things are going well for all Americans."
5. Decimation means to kill off 10%, not 90% as some posts have said. From Wikipedia: The word decimation is derived from Latin meaning "removal of a tenth." So the article is correct, this is decimation.
True enough, 90% would be a massacre.
6. I could be wrong on any or all of the above.
I'd say that mostly you are right, but 'Adapt to survive and thrive.' is easy to say but for a lot of people it is hard to put into practice. Personally I don't have any trouble being a IT employment-nomad and moving every s
2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees.
Wrong attitude for businesses to take, seems to me -- competing on cost alone results in a race to the bottom, which is what we seem to be experiencing. I've worked with Indian teams, in person, and they are
Over the last 20 years I've watched as American business management seemed to forget about delivering the best product, and focused on maximizing profits instead, as if the two could be entirely separated.
There are a number of cases of this to prove the point.
Walmart and cronies, and the people who shop there, are mainly to blame for a lot of this IMHO. They kept demanding lower and lower prices from manufacturers, which resulted in many of the manufacturers needing to cut costs. Slowly over the years manuf
Your points are absolutely valid. As the economic favor hits India and other nations, they will experience the same costs increases that have been experienced in the US over the last 40 years only in a fraction of the time. This makes the cost of doing business overseas less attractive than the cost of doing it internally. This explosive growth can become problematic if the area doing the growth (industry/country/region) can't handle it.
As long as there is a computer located in the US, there will be a n
Well, one thing seems to be improving at least: the quality of discourse on offshoring.
I want to raise a counterpoint to your point 2:
2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees.
I'm not sure I agree with this, although I think that protective measures
Decimation means to kill off 10%, not 90% as some posts have said. From Wikipedia: The word decimation is derived from Latin meaning "removal of a tenth." So the article is correct, this is decimation.
Kind of, I mean, nobody's being killed...
I've always thought it was legitimate to use decimate when you're refering to removing a small, but not insignificant, fraction but doing so in a particularly harsh way. For example, "Our profits were decimated!" wouldn't work because a slight reduction in profits
It will be better when indian tech companies start making their own products to compete with us, instead of us using indian tech companies to make our products. It will generate a maelstrom of competition, and will be better for both sectors - the Indian tech companies won't have to rely on american tech companies to hire them, and will instead focus on creating solutions that only a new industry could create: a new OS, maybe, that can take microsoft down? Once Indian tech companies realize that they can str
I am one of those people that the article refers to. There is an old urban legend that says, "talk is cheap." What do you need? What do you offer in return?
1. Outsourcing is not new. And the reaction by the IT industry is not new. The garment industry was outsourced, the steel industry, to a degree the automotive industry. It happens. The people directly impacted don't like it but as long as it make economic sense, outsourcing will happen. Adapt to survive and thrive.
But you could (not that we do) put tariffs on the garments and steel that 'American' companies try to send back here from the nations they outsourced to. Thus if an American corporation decides
Yes, you are the "bad guy", although ultimately, the blame can probably be at least equally placed on the owners of whatever company you work for, as well as any superiors you report to other than the owners. Of course outsourcing/offshoring is not "new", and of course you can point to as many failures as successes with it. All of this completely dodges the point. As the original article clearly stated, the problem is, for every I.T. position that is sent overseas, we get nothing in return from the nation
You could always work for the government in IT like I did for a while. The government requires that you be a US citizen for any IT job that has even the slightest security risk so they'll never be exported. The problem with those jobs is that unless you live in a area with a low cost of living or it is very high level it is hard to make ends meet and you have to leave for the private sector (which I did).
Regarding #5, this isn't quite correct. Decimation at it's roots means to kill off 10%; however, decimation can be used to mean kill of the majority of a group so long as no reference is made to a portion of the group. i.e., you can say, "decimated the population" to mean the majority of the population was destroyed; however, you cannot say "decimated half the population" for the reasons you mention. If you are explicitly referring to a fraction, that fraction must be 10%. Forgot the best references, but wik
I disagree. I work in the semiconductor industry and I think the tide has turned AGAINST outsourcing. I have *NEVER* heard an outsourcing story that ended well. The kind of outsourcing stories im hearing are "we outsourced our PCB manufacturing and the defect rate is 30%, our board costs are 1/3rd what they used to be, but our field failure rate is 10x and our QC cost is 2x and our customers are pissed." In software same deal... "the code we got back worked but was unmaintainable. We spent two years rewriting it."
What I *AM* seeing is a hell of a lot of chinese mainlanders being hired as engineers *IN THE US* depressing wages. Companies are starting to demand a LOT more for less money.
Outsourcing is based on a falicy which is that workers are fungible resources. Engineers are not fungible resources and any management that thinks they are has their heads way up their asses. The US *DOES* have a seriously bad management culture which is a far bigger threat than outsourcing IMHO.
Again, this is just one opinion from in the trenches here in southern california.
by Anonymous Coward writes:
on Monday October 02, 2006 @02:18AM (#16273627)
"The US *DOES* have a seriously bad management culture which is a far bigger threat than outsourcing IMHO."
A few years ago, I worked as a developer in a fairly large well-known tech company. The progression: Starting there, things were pretty good--well staffed, good morale, nice people to work with. The push for the "bottom line" started creeping in after a year or two on the job--secretaries got laid off, senior engineers got laid off, a website was set up for us to do our own expensing, travel, etc. It was hell. I, a well-trained software developer, getting paid pretty good money, was expected to deal with making travel arrangements, fighting with HR, etc. while my time was being billed to an engineering project. It isn't worth working for a company where my time and talent is simply not valued.
Yeah, what a hassle. Having to book your own travel. So you actually have a ticket when you get to the airport. So you actually get where you're going without a long layover in the Las Vegas airport (because it was $20 cheaper). So you can actually get the travel booked without the secretary bringing you bad itineraries the first 4 times. The much convienience would be too much for anyone.
And those buttons on the travel web sites are so hard to push for a "well-trained software developer".
You had a bad secretary. A good one will automatically juggle your meetings, your costs, and the pain to your family of being gone on your wife's birthday. And that secretary can do that for 20 people for the same conference and get you a discount rate that helps justify his salary, along with knowing where to get decent local coffee and book a hotel room for a visiting guest on Thanksgiving weekend.
Such people are priceless, just as a really competent IT person who can make the printers work right for Po
From what I've seen of the management in big companies, the inability to speak clear english is an asset (I have yet to decipher what the hell a "paradigm shift" is). So outsourcing to another country where the locals don't speak english as their first language would be easy! All you have to do is sit them by a speakerphone and give them a binder containing all the latest buzzwords and impenetrable business-speak.
From what I've seen of the management in big companies, the inability to speak clear english is an asset...
:)
Way to go!
This "strange language thing" about big companies amazemes me too. But it's also same with my "native" field which is IT: it too is quite often full of buzzwords, but I suspect it is mainly just the "import" forced upon us by Sales&Management(R)(TM)(whatever).
The arguement that foreigners dont do as good of work only works for the begginging of any phase of outsourcing. Many americans believed that "jap cars" were inferior to American cars. We now know that they are engineered at least as good if not better than American cars. Some people still hold the xenophobic view that American cars are somehow impossibly better becuase Americans are infallable. You might be right that you have only heard the horror stories or maybe you only remember the horror stories.
The arguement that foreigners dont do as good of work only works for the begginging of any phase of outsourcing. Many americans believed that "jap cars" were inferior to American cars. We now know that they are engineered at least as good if not better than American cars. Some people still hold the xenophobic view that American cars are somehow impossibly better becuase Americans are infallable.
Your reference there is flawed. Japanese cars aren't built by Japanese firms as a cost-saving exercise for American companies. They're built by successful Japanese firms, with excellent research and development who produce a product that's of high quality and is in demand around the world. Their success is driven by the skills of their own people.
Outsourcing is usually (always?) undertaken as a cost-saving exercise. The idea is that a US-based firm can produce the same product/service they're already producing, but at a lower cost to themselves. With this comes the inevitable quality issues, not to mention the fact that we're underpinning the foundation of the outsourced-nations' crappy treatment of their working population.
You might be right that you have only heard the horror stories or maybe you only remember the horror stories. Maybe outsourcing does lead to worse products all the time these days but as the education of India goes up they will be doing just as high quality of workmanship as we will.... and as India develops, their cost of living will rise in line with their quality of life, and they'll start requiring the sort of pay that their skills should earn. Over here in the UK, there's already cases of 'reverse-outsourcing', where Indian firms set up call-centres amongst the poorest areas of the UK.
My reference was not perfect but i was ttying to show that racism and nationalism are big factors when peoplem decide who can and can't make good products. Im not really talking about the call center jobs that are being outsourced, i am msotly refering to the skilled positions such as programmers whos jobs are being outsourced with quite a bit of success. Once again India is not perfect yet and they dont have decades of experiance but their schools are almost as good as ours and they are improving all the
Imagine a company with zero engineers, and 100% managers, it cannot survive.
Now imagine a company with 100% engineers, which spend 5% of their time doing 'management' , it would still work and turn out a product, see google and apple.
A smart engineer can learn in 6months how to be a manager, a manager though would take 10 years to be as good as an engineer.
After all there are no management 5 year degrees at unis are there.
A smart engineer can learn in 6months how to be a manager, a manager though would take 10 years to be as good as an engineer.
Oh, if only this was true. And I'm speaking as an engineer here, btw. I have encountered numerous examples of 'smart engineers' in management who have no clue what management entails, and no desire to learn. Of course there are clueless, MBA type managers out there too, but I have to laugh when I read comments like this.
Good managers are like good engineers. They are continuously
Having all the engineers do 5% of their time managing is a disaster in the offing: the one of them who enjoys office politics, and is good at gathering resources, will wind up as CEO. If they have other qualities that are really bad, they will still succeed in becoming CEO, and destroy the company. A few engineers that are also good managers can make a company wildly successful, but these are rare.
Now imagine a company with 100% engineers, which spend 5% of their time doing 'management' , it would still work and turn out a product, see google and apple.
Yes, and now look at some of the disastrously bad decisions made by the engineer-managers at Apple. Starting with refusing to license the Mac OS in 1985.
Now imagine a company with 100% engineers, which spend 5% of their time doing 'management' , it would still work and turn out a product, see google and apple.
Please just keep telling yourself this. Google currently has 100+ postings in the US for 'manager' positions -- product management, account management, project management. Surprisingly none of these positions have 'degree or certification in engineering' as a prerequisite. Oh, as Steve Jobs only has 1 semester of college education [wikipedia.org], i don't think he
Engineering and management require different skills sets.
Sometimes the same person have them both, but on many others it just does not happen.
The best way to create a bad manager is to force a good Engineer without the necessary skills to become one.
The assumption, very common around here, that Engineers are some kind of uber human that can learn anything thrown at them is laughable, to say the least (disclaimer: I am an Engineer and at time I have had managerial responsibilities)
Indeed, but why do you think it is an US problem only? The same happens in EU - up to the point that Siemens sold its workers instead of laying them off on its own and all this while giving his manager 30% raise - I did not think german socialism is so ruthless. I am not sure whether majority of outsourcing projects fail. I know that a study by Frauenhoffer institute in germany showed that big group of offshoring companies (I think they analyzed the ones of 400 or more employees) came back to their original
I am an electrical engineer who manages an offshore engineering project in India. I can tell you how it's gone so far:
- Difficulty in communications, both because of the time shift and because of difficulty penetrating the language barrier
- Schedules which are inordinately longer, often due to technical difficulties in accessing development tools remotely
- Long lists of errors when specifiying new parts
In the end, it's not saving the company any money. It only saves them money on paper because they
Let me guess...you're American, right?
Yes, it's a bigger threat to mankind than Marxism or militant Islam. Please allow me to make my point. Militant Islam, it only stems from American interventionism in Arab countries and its blatant support of Israel. That's a subject I know very well, since I'm a muslim myself. I grew up in an Arab/Muslim country that's, like all other Arab countries (with the exception of Palestine and Lebanon), a dictatorship. There is no politic
So, if we are supposed to rely on education, technology and research and development to keep our edge as a country, we are already in trouble, especially when one considers that even if we were to turn things around tomorrow, we have likely done enough damage that it will take a decade to recover.
Industrial recovery is not possible while we trade with non free China and your government/corporate masters have you screwed out for RD too.
GE, Microsoft and others have already started moving their research offshore. I'm talking about basic industrial research, like turbine design. "First World" Physics, no longer viable [theregister.co.uk], so forget it. Brains are cheaper, and theoretically free, in Russia and India. The situation is worse in China, where people really are not free.
Our trade was supposed to set the Chinese free, but it's working the other way around. It's just business, right? [slashdot.org], and China is just another big company. Not quite. Our big dumb companies might have you by the balls, read your email [theregister.com], and sell it all to big brother [essential.org], but they can't put you in jail yet. That will take another dissaster like NorthWoods [wikipedia.org] so that everyone is really paranoid and ready for rationing and a WW2 style command economy.
The only way out is lots of wealth creation to raise everyone's standard of living, but it's not happening. With all the mergers, wealth will continue to move to the already very rich owners of those companies. The mergers are the ultimate result of government favoritism of large companies. IT was supposed to be the poster child of new competition and robust US Performance. It has not happened because incumbent companies were allowed to crush new comers, so that "just enough" competition would be left. Now, we all sit under the M$ monopoly, two big media companies, two "broadband" companies, one electric company and a merged OPEC/ExxonMobileRoyalDoubleDutchFuck and wonder where the jobs are and why service sucks. If we can't help ourselves, we will never be able to help anyone else.
Eventually, this will get the rich too. A real depression is no fun for anyone, but those happen when wealth concentration reaches a critical level. When power is concentrated enough, the American Empire will go to war with China, kind of like the great Royal Fuck Festival that was the first World War.
A real depression is no fun for anyone, but those happen when wealth concentration reaches a critical level.
Really? Where do you get your definitions from? Because a "depression" or even a recession (a long term recession constitutes a depression) are not caused by anything like that. Oh wait, you're quoting John Maynard Keynes. Riiiight, I see. Is that what they're teaching in school now? That "hoarding" causes recessions? Good heavens.
When power is concentrated enough, the American Empire will go to war with China
Will it now. Just a quick exercise for you - try to calculate how much of the US economy depends on the Chinese economy. Then do the same calculation backwards. Now tell us about this "war". What are the justifications for it again? Why does it happen? When? How exactly? Please do elaborate. Unless you're just jumbling together "hot topic" words to get some karma like you always do...
M$ monopoly
...ah yes, you are. Silly me, I thought you actually had a point.
Good old twitter. China is evil, "big dumb companies" are evil, "M$" is evil, Kermit the frog is evil and everything should be free. Same broken record but with impressive-sounding words and lotsa links. Karma every time.
``Is that what they're teaching in school now? That "hoarding" causes recessions?'' Well, doesn't it? Hoarding causes that money not to participate in the economy. At the same time, the money is still there, so the value of the money that does circulate stays the same. So, in effect, less value is participating in the economy. Isn't that a recession? I'm just asking; I'm not an economist.
``Will it now. Just a quick exercise for you - try to calculate how much of the US economy depends on the Chinese economy.
Well, doesn't it? Hoarding causes that money not to participate in the economy. At the same time, the money is still there, so the value of the money that does circulate stays the same. So, in effect, less value is participating in the economy. Isn't that a recession? I'm just asking; I'm not an economist.
If someone hoards a huge amount of money and keeps it out of circulation, then the market adjusts and starts to behave as if the money no longer exists, causing deflation, which is an increase in an individual dollar's purchasing power. Now, inflation and deflation are the opposite of each other, and both have their pros and cons.
Inflation is good at fighting unemployment, as the continual decrease in purchasing power is an effective way of circumventing minimum wage laws. E.g. if the minimum wage is 5 dollars per hour, and there was an inflation of 5% during the following year, then the real wage, i.e. the purchasing power of the 5 dollars have decreased by 5%. Thus employers are now effectively paying 5% less to their employees, even though the amount of dollars paid is the same, and this means that it now becomes profitable to employ people for less productive work, resulting in an decrease of unemployment. The downside of inflation is the reduction in PP, and the higher demands on ROI. If inflation is 5% a particular year, and a company's profits grow only 3% that year, then the real profit of the company has decreased. This also works on a individual level, i.e. I have 5000$ today, wait a year, and then I have lost 5% of my wealth, even though the amount of dollars I have is unchanged. What this results in is that any investment that has a ROI that is less than inflation, is actually making you poorer. No need to wonder why stockholders/owners/investors demand ever-increasing profits from corporations, inflation is the culprit.
Deflation is pretty much the exact opposite. If there's a deflation of 5%, then even investments with a negative ROI are profitable as long as deflation is higher. This makes having money lying on a bank account a good investment, as you'll be able to buy more stuff with that money after a year. Of course this also increases unemployment, at least unless the minimum wages are decreased at the same rate as deflation.
Another bad/good side of inflation/deflation (depending on if you have debt or have borrowed money to others) is that as the PP of a dollar increases, the real size of a debt also increases, which is bad for those who have debt. Again the opposite is true.
IANA(K)E, which could be seen as a good thing, depending on which school you follow.:)
Will it now. Just a quick exercise for you - try to calculate how much of the US economy depends on the Chinese economy. Then do the same calculation backwards.
In 1914, England and Germany were each the other's largest trading partner.
Parent actually has good points. You just insulted him "in style", but the "in style" part is of course debatable. Wealth is always relative, and never absolute.
Thus, it's impossible for wealth to be created or for it to disappear in absolute terms. But what IS possible for a relative quantity? Aha, that's right -- concentration. Yes, in relative terms, wealth can concentrate. That's all it ever does. It either concentrates or diffuses, and it's never created or destroyed.
Hey, you're the first to mention the concept for which I was looking, so you get the reply:
The only way out is lots of wealth creation to raise everyone's standard of living, but it's not happening.
This is correct, in my opinion. The big myth - which was not cited in the article - is that you can actually maintain an economy with high standard of living based on "high value" services alone. The key to an economy is really its ability to produce wealth - hard, physical, tangible goods that, as you said, actually raise the standard of living of that society's citizens. All the dentists and doctors in the world cannot help you if you don't have good tools, good infrastructure, or even good food.
I remember from one of my early economics classes that the only wealth-producing endeavours known are agriculture and manufacturing - the rest of economic activity just shuffles that wealth around.
If the economy of a country switches to being service-based, it is then a slave to the actual wealth-producing nations, because if the nations that have the wealth no longer need or want the services, with what is the service-based economy left? The reason the US economy used to be so robust is it had a good balance between service and wealth production. The shift away from producing wealth locally (I don't mean by ownership, I mean physically) is probably a greater risk than most are able to recognize.
Lesson number 1: "wealth" is not the same thing as "value".
I would agree that the value that is placed on manufactured goods has been declining, but that does not mean that the wealth inherent to the manufactured goods is any less.
Put another way: The price of a house does not changes its square footage, ability to store things and protect from the environment, etc. The wealth of a house (sans damage or additions) is constant, regardless of the price (value) associated with that house. Yet another exam
Why should small/medium sized companies develop software in the US? It's too damn risky. If they compete with or are considered a threat to any of the larger companies, they will just get sued out of existence for "patent infringement". It doesn't even matter whether they have infringed patents, because suing someone for patent infringement is am easy way to cost them a lot of money and not have it immediately obvious about whether you're bluffing. Patents are usually very difficult to read and understand.
Seriously, if business in american is costing > 100k per person, then move to china. Pay for all moving costs and setup shop in Shanghai.
1) rent is 5x cheaper 2) taxes 10% max 3) everything is cheap 4) you can be paid $15000USD salary and live real well there. 5) profit.
Buy an apartment for peanuts in brand new towers, and enjoy. Its not like the sovient union, you can still pretty much do anything as long as you dont piss of the govt.
There are plenty of english and americans and australians in Shanghai, its n
What's the point? Why recommend education when "the right" only want salvation?
Education costs too much, its socialist even. Its much cheaper to just lower minimum wage and health care requirements so businesses can hire more employees to make up for the lost productivity and focus. We need to find ways of keeping everyone busy, not find ways to automate us all out of jobs. What would we do with a planet full of college grads and no work for them to do? We'd starve, that's what.
The news has been telling us for a fews years now that IT job market is collapsing in the US. A lot of high school guidence counselers are discouraging kids not to go into IT.
If you want a computer science degree so bad, consider matching it with something else as well. Mathematics, Chemistry, whatever. I don't care. Just be agile in your career. That is something that is tremendously important now that was not that so important previously.
There is a definite attitude I see in a lot of workplaces. The attitude is predominantly "I may not do your job, but I know it better than you" among managers.
I am a CAD Drafter and at my old job our IT manager had it in his head that we would be faster with AutoCAD LT than regular AutoCAD. For those of you not familiar with Autocad, LT is an extremely crippled version of the software. There's no command line, no expandability with LISP routines, and no 3D. We kept telling him that switching to LT was
Dumping products on world markets causes a certain response from the Federal Government; Why is it that 'Dumping Services' on world markets is so largely ignored?
The biggest drivers for job growth right now are housing and health care - job growth in any other sector over the past 6 years has been very small. And the housing bubble will burst fairly soon.
In more trouble than most realize... (Score:5, Insightful)
The thing that worries me is that this is not an isolated employment sector, and I predict that we are in more trouble than we might know. Historically we have relied on our research and development to keep this country on top technologically, but over the last five years or so, we have been reducing the amount of funding we spend on research and development, particularly in the biosciences. For example, if you were to look at NIH grant paylines, five years ago the payline was around 33%. Next year it is predicted to be anywhere from 10-14% meaning the likelihood that a researcher will obtain funding has been cut by more than half. In fact, research and education spending on the whole is down under the current White House administration. So, if we are supposed to rely on education, technology and research and development to keep our edge as a country, we are already in trouble, especially when one considers that even if we were to turn things around tomorrow, we have likely done enough damage that it will take a decade to recover.
Re:In more trouble than most realize... (Score:5, Interesting)
"Alcatel does not do the kind of research that Lucent has historically done at Bell Labs. Future projects at Bell Labs will need to focus on productization in a 5-year timeframe. This transition has already started."
Science and research for the sake of science and research is now officially dead at Bell Labs. If they can't turn it into something that can be sold within 5 years, shitcan it.
Re:In more trouble than most realize... (Score:5, Interesting)
Meanwhile, at Bell Labs, things have been business-focused for a very long time. Remember that Thompson, Richie et al. couldn't get funding to make a new O/S, they had to pretend they were writing a text processor instead [ualberta.ca].
Re:In more trouble than most realize... (Score:5, Interesting)
I'm not sure you counterexample is a good one. Operating systems are more likea product than basic research, although at the time this was less so than today. You take away know-how from both, but you need to have a plan for what to do with a product. Up until then, OSs were tied very closely to hardware; UNIX turned out to be the most portable operating system ever.
You are missing a major point though. Bell Labs had enoug people of this caliber running around that a couple of rapscallions could, with a wink and their fingers crossed, create an operating system under th guise of porting roff. In part this was due to the overal wastefulness of Bell as a regulated monopoly. They told the regulators how much it took to run a telephone system, and the regulators marked that figure up. But it goes to show if you're going to waste money, at least you should waste it on something useful.
Another factor that is different now than then is government investment in research. Part of this was the cold war, which post sputnik threw a lot of money at applied research projects, possibly because nobody knew where the next marginal dollar.
Current attitudes towards government investment in applied research in Washington are rather negative. The idea is that it amounts to "government planning", and that applied research interferes with market efficiencies in allocating research capital to applied problems. Basic research -- OK for the government, but applied research is somebody else's job. Unfortunately, their counterparts in the US private sector is increasingly thinking the same thing, that their job is watching the quarterly profits and applied research is somebody else's job. That's what Lucent was saying; they shouldn't be in the applied research business anymore. The Federal government has cut research funding in energy R&D, agricultural R&D, and at NOAA, NIST and other Department of Commerce agencies.
It's not that the government doesn't do research anymore. Nor is it the case that the government and private sector don't do ANY applied research. But Lucent has a point. A private sector company can't be expected to invest in research that pays off in ten years; there are too many uncertainties in business to ask investors to shoulder that. Five years is reasonable. But if five years is a reasonable end point for private sector research efforts, and, say, twenty years is a reasonable starting point for public sector research efforts, then we have a massive gap in the 5-20 year range. That applied research gap is a massive national economic vulnerability.
Re:In more trouble than most realize... (Score:5, Informative)
IIRC, they were regulated under a CAPM regime. Under the Capital Asset Pricing Model, regulators allow for a "fair" rate of return on invested capital. (The definition of "fair" might or might not include a reduction or negative premium to account for the near-zero risk, but that's not relevant to my point.) So, regulated monopolies such as AT&T had a very strong incentive to boost their fixed assets. Any "investment" (i.e., spending) they could capitalize would go into their rate base, which would allow them to earn more profit. (They also had an equally strong incentive to use the slowest depreciation accounting methods, thereby extending the allowed earnings on those "investments".) It doesn't completely explain their investments in R&D, but it does help explain the very posh nature of the physical plant at the old Bell Labs, for example.
But it goes to show if you're going to waste money, at least you should waste it on something useful.
Not really. The lesson was, "if you're going to waste money, at least convince the regulators that it was 'investment' and not 'spending'".
Re:In more trouble than most realize... (Score:4, Interesting)
Cough, cough, Bell Labs Holmdale. Other than a few show pieces, I am not sure that Bell Labs or the Bell System had physical plant that was any more posh than any other industrial company at the time. The Bell System physical plant at Long Lines and the local operating companies was solidly overbuilt and equipment was constantly maintained. The biggest thing that changed after the Bell System breakup was that instead of engineering and building telco plant that would operate continously without service interruption for 20 or 30 years, physical plant was designed to last a much shorter time, perhaps 5 years.
I believe that Western Electric was one of the reasons that Bell Labs was well funded. In 1981, the operating companies paid Western Electric about $500 for all of the parts that made up a Touch Tone, Trimline phone. The Trim Line base cost over $200, the Touch Tone handset cost over $200, the coiled cord cost about $10, and the line cord cost another $10. The operating companies bought almost everything from Western Electric, and everything was gold plated; including pens (Waterbury, of course), paper, electron tubes (some of which are coveted today), vacuum cleaners, wire, telco equipment (including installation), dust cloths, tools, computers (which were not called computers, usually they were called processors or controllers) -- everything. Western Electric's prices were not regulated, the operating companies' rates were based upon what it cost to provide the service - which included what it paid Western Electric.
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I'm glad nobody's told IBM that.
Jan 2001: stupid reference point. (Score:4, Insightful)
For anyone that has forgotten, you could get an IT job during dot.com if you could just spell cumputer^Wcomputer. For a more realistic point of reference, choose a point before dot.com, say Jan 1999. Do that and you;ll probably notice some growth.
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Daniel
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I'll qualify that- not since 1876. Because there have been no powerful PEOPLE since 1876- the year that corporations became first rate citizens and the rest of us became slaves. The system seduces us, makes it look like we're doing well- as long as the continuation of the system benefits from our use. But the guy living in the $12 million mansi
Re:Jan 2001: Stupid comment (Score:4, Insightful)
He blames it on offshoring in general, and I agree with him. Off-shoring IT is a direct IT-job losing situation, but all off-shoring has a serious impact on our economy in general. It's the huge companies getting bigger, and being as greedy as possible while doing it.
So, imagine if he compared things to the year 2000 or 1999? It would look *completely* bleak.
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that previous slashdot article on What's Really Propping Up The Economy [businessweek.com] (anwer: health care services) pointed out
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Re:In more trouble than most realize... (Score:5, Funny)
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so much can be done remotely (Score:3, Interesting)
If I can mail a firewall across the states, someone in India could mail one from there. Likewise with a router.
Is it nicer to have someone on-site? You betcha. But its cheaper to have an on-site guy who is just competant enough to plug in the port marked "WAN" and outsource the harder configuration to
Re:In more trouble than most realize... (Score:5, Interesting)
1. Outsourcing is not new. And the reaction by the IT industry is not new. The garment industry was outsourced, the steel industry, to a degree the automotive industry. It happens. The people directly impacted don't like it but as long as it make economic sense, outsourcing will happen. Adapt to survive and thrive.
2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees.
3. Outsourcing is not easy in the IT industry. I can point to as many failures as successes. Not every company in the US that needs IT resources will be candidates for outsourcing. Not every job will end up overseas. In fact even though my entire IT organization is in India I'll soon be looking for a Systems Engineer in the US because I'm not happy with what I find in India.
4. Salaries for IT candidates in India are increasing very rapidly (think Silicon Valley, 1999). Given the inherent inefficiency of dealing with people great distances away, the economics of outsourcing are getting worse.
5. Decimation means to kill off 10%, not 90% as some posts have said. From Wikipedia: The word decimation is derived from Latin meaning "removal of a tenth." So the article is correct, this is decimation.
6. I could be wrong on any or all of the above.
Re:In more trouble than most realize... (Score:5, Informative)
Re:In more trouble than most realize... (Score:4, Informative)
Outsourcing without offshoring is usually a positive strategic choice, and a result of businesses moving non-core activities to firms more focussed on that activity and likely to be more efficient/effective at that activity. For instance, most large firms outsource their catering to an external provider. It may have some effect on the overall job market, but usually just means that your role gets moved to a more specialist employer. As this is a move based largely on specialist people being able to do the job better, costs should stay cheaper.
Offshoring, on the other hand, is almost always negative and tactical and little more than a race to the bottom on simple employee cost (usually as a result of poor employment regulation/health and safety/general standard of living etc in the target country). Eventually, however, increased demand for jobs in that country will force wages up, and the only option is to move on to the next cheap economy.
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Re:In more trouble than most realize... (Score:4, Informative)
Actually, the real problem is that IT management is so impressed by the initial dollar savings that they are completely oblivious to the utter lack of quality in the work coming back from offshore. Our organization has outsourced about 2/3rds of its internal development to one of the largest companies in India (InfoSys). The product we receive back from them is consistently of poor quality, bug-ridden, and unmaintainable.
Unfortunately, upper management is still so pleased with the low hourly rates that they're not realizing that in the long term, they're paying for three times as many hours than would be necessary if the software were written correctly in the first place. I don't have much hope that they will come to their senses -- this has been going on for four years here now.
Theres always the miltary (Score:4, Funny)
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Essentially, it's down to the cost structures of labor and the economy as a whole. The levels of indirect expenditure on non-productive organizations absolutely kills the ability to remain competetive; spending on everything from intellectual 'property' through military expenses have to be paid for out of the pockets of the productive areas of the economy.
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er..watching 5 billion channels of $#!+ on television, eating burgers and drinking "pop"? That's the US. In the UK, everyone can productively go on the dole...
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The indians are the new japanese.
They are working *very hard* to come up to speed. They are insanely driven right now- to the point of committing suicide if they don't get in the right schools.
If you think they are going to produce crap quality code in 5 years, you are setting yourself up for a massive fall.
The good news is in 8 years, their wage advantage will mostly be gone at current inflation rates.
And that americans begin retiring in droves in 2012 creating a labor shorta
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Re:In more trouble than most realize... (Score:5, Insightful)
And this is the problem, countries like India and China can get away with horrible working conditions, lapses in saftey standards and employee rights that we take for granted in the U.S. I see examples of this all the time with illegal construction workers here in California. Since they are already in the country illegally, they have no insentive (or knowledge?) to follow OSHA saftey standards that a legitimate construction company would have to follow. If you can get away with the same thing with exported labor, exchanging a few lives for $$$ many companies are willing to do this.
So essentially, U.S. companies are deffering those costs by working overseas. I for one think companies should be punished financially in someway or guarantee the same worker rights in those foreign countries.
Another problem, and I think this is the biggest one, is the lack of national pride in the U.S. If the country you live in is say no more important to you then $200 off a plasma TV at Wal-Mart, what are you to care if jobs go overseas? I'm just saying that economically speaking, there is no added value in the tag "made in U.S.A." anymore since it is no longer associated with quality or pride with the average consumer. I suppose an employer sees their employees the same way now, looking at the individual and their qualities instead of "made in U.S.A.". However, if the U.S. does want to stay competitive it still must maintain self interest.
5. decimation can also mean: to cause great destruction or harm to
Re:In more trouble than most realize... (Score:4, Insightful)
I agree but it isn't just about cost. 30+ years ago "Made in the USA" meant quality. Does anyone see it that way today? Often people are willing to pay more for things produced overseas because of higher quality.
We only have ourselves to blame for that.
Re:In more trouble than most realize... (Score:5, Insightful)
You mentioned one possible solution for this problem: americans should buy products and sevices done by americans. But this is essentialy isolation from the rest of the world, if you want that to work properly, because you need to use just your resources. And also because you have to guard your R&D (if you are good enough, your R&D will be better than that of the rest of the world and you do not want cheap products based on your R&D but foreign cheap labor to tempt americans :) . Or, alternatively, if your R&D wont be better, you have to essentialy deny that the rest of the world exists otherwise americans wont buy "domestic but inferior" products.
So, IMO, such isolation wont work - it's something similar to what eastern block tried during Cold War or something which China has been doing for quite a long time and is now ceasing to do.
But what other choice other that isolation is there?
Well, openess.
But openess does not mean "we, americans, can do everything, all of you others can do nothing". So no barriers should be used to block others from access to american market.
But to maintain edge over others (in terms of economic production, standards of living, ...) is like maintaining a "water hill" in the lake - without walls you can to that to some extent only by perpetualy pumping water like fountain (or by manipulating gravity, but I want dwell into such things for now).
In such analogy, such pump should be something similar to what amaricans used in the past to get the edge: good R&D, freedom, ...
Of course, your wealth will always try to flow to poorer countries (because of market forces: cheeper labor, more thus cheaper natural resources, better location, ...) but you can view it also in good light:
So yes, maintaing the edge in free world trade is not easy. But it's same with everything else, whether you're trying to be better skier, better swimmer, better hunter, better mathematician, better painter - you have to work on that, not just sit there and claim you are better.
Same with me: for now I may be enjoying increase in business coming from the US and western Europe to midle-east Eurore but I know that if I go too far (asking too great price not backed by something appropriate: good quality, good performance, ...) my business will go elsewhere very soon - maybe even back the where it came from.
But that's reality (and openess about the reality).
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And herein lies the real problem. Someone wrote a letter to our paper a few days ago complaining about new toxic pollution laws (not CO2, this was stuff like mercury and things that are actually proven to kill people) complaining that the current laws are "already far too onerous" by requiring a level of pollution that would kill only one in a million people.
Yet people don't throw these guys in jail? If I ran around killing one in a mill
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From what I see in this forum and elsewhere, US workers are embittered, cynical and feel they're grossly underpaid, while foreign workers are not embittered, uncynical and are grateful to work for peanuts.
Someone tell me why I SHOULD hire a US worker or invest in the US with the above being true.
For ever job I could give a bitter and ungrateful US worker, I could give 10 jobs and materially improve people's lives in anothe
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"Have-Nots" who are given opportunuties tend to be positive. "Haves" who have opportunities taken away from them through no fault of their own tend to be negative.
I think you should hire the person who wil
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And this is the problem, countries like India and China can get away with horrible working conditions, lapses in saftey standards and employee rights that we take for granted in the U.S.
First: we are talking about IT workers, right? Safety standards are at best a minor issue. Americans get Carpal Tunnel Syndrome too.
Second: you are responding to a post that says that there is fierce competition for IT workers and therefore burgeoning salaries. These are not abused factory workers. They are PHP program
Re:In more trouble than most realize... (Score:5, Insightful)
What I fear is something called 'wage arbitrage.' Transnational corporations can go anywhere to take advantage of low cost labor, and skilled workers trapped behind national borders cannot follow. So wherever corporations have jobs, they can keep costs down by threatening to move workers overseas. Governments are desperate to keep these jobs, so they're happy to pass laws at the behest of the corporations, giving them tax breaks or making it illegal for workers to unionize.
So I really don't see it as "America is hurting, but India is turning into a technological superpower." If it were that simple, I'd probably just start looking into migrating. India's day in the sun will only last as long as they don't do anything stupid, like try and tax the corporations to pay for the education system that benefits them or improve the lot of the rural poor. The moment that happens, you'll see a massive shift away from India towards some more compliant country.
Of course, that will raise wages in Sierra Leone, or wherever the jobs move to. But not nearly as much as wages will fall in India, and again, corporations will pocket the difference. It's all a huge shell game designed to transfer as much of the wealth created by labor into the coffers of owners, while giving as little back as possible. Wage arbitrage gives capital a huge advantage in any negotiations with labor. But in the long run, this destroys the middle class, and erodes nations' abilities to invest in the health and education of their citizens, which are necessary for businesses to run successfully. So big business is reaping short term profits while undercutting both demand for their products and the ability of labor to create those products.
IOW, I'm happy to see India doing well, but I think it's part of a long-term trend that is going to hurt everyone.
re: no pride - Made in the USA tags (Score:4, Interesting)
The problem with that line of thought is, people run around trying to drum up support for things made in the U.S.A. with "peer pressure" vs. trying to ask the tough questions. (EG. WHY do people not particularly care if the Made in the U.S.A. tag is on their product or not?)
I saw this clearly with cars and trucks throughout the 80's and into the 90's. You had your union workers proudly driving around their Chevy, Ford or Dodge trucks with big bumper stickers slapped on them telling you to only buy U.S. made vehicles. Yet, most of the general public was reading publications like "Consumer Reports" before making such a big purchase, where they learned that every year, the most-reliable and best made vehicles were coming from Japan instead. So what do you do? Buy U.S.A. anyway and receive an inferior product (and by extension, continue to vote for inferior products with your dollars)?
I think "pride" in U.S. made products will only really come when we've earned it. This isn't going to happen as long as we're only concerned with selling "as cheap as China" either. We need to quit dumping our skilled jobs on other countries to save a buck in the short-term, and then wondering why people don't really like our products better than foreign ones!
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Now, when IT workers themselves are threatened by advances in communications techn
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In 18 years of working in a corporate environment, I've never seen this attitude. I always appreciated having a secretary for our department, having documentation specialists, etc., because some of those folks were far far better at what they did than we programmers were, and it was a sad day for most of us when those folks were le
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Incidently, I read something like for every dollar of work shipped out overseas, we get to see 1.30 in return. This is a well known
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I wish you would think more critically about the 'we' part. When a company offshores, the extra 30 cents is only seen by the owners and shareholders. The people who get laid off don't see that 30 cents. That 30 cents helps those who make their living off the interests of their investments, but the bast majority of Americans make their living from a paycheck.
I am glad that you are fortunate eno
Re:In more trouble than most realize... (Score:4, Informative)
If excessive taxation caused the middle class to shrink, Europe would have a small, rich, wealthy class, and throngs of poor people, and relatively unregulated, untaxed places like Africa and South America should have a burgeoning middle class.
But in fact the exact opposite is true. Places without regulation like South America have a wealthy, ruling class of a few, well-connected families. The other 95% of the population are living on the edge. It wasn't until I lived in South America that I saw homeless families -- mom, dad, and kids -- living on the streets. Until then, I had thought that a homeless person was just a crazy guy who heard voices and couldn't hold down a job.
So then in Europe, with high taxes, extensive regulation, and strong unions, we see the largest middle classes and the highest standards of living. So, the reality is the opposite of what your theory predicts. The states with the most regulation, highest taxes, and stongest unions are those with most highest per capita income and the highest standard of living.
Without government regulation, greedy wealthy people will exploit the average joe to maintain their wealth. There are good, honest rich people who want to treat people humanely and compete fairly in the marketplace. However, they are quickly outcompeted by rich people with no ethics, who have no problem bribing officials and having people killed to get what they want. You can't compete with a cheater when you are playing fairly. So what happens is that a kleptocracy arises -- the best cheaters rise to the top.
What government regulation does is keep the game fair, so that honest players have a chance at winning. It's not a perfect solution, but it is far better than the alternative.
Again, I with you would think more critically about these issues. As the slashdot sig goes, the plural of 'anecdote' is not 'data'. I am glad you and your friends are having a good experience with work, but your situation is not representative of reality for most Americans. You can't just look at what is immediately in front of you and think, "Things are going well for me; therefore, things are going well for all Americans."
Re:In more trouble than most realize... (Score:5, Funny)
Dude, you didn't need that disclaimer, your post looks like a powerpoint sheet: a nice bulleted list, it has manager all over it.
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Decimation... (Score:3, Interesting)
True enough, 90% would be a massacre.
I'd say that mostly you are right, but 'Adapt to survive and thrive.' is easy to say but for a lot of people it is hard to put into practice. Personally I don't have any trouble being a IT employment-nomad and moving every s
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Wrong attitude for businesses to take, seems to me -- competing on cost alone results in a race to the bottom, which is what we seem to be experiencing. I've worked with Indian teams, in person, and they are
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There are a number of cases of this to prove the point.
Walmart and cronies, and the people who shop there, are mainly to blame for a lot of this IMHO. They kept demanding lower and lower prices from manufacturers, which resulted in many of the manufacturers needing to cut costs. Slowly over the years manuf
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Your points are absolutely valid. As the economic favor hits India and other nations, they will experience the same costs increases that have been experienced in the US over the last 40 years only in a fraction of the time. This makes the cost of doing business overseas less attractive than the cost of doing it internally. This explosive growth can become problematic if the area doing the growth (industry/country/region) can't handle it.
As long as there is a computer located in the US, there will be a n
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I want to raise a counterpoint to your point 2: 2. Isolated protective measures to limit outsourcing will ultimately fail. If you put restrictions on US companies that increase their costs while overseas competitors have no such restrictions, US companies will be at a competitive disadvantage ultimately hurting their growth and their employees. I'm not sure I agree with this, although I think that protective measures
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Kind of, I mean, nobody's being killed...
I've always thought it was legitimate to use decimate when you're refering to removing a small, but not insignificant, fraction but doing so in a particularly harsh way. For example, "Our profits were decimated!" wouldn't work because a slight reduction in profits
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Once Indian tech companies realize that they can str
Need A Systems Engineer? Maybe I Can Help (Score:2)
Dig a well, Plant a Tree, Have a Son
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But you could (not that we do) put tariffs on the garments and steel that 'American' companies try to send back here from the nations they outsourced to. Thus if an American corporation decides
re: offshoring/outsourcing I.T. (Score:2)
Of course outsourcing/offshoring is not "new", and of course you can point to as many failures as successes with it. All of this completely dodges the point. As the original article clearly stated, the problem is, for every I.T. position that is sent overseas, we get nothing in return from the nation
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Forgot the best references, but wik
Re:In more trouble than most realize... (Score:5, Insightful)
What I *AM* seeing is a hell of a lot of chinese mainlanders being hired as engineers *IN THE US* depressing wages. Companies are starting to demand a LOT more for less money.
Outsourcing is based on a falicy which is that workers are fungible resources. Engineers are not fungible resources and any management that thinks they are has their heads way up their asses. The US *DOES* have a seriously bad management culture which is a far bigger threat than outsourcing IMHO.
Again, this is just one opinion from in the trenches here in southern california.
Re:In more trouble than most realize... (Score:5, Interesting)
A few years ago, I worked as a developer in a fairly large well-known tech company. The progression: Starting there, things were pretty good--well staffed, good morale, nice people to work with. The push for the "bottom line" started creeping in after a year or two on the job--secretaries got laid off, senior engineers got laid off, a website was set up for us to do our own expensing, travel, etc. It was hell. I, a well-trained software developer, getting paid pretty good money, was expected to deal with making travel arrangements, fighting with HR, etc. while my time was being billed to an engineering project. It isn't worth working for a company where my time and talent is simply not valued.
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And those buttons on the travel web sites are so hard to push for a "well-trained software developer".
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Re:In more trouble than most realize... (Score:5, Funny)
The MBA is the new Visual Basic certification.
-matthew
Comment removed (Score:5, Funny)
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I think you're on to something here.
From what I've seen of the management in big companies, the inability to speak clear english is an asset (I have yet to decipher what the hell a "paradigm shift" is). So outsourcing to another country where the locals don't speak english as their first language would be easy! All you have to do is sit them by a speakerphone and give them a binder containing all the latest buzzwords and impenetrable business-speak.
After all, it's
Re: plain english (Score:2)
:)
Way to go!
This "strange language thing" about big companies amazemes me too. But it's also same with my "native" field which is IT: it too is quite often full of buzzwords, but I suspect it is mainly just the "import" forced upon us by Sales&Management(R)(TM)(whatever).
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You might be right that you have only heard the horror stories or maybe you only remember the horror stories.
Re:In more trouble than most realize... (Score:4, Insightful)
Your reference there is flawed. Japanese cars aren't built by Japanese firms as a cost-saving exercise for American companies. They're built by successful Japanese firms, with excellent research and development who produce a product that's of high quality and is in demand around the world. Their success is driven by the skills of their own people.
Outsourcing is usually (always?) undertaken as a cost-saving exercise. The idea is that a US-based firm can produce the same product/service they're already producing, but at a lower cost to themselves. With this comes the inevitable quality issues, not to mention the fact that we're underpinning the foundation of the outsourced-nations' crappy treatment of their working population.
You might be right that you have only heard the horror stories or maybe you only remember the horror stories. Maybe outsourcing does lead to worse products all the time these days but as the education of India goes up they will be doing just as high quality of workmanship as we will.
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Managers are obselete... (Score:4, Insightful)
Now imagine a company with 100% engineers, which spend 5% of their time doing 'management' , it would
still work and turn out a product, see google and apple.
A smart engineer can learn in 6months how to be a manager, a manager though would take 10 years to be as good as an engineer.
After all there are no management 5 year degrees at unis are there.
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Oh, if only this was true. And I'm speaking as an engineer here, btw. I have encountered numerous examples of 'smart engineers' in management who have no clue what management entails, and no desire to learn. Of course there are clueless, MBA type managers out there too, but I have to laugh when I read comments like this.
Good managers are like good engineers. They are continuously
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Yes, and now look at some of the disastrously bad decisions made by the engineer-managers at Apple. Starting with refusing to license the Mac OS in 1985.
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Please just keep telling yourself this. Google currently has 100+ postings in the US for 'manager' positions -- product management, account management, project management. Surprisingly none of these positions have 'degree or certification in engineering' as a prerequisite. Oh, as Steve Jobs only has 1 semester of college education [wikipedia.org], i don't think he
Complete nonsense. (Score:3, Insightful)
Sometimes the same person have them both, but on many others it just does not happen.
The best way to create a bad manager is to force a good Engineer without the necessary skills to become one.
The assumption, very common around here, that Engineers are some kind of uber human that can learn anything thrown at them is laughable, to say the least (disclaimer: I am an Engineer and at time I have had managerial responsibilities)
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I am not sure whether majority of outsourcing projects fail. I know that a study by Frauenhoffer institute in germany showed that big group of offshoring companies (I think they analyzed the ones of 400 or more employees) came back to their original
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Let me guess...you're American, right?
Yes, it's a bigger threat to mankind than Marxism or militant Islam. Please allow me to make my point.
Militant Islam, it only stems from American interventionism in Arab countries and its blatant support of Israel. That's a subject I know very well, since I'm a muslim myself. I grew up in an Arab/Muslim country that's, like all other Arab countries (with the exception of Palestine and Lebanon), a dictatorship. There is no politic
RD Offsored Too. Everyone SOL. (Score:4, Interesting)
So, if we are supposed to rely on education, technology and research and development to keep our edge as a country, we are already in trouble, especially when one considers that even if we were to turn things around tomorrow, we have likely done enough damage that it will take a decade to recover.
Industrial recovery is not possible while we trade with non free China and your government/corporate masters have you screwed out for RD too.
GE, Microsoft and others have already started moving their research offshore. I'm talking about basic industrial research, like turbine design. "First World" Physics, no longer viable [theregister.co.uk], so forget it. Brains are cheaper, and theoretically free, in Russia and India. The situation is worse in China, where people really are not free.
Our trade was supposed to set the Chinese free, but it's working the other way around. It's just business, right? [slashdot.org], and China is just another big company. Not quite. Our big dumb companies might have you by the balls, read your email [theregister.com], and sell it all to big brother [essential.org], but they can't put you in jail yet. That will take another dissaster like NorthWoods [wikipedia.org] so that everyone is really paranoid and ready for rationing and a WW2 style command economy.
The only way out is lots of wealth creation to raise everyone's standard of living, but it's not happening. With all the mergers, wealth will continue to move to the already very rich owners of those companies. The mergers are the ultimate result of government favoritism of large companies. IT was supposed to be the poster child of new competition and robust US Performance. It has not happened because incumbent companies were allowed to crush new comers, so that "just enough" competition would be left. Now, we all sit under the M$ monopoly, two big media companies, two "broadband" companies, one electric company and a merged OPEC/ExxonMobileRoyalDoubleDutchFuck and wonder where the jobs are and why service sucks. If we can't help ourselves, we will never be able to help anyone else.
Eventually, this will get the rich too. A real depression is no fun for anyone, but those happen when wealth concentration reaches a critical level. When power is concentrated enough, the American Empire will go to war with China, kind of like the great Royal Fuck Festival that was the first World War.
Parent very insightful mod up (Score:2)
Re:RD Offsored Too. Everyone SOL. (Score:4, Insightful)
Really? Where do you get your definitions from? Because a "depression" or even a recession (a long term recession constitutes a depression) are not caused by anything like that. Oh wait, you're quoting John Maynard Keynes. Riiiight, I see. Is that what they're teaching in school now? That "hoarding" causes recessions? Good heavens.
When power is concentrated enough, the American Empire will go to war with China
Will it now. Just a quick exercise for you - try to calculate how much of the US economy depends on the Chinese economy. Then do the same calculation backwards. Now tell us about this "war". What are the justifications for it again? Why does it happen? When? How exactly? Please do elaborate. Unless you're just jumbling together "hot topic" words to get some karma like you always do...
M$ monopoly
Good old twitter. China is evil, "big dumb companies" are evil, "M$" is evil, Kermit the frog is evil and everything should be free. Same broken record but with impressive-sounding words and lotsa links. Karma every time.
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Well, doesn't it? Hoarding causes that money not to participate in the economy. At the same time, the money is still there, so the value of the money that does circulate stays the same. So, in effect, less value is participating in the economy. Isn't that a recession? I'm just asking; I'm not an economist.
``Will it now. Just a quick exercise for you - try to calculate how much of the US economy depends on the Chinese economy.
Re:RD Offsored Too. Everyone SOL. (Score:5, Informative)
If someone hoards a huge amount of money and keeps it out of circulation, then the market adjusts and starts to behave as if the money no longer exists, causing deflation, which is an increase in an individual dollar's purchasing power. Now, inflation and deflation are the opposite of each other, and both have their pros and cons.
Inflation is good at fighting unemployment, as the continual decrease in purchasing power is an effective way of circumventing minimum wage laws. E.g. if the minimum wage is 5 dollars per hour, and there was an inflation of 5% during the following year, then the real wage, i.e. the purchasing power of the 5 dollars have decreased by 5%. Thus employers are now effectively paying 5% less to their employees, even though the amount of dollars paid is the same, and this means that it now becomes profitable to employ people for less productive work, resulting in an decrease of unemployment.
The downside of inflation is the reduction in PP, and the higher demands on ROI. If inflation is 5% a particular year, and a company's profits grow only 3% that year, then the real profit of the company has decreased. This also works on a individual level, i.e. I have 5000$ today, wait a year, and then I have lost 5% of my wealth, even though the amount of dollars I have is unchanged. What this results in is that any investment that has a ROI that is less than inflation, is actually making you poorer. No need to wonder why stockholders/owners/investors demand ever-increasing profits from corporations, inflation is the culprit.
Deflation is pretty much the exact opposite. If there's a deflation of 5%, then even investments with a negative ROI are profitable as long as deflation is higher. This makes having money lying on a bank account a good investment, as you'll be able to buy more stuff with that money after a year.
Of course this also increases unemployment, at least unless the minimum wages are decreased at the same rate as deflation.
Another bad/good side of inflation/deflation (depending on if you have debt or have borrowed money to others) is that as the PP of a dollar increases, the real size of a debt also increases, which is bad for those who have debt. Again the opposite is true.
IANA(K)E, which could be seen as a good thing, depending on which school you follow.
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Wealth is always relative, and never absolute.
Thus, it's impossible for wealth to be created or for it to disappear in absolute terms. But what IS possible for a relative quantity? Aha, that's right -- concentration. Yes, in relative terms, wealth can concentrate. That's all it ever does. It either concentrates or diffuses, and it's never created or destroyed.
I'd maybe go deeper into it an
Re:RD Offsored Too. Everyone SOL. (Score:5, Interesting)
Hey, you're the first to mention the concept for which I was looking, so you get the reply:
This is correct, in my opinion. The big myth - which was not cited in the article - is that you can actually maintain an economy with high standard of living based on "high value" services alone. The key to an economy is really its ability to produce wealth - hard, physical, tangible goods that, as you said, actually raise the standard of living of that society's citizens. All the dentists and doctors in the world cannot help you if you don't have good tools, good infrastructure, or even good food.
I remember from one of my early economics classes that the only wealth-producing endeavours known are agriculture and manufacturing - the rest of economic activity just shuffles that wealth around.
If the economy of a country switches to being service-based, it is then a slave to the actual wealth-producing nations, because if the nations that have the wealth no longer need or want the services, with what is the service-based economy left? The reason the US economy used to be so robust is it had a good balance between service and wealth production. The shift away from producing wealth locally (I don't mean by ownership, I mean physically) is probably a greater risk than most are able to recognize.
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Lesson number 1: "wealth" is not the same thing as "value".
I would agree that the value that is placed on manufactured goods has been declining, but that does not mean that the wealth inherent to the manufactured goods is any less.
Put another way: The price of a house does not changes its square footage, ability to store things and protect from the environment, etc. The wealth of a house (sans damage or additions) is constant, regardless of the price (value) associated with that house. Yet another exam
Re:In more trouble than most realize... (Score:5, Interesting)
Move staff to china and live well, its modern (Score:2)
Pay for all moving costs and setup shop in Shanghai.
1) rent is 5x cheaper
2) taxes 10% max
3) everything is cheap
4) you can be paid $15000USD salary and live real well there.
5) profit.
Buy an apartment for peanuts in brand new towers, and enjoy. Its not like the sovient union, you can
still pretty much do anything as long as you dont piss of the govt.
There are plenty of english and americans and australians in Shanghai, its n
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I suppose the corollary is not true, as I don't see many IT jobs moving to Ohio. Of course (total) taxes here are a bit higher than 10%.
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Education costs too much, its socialist even. Its much cheaper to just lower minimum wage and health care requirements so businesses can hire more employees to make up for the lost productivity and focus. We need to find ways of keeping everyone busy, not find ways to automate us all out of jobs. What would we do with a planet full of college grads and no work for them to do? We'd starve, that's what.
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If you want a computer science degree so bad, consider matching it with something else as well. Mathematics, Chemistry, whatever. I don't care. Just be agile in your career. That is something that is tremendously important now that was not that so important previously.
Typical of analysts, bosses, etc. (Score:2, Interesting)
I am a CAD Drafter and at my old job our IT manager had it in his head that we would be faster with AutoCAD LT than regular AutoCAD. For those of you not familiar with Autocad, LT is an extremely crippled version of the software. There's no command line, no expandability with LISP routines, and no 3D. We kept telling him that switching to LT was
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Housing: The Engine of This Expansion [dailykos.com]