Greenspan: Be careful of knee-jerk reactions to outsourcing

I don’t so much mind being old as being fat and old.Benjamin Franklin

Dear Vorticians,

Benny boy, you hit the nail on the head. Old and fat is no way to go.

Worse, there’s now little recourse for us aging mesomorphs with expanding midsections. (Well, other than actually eating wisely and exercising). Congress, in its wisdom, has seen fit to bar lawsuits against those darn restaurants and food manufacturers whose powerful and evil marketing impels us to cram those Wendy’s Classic Triple cheeseburgers and Starbucks Venti white chocolate mocha espressos down our gullets. (For your consumer knowledge, that Wendy’s creation offers an eye-popping 940 calories and 56 grams of delicious fat. But equally impressive is that the Starbucks beverage weighs in at a palate-pleasing 630 calories and 29 grams of fat. Enjoy!)

Congress hasn’t seen fit to craft, say, a national broadband policy or get health care to everyone in the country, but Ronald McDonald and Aunt Jemima are safe from predatory litigants. Look what those suit-happy types did to the tobacco industry, after all.

Well, it hasn’t all been carbs and trans-fatty acids on Capitol Hill this week. More to our recent discussion, Fed Chairman Alan Greenspan spoke before our elected leaders to warn them against protectionism and knee-jerk reactions to the issue of outsourcing, which we’ve been discussing for a few weeks now.

“As history clearly shows, our economy is best served by full and vigorous engagement in the global economy,” said Greenspan, per a “CNN Money” piece that also quoted him as saying that “new protectionist measures” could backfire. “These alleged cures could make matters worse rather than better,” he said. “They would do little to create jobs and if foreigners were to retaliate, we would surely lose jobs.”

Last week, I promised to share two other views on outsourcing of high-tech jobs — one by a reader, who asked not to be named, from India, and another from a U.S. IT worker.

First, our Vortician on the other side of the world.

“John, (I want to share my views) as one of those ‘Evil Indian programmers’ stealing jobs from the West. First, please understand that this is an intense discussion both within the Indian IT community as well the Americans we work with. I work for a multinational that came to India way back in 1995. I am a software manager who is responsible for various products and components that my organization sells worldwide. I run teams here in Bangalore.

“In the last four years, I have had four products transitioned to me and have transitioned one back. As a result of the road map for one of those components that we defined here in Bangalore, a fresh team has formed in the U.S.  I am currently working with some architects in the U.S. and if we get our tune right, there will be at least four to five more teams kicking off — both in Bangalore and the U.S. That’s the kind of outsourcing I like.

“Historically, we Indians have been an inclusive culture. We absorb and are good at working together. As a friend put it, ‘We (Americans and Indians) have two choices ahead of us — either we fight each other for the same piece of pie or we join hands and create a much, much larger pie: the world.’ As Indians, we strongly believe in the second choice. And I believe that is possible because — despite the clash — I see both cultures having complementary, rather than clashing, skills. For example, we are good back-room guys while you are much better front-enders compared to us.

“As they say in Kannada (the local lingo in Bangalore): Swalpa ajust maadi — or, please adjust (to the situation) a bit.

“The story is all about integration.  The world is integrating faster than we can imagine.  Yesterday was yours, today it’s our turn and tomorrow it will be someone else’s turn (Africa?). Tomorrow we will be at the receiving end. Yes, I feel bad for the folks impacted.  I am doing something about it in my own way by creating more jobs in the U.S. What is not very well known is that a lot of us are.”

Thanks, Vortician X (you know who you are.)

Weeks ago, when I first began discussing the new IT landscape and a concept I labeled “The New Data Center,” I got this note from Vortician Jeff Moore: “John, I’m concerned that you’re promoting a concept that will lead to further erosion of IT jobs to outsourcing in foreign countries.

“As a network specialist with over 15 years of experience, I am already feeling the trend for companies to outsource their IT department staff to foreign countries. I’ve personally been unemployed for nearly two years now. At every job interview I’ve gone on, there have been 40 to 50 applicants almost all as qualified as I am, if not more so. To some extent this may be a reflection of the state I live in (Oregon) as well as the local community (Bend), but I haven’t been able to pick up a trade publication in the last year or two without reading about the migration of IT jobs overseas. I’m also aware of the significant cutbacks in IT jobs as a result of the economic downturn and the dot-com fallout. However, your position, as well as others in the tech media, has done nothing to improve this situation. 

“In my opinion, you do a terrible injustice to American information technology workers when you promote concepts that lead to further loss of U.S. jobs. The saying ‘If you’re not part of the solution, then you’re part of the problem’ comes to mind.  As a leading figure in technology media, what have you done to help reverse the trend to outsource IT jobs?  Perhaps you’ll realize what you’ve helped to do when the leading tech publications all sport bylines from India and China.”

My argument to Jeff was that many of trends outlined in “The New Data Center” would reduce the cost of computing — a huge issue for corporations — and, as a result, take some of the pressure off to outsource. But he didn’t buy it. Here’s his response.

“John, my concerns are being played out in the media even as we write. IBM is moving 5,000 positions offshore. This is a trend that could have profoundly bad effects upon our country and in my opinion the media is doing nothing to counteract it. 

“Although your white paper doesn’t specifically promote offshore outsourcing, it does point out the ‘cost savings’ that can be obtained by the virtualization of the data center. The most obvious IT cost is staff (other than equipment) and when the equipment is more efficient and requires less attention by IT staff, shortsighted management (and when are they not!) will achieve significant cost savings by reducing the staffing levels. Coupled with offshore outsourcing, I don’t see a very positive trend for IT staffing in the U.S.

“By its very definition autonomic computing encourages the reduction of IT staff. To quote the definition: ‘The theory is that the more components can manage themselves, the less the burden that falls on IT staff.’ By reducing the burden on IT staff, management will be moved to reduce IT staff in general.  Although this is not the same as outsourcing IT staff offshore, the result to the U.S. IT workers is basically the same — they’re out of their jobs. The distinction between staff reduction and offshore outsourcing won’t matter to them when they are trying to feed their families and keep a roof over their heads.

“Management will do whatever it can to improve ROI even at the expense of the stability of our country.  The evaporation of our steel industry is a prime example of what the results can be.  Educating our workforce does no good if (workers) can’t get hired by domestic companies. Until the inflated cost of living in this country comes down significantly (and inflated wages with it), I suspect that this trend and trends similar to it will continue. I liked your paper, but I still have to stand by my earlier concerns. Thanks for the interesting discourse. I look forward to seeing more of this play out in the future.”

Thank you, Vortician Moore. And seeing more of this interesting discourse play out is my goal. Vorticians of all stripes are encouraged to play out their thoughts by sending them to me at jgallant@vortex.net.

That’s all for now. Bye.