Art Clemons on Fri, 12 Sep 2003 21:00:42 -0400

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Re: [PLUG] Interesting Outsourcing Article... wrote:

Computer Science graduates should have no problem to the extent that they really are Computer Scientists and not simply programmers with fancy degrees.

India produces a lot of computer scientists, in fact it's quite good at producing people capable of performing at the same level as the better schools for CS claim to produce. It's one of the reasons that warm bodies for slots over here worked so well, and why outsourcing is more of a risk than you think.

... if we had fewer lawyers, we would have fewer jobs moving overseas.

In fact, in some ways outsourcing some jobs subjects a company to even more risk from lawyers. Also, lawyers don't get to decide when to downsize or when to seek foreign workers. Your prejudice against lawyers is showing.

The thing to remember about executives is that they are incapable of producing anything.
That is why they are executives.

From my perspective, the whole outsourcing thing is actually overblown. The problem really is that the Companies are gone, not the jobs.

If the companies were truly gone, there would be no need for outsourcing, there is a market in the US for the skills being outsourced, but the marginal value of the workers presently favors outsourcing. The jobless recovery may soon convince Amercans otherwise but that's in the future.

Outsourcing really can make a big difference at a large firm, but its impact at a small or medium size firm is far less clear. There you have more of a situation where the "solutions" (I hate that word) being offered are what the business is after, not payroll reduction.

Payroll reduction is still a goal, it's a good part of why outsourcing occurs. First for some companies with allegedly independent contractors and now foreign outsourcing. A company has to already have some idea of what it needs done before it can outsource, which means the company in question has to have a market for what it sells too.

What is missing today are American Body Shops to offer alternative "solutions."

We saw a HUGE number of companies vanish at the end of the 90s... not "just jobs." The end result was that a huge pool of competent and even qualified bodies was dumped into the market. A lot of those bodies were in fact Green cards or H1bs ... who went home, and stared their own companies.

Most of the former Green Cards and H1B's are indeed working overseas now, but they're a small percentage of the outsourced employees. They may well have made it obvious that cheaper employees were available but most of them don't have the capital or contacts to set up outsourcing.

They could not have done that in 1990. And in fact, they did not. It wasn't until the "glut" of communications created by Global Crossing, MCI, and the other telecoms provided the infrastructure which made those companies able to compete.

There is no real glut, there is instead a collection of relatively under-utilized communications channels, that's a side effect though, after all, much of what is done could be done with 2.4Kbaud phone lines if real time pictures aren't needed.

Remember, historically, something short of 10% of the American labor force worked for Large Companies.

So, the question to be asking is not -- Where are the jobs? Rather ask, Where are the companies?

Most of the companies that downsized still exist, some still have independent contractors who are in many cases doing the same jobs for the same companies that they were doing before being downsized, or said companies have outsourced their work or hired foreign workers in places like Ireland and India.

There is a LOT of Venture Capital around today. But it now expects a company to actually be capable of making money... not just looking for the next sucker at the IPO.

There's a lot of venture capital because there is almost no need for venture capital. Venture capital gets a high rate of return when it does precisely because it's a risky venture. If there were surefire means of making a high rate of return, the money would flock, reducing the money venture capitalists could gather.

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