Monday, December 08, 2003
Moore's Law for Wetware?
Edward Hugh, of Bonobo Land and Marcelo Rinesi have written an interesting article in the Straits Times in which they wonder whether a version of Moore's Law applies to brain power, especially as cheap communications technologies reduces transaction costs across the board. The conclusions they draw have real implications in understanding the trade debate.
But the 'new new economy' way - one that recognises that well-educated human minds are as much of a commodity as any standards-compatible central processing unit - involves software written by bright maverick programmers (maybe tucked away in an East European 'transitional economy'), the incredibly cheap communication infrastructure of the Internet, and literal warehouses of Indian mechanical-mental workers typing away for what to us may appear as bargain basement wages (but which are still more than they could otherwise earn).
This is how individual ingenuity, cheap technology and cheap intellectual labour defeat corporate R&D and expensive technology. Any American company that insists on playing by the old new rules, using a top cadre of shut-in experts, geographically centralised operations and sub-planetary mindsets, will find itself outflanked, outsmarted and eventually outstripped by a few guys with the right network.
Politicians and losing businessmen call it 'unfair competition', while the businessmen that are making money out of it prefer the expression 'emerging outsourcing platforms'. We see it simply as an extension of Moore's Law to human beings, which can be put simply like this: The knowledge, expertise and ingenuity that you can rent for US$10,000 (S$17,300), or US$1,000, a year is rising exponentially.
OF COURSE, this is somewhat of a misuse of words, as human insight can't be quantified. But let's put it this way: The cost of hiring a certified public accountant, MBA or PhD holder, programmer or technical support technician is falling faster with each passing year. If your human resource department isn't taking this into account, if your management is planning to compete five years from now with a 'corporate IQ' of the same order of magnitude as the one it currently boasts, then they aren't simply failing to prepare for the future, they are grotesquely blind to the realities of the lived present. It's a reality that won't go away any time soon, or just because you file a couple of anti-dumping claims.
In the end, everything here boils down to the laws of supply and demand. The current, ongoing impact of the Internet seems to reside in the fact that it has spawned a global mental labour force of hundreds of millions, with high and rapidly rising educational standards (in everything from English language skills to advanced research) and lower wages than in the developed countries.
But the 'new new economy' way - one that recognises that well-educated human minds are as much of a commodity as any standards-compatible central processing unit - involves software written by bright maverick programmers (maybe tucked away in an East European 'transitional economy'), the incredibly cheap communication infrastructure of the Internet, and literal warehouses of Indian mechanical-mental workers typing away for what to us may appear as bargain basement wages (but which are still more than they could otherwise earn).
This is how individual ingenuity, cheap technology and cheap intellectual labour defeat corporate R&D and expensive technology. Any American company that insists on playing by the old new rules, using a top cadre of shut-in experts, geographically centralised operations and sub-planetary mindsets, will find itself outflanked, outsmarted and eventually outstripped by a few guys with the right network.
Politicians and losing businessmen call it 'unfair competition', while the businessmen that are making money out of it prefer the expression 'emerging outsourcing platforms'. We see it simply as an extension of Moore's Law to human beings, which can be put simply like this: The knowledge, expertise and ingenuity that you can rent for US$10,000 (S$17,300), or US$1,000, a year is rising exponentially.
OF COURSE, this is somewhat of a misuse of words, as human insight can't be quantified. But let's put it this way: The cost of hiring a certified public accountant, MBA or PhD holder, programmer or technical support technician is falling faster with each passing year. If your human resource department isn't taking this into account, if your management is planning to compete five years from now with a 'corporate IQ' of the same order of magnitude as the one it currently boasts, then they aren't simply failing to prepare for the future, they are grotesquely blind to the realities of the lived present. It's a reality that won't go away any time soon, or just because you file a couple of anti-dumping claims.
In the end, everything here boils down to the laws of supply and demand. The current, ongoing impact of the Internet seems to reside in the fact that it has spawned a global mental labour force of hundreds of millions, with high and rapidly rising educational standards (in everything from English language skills to advanced research) and lower wages than in the developed countries.
