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Anything We Can Do ...
They Can Do Cheaper

[Written in April 2003 for the May/June issue of The Voyageur. Copyright © 2003 Peter de Jager.]

"The Internet ignores both political and geographic boundaries!" To anyone with even a minimal level of technical expertise, this statement is nothing more than a grade-level observation. Yet if you use it as a lens to examine the future, it offers a few interesting implications, especially if you have a minimal level of technical experience and are living outside of what we refer to as the Third World.

As a writer with regular columns in computer magazines for the past decade, I receive many e-mails requesting my view of trends in IT employment opportunities. I repeatedly get asked, by people who should have the answer within their reach, if the current downturn in North American IT opportunities will end...and when.

The reasons for the downturn are many: a recession, an oversupply of capability, a recent house-cleaning in most IT shops worldwide, the trend to outsourcing, and—the real threat—the rise of offshore services in the white-collar arena.

Will the downturn end? Look back to the opening line of this article: "The Internet is ignorant of both political and geographic boundaries!" Now add: The cost of living in Third World countries is significantly less than it is here in North America and Europe.

This results in the following prediction: IT employment opportunities for particular skill sets will continue to plummet. There will be no turnaround. Technology is the great equalizer. Just as heat travels from hotter to colder, and a high-pressure zone will equalize with a low-pressure zone if given the chance, by eliminating geographic boundaries, telecommunications allows "work" to seek out the most hospitable climate.

The "work" affected is not restricted to application development. It includes data entry, call centres, back-office operations, document imaging, etc.

One response to this is, "We'll do it better! We'll be more efficient! We'll use technology!" The counter-strategy is, "Anything you can do, we can do cheaper...because our standard of living is lower." Another response is to attempt to legislate a solution, which only serves to create a black market of opportunity.

There is no new force at work here. We've seen this happen before. People from China were shipped into North America to build the great railroads because they were cheaper than local labour. This time we're shipping out the work instead of shipping in the people. Exactly the same concept; just implemented differently.

The world is filled with economic inequalities. There are the haves and the have-nots; the First World and the Third World. With the stated goal of working towards some sort of economic balance, we go to great lengths to provide loans to developing companies, and according to many, these loans do little to redress the balance. Meanwhile the global telecommunications network, part of which we know as the Internet, is becoming the unexpected solution.

Of course, there isn't any solution that isn't seen by some as a new and threatening problem. If you're someone in North America who is losing, or has already lost, their job to a programmer in India, then you'll have an understandably different view of this trend. From your perspective, you're losing your livelihood to an outsider, to someone who doesn't even live in your country.

There are many who argue that offshore outsourcing is unpatriotic, that work generated in (insert country of your choice) should remain in that country. That argument, while compelling at various levels, ignores economic reality. While there are many who only "buy" products made in their own country, there are very few who would support a boycott of sales to ALL other countries. MS Windows was developed in the US. Should Microsoft stop selling it to other countries because it has put their programmers out of work?

The first law of economic entropy: Work flows from higher to lower standards of living. The Internet facilitates this process.


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