Tuesday, July 22, 2003
IT's all about location, location, location!
By now, perhaps everyone has read the Economist report on the new geography of the IT industry. As always, the Economist comes up with a fabulous analysis and discusses the effects changing geography has on the IT industry itself.
At the same time, large parts of the business are migrating offshore, mainly to India, but also to such places as China, Russia and Vietnam. This is already being likened to what happened to manufacturing in the 1970s and 1980s, when companies in the rich world moved many of their operations overseas. The IT industry is now developing something that it has not had before (except in hardware manufacturing): a fully operational, international supply chain.
Of particular interest to me is what happens in the U.S. economy when white-collar jobs start to migrate abroad in greater numbers, especially since white-collar workers within the U.S. tend to have more political clout than their blue-collar counterparts, whose jobs began to migrate to East Asia in the late 70's and late 80's. Will the white-collar use their clout to curb the outsourcing of jobs (something that could be in direct violation of WTO norms) or will the U.S. go through yet another wave of innovation, like the one that threw up the IT-centric service industry in the wake of manufacturing jobs moving en-masse to Asia?
How much of the IT industry will move offshore, and how many IT jobs in America and Europe will disappear? In the United States there is already a political backlash, of sorts. Lawmakers are pushing to tighten visa regulations, so that foreign IT firms can no longer send their employees to customers for training. And several state legislatures have bills pending that would stop government agencies sending IT and other services work overseas.
Yet the best hope for a comeback is for the Valley to ride what many expect to be the next big wave of innovation after the internet: the convergence of bio-, info- and nano-technologies. Each holds much promise in its own right, but together they could give rise to many new kinds of products.
The outsourcing of white-collar jobs, meanwhile, has been attracting a lot of media of attention. Here's a story that appeared in the New York Times today.
At the same time, large parts of the business are migrating offshore, mainly to India, but also to such places as China, Russia and Vietnam. This is already being likened to what happened to manufacturing in the 1970s and 1980s, when companies in the rich world moved many of their operations overseas. The IT industry is now developing something that it has not had before (except in hardware manufacturing): a fully operational, international supply chain.
Of particular interest to me is what happens in the U.S. economy when white-collar jobs start to migrate abroad in greater numbers, especially since white-collar workers within the U.S. tend to have more political clout than their blue-collar counterparts, whose jobs began to migrate to East Asia in the late 70's and late 80's. Will the white-collar use their clout to curb the outsourcing of jobs (something that could be in direct violation of WTO norms) or will the U.S. go through yet another wave of innovation, like the one that threw up the IT-centric service industry in the wake of manufacturing jobs moving en-masse to Asia?
How much of the IT industry will move offshore, and how many IT jobs in America and Europe will disappear? In the United States there is already a political backlash, of sorts. Lawmakers are pushing to tighten visa regulations, so that foreign IT firms can no longer send their employees to customers for training. And several state legislatures have bills pending that would stop government agencies sending IT and other services work overseas.
Yet the best hope for a comeback is for the Valley to ride what many expect to be the next big wave of innovation after the internet: the convergence of bio-, info- and nano-technologies. Each holds much promise in its own right, but together they could give rise to many new kinds of products.
The outsourcing of white-collar jobs, meanwhile, has been attracting a lot of media of attention. Here's a story that appeared in the New York Times today.
