• United States
by Steve Taylor and Larry Hettick

Savings vs. jobs

Oct 08, 20032 mins

* Convergence can result in fewer jobs, or jobs shipped overseas

Our economy, like it or not, is a global economy. We believe that to remain competitive globally, companies must take advantage of technology and skilled international labor.

For example, the technical support for the Dell computer this article was written on is handled in India; the computer was made in Malaysia. The foreign manufacturing and support is something that makes Dell more competitive. And a less expensive computer contributes to a “free to our readers” newsletter, enabling no-cost/low-cost information.

Can a company charge more for its products to avoid sending jobs offshore? We think not. If voice over IP allows cost-effective global communications – including an offshore call center – companies have the option of taking advantage of the cost savings. This may be a necessity to compete effectively, passing on lower prices to customers and increased profits to shareholders.

Take also the IP PBX, which reduces the cost of moves, adds and changes. The reality is that these reduced costs can be realized in terms of jobs taken away or people redeployed. Should a company forego the cost-savings opportunity in order to save jobs? The reality is that companies are in business to maximize shareholder value, and not to create jobs.

Painful as the reality is, we believe that the enterprise must take advantage of the cost savings and productivity benefits afforded by advances in convergence. If they don’t take advantage, then rest assured the competition will. And in the long run, the non-competitive enterprise will surely go out of business.

Just as the nuclear genie got out of the bottle a half-century ago, the telecom genie is out of the bottle now. There’s no going back. Instead, we have to restructure our basic economies to take advantage of these advances and to make sure that the people who served us so well in the industrial age have a place in the information age as well.

While we’re on the controversy path, next week we’ll talk about taxes.