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How to Deal with IT Outsourcing? Fulfill Society's Unmet Needs

How to Deal with IT Outsourcing? Fulfill Society's Unmet Needs

The whole point of my recent series of editorials has been to get people thinking about what has happened to the job market for IT developers and administrators - and where it is going next. Over the past two months I have written about what I have witnessed at countless dot coms and development companies around the country and where I see the IT work market going.

I've made some people angry. Some of them have even called me names or said I am out of touch, but others have agreed with me. I know that some of my examples went to the extreme, but that was the whole point; the current situation with offshore outsourcing has gone to the extreme. The entire market is now swinging to a new extreme of sending work outside of the country. This is not a good thing.

The reality of human behavior is that people tend to move in very distinct patterns, with large, seemly disassociated groups thinking that what they are doing and thinking is unique - when in reality their behaviors and thoughts are commonly held beliefs and attitudes that are part of mass movements.

Currently we have a classic labor-versus-management conflict bubbling up with a very special twist. Business in its most simple terms is a three-legged stool composed of labor, capital, and management. No business can exist without the three components.

Labor, when applied with no thought or direction, is of little or no value. All one ends up with is, at best, subsistence living and basic survival.

Capital is a very tricky concept for most people because they mistakenly think that capital has power. Nothing could be further from the truth. Capital has no kinetic energy; it possesses only potential energy. It can be transformed to kinetic energy only by the application of labor.

Management applied intelligently to labor and capital - with a unifying direction toward a specific goal - is what drives profits (or losses, depending on how well the labor and management have fulfilled society's unmet needs with their collective outputs). The winners are showered with profits and an increased standard of living, and the losers experience the reverse effect.

When the United States started shedding factory jobs in the 1960s no one seemed to care, except of course the factory workers who where thrown out of work permanently. This time I am not using an extreme example. Think about it for a moment: Do you drive a car or watch a television made in the United States? You probably don't own an American-made car, as I don't know even one code writer or system administrator who does. As far as televisions go, there hasn't been a mass-produced television made in the United States in over 30 years. Do you eat the All-American hamburger? Did you know that the United States has become the world's largest importer of beef?

It's getting pretty hard to find anyone in this country who drives a Chevy and watches an old black-and-white television while eating some Kansas-raised beef.

The reason nobody ever cared is that these seemly low-paying jobs were being replaced by much higher-paying replacement jobs. They told us it was good for the economy and that knowledge-based jobs in the service sector were the road to independence and a standard of living that could only go up.

Guess what? They were wrong. Nobody ever anticipated third-world countries coming into the U.S. economy and taking high-paying jobs from college-educated Americans. This phenomenon is the single largest unintentional consequence of the rise of the Internet. It seems that the new replacement jobs are only lower-paying, downward-mobility jobs.

A national debate is brewing, but don't look to your favorite politicians for the answer. You know more about what's going on than they do.

Information technology is here to stay and will continue to embed itself into our society. The only answer is innovation and the development of new products through the use of technology to fulfill unmet human needs.

More Stories By Jacques Martin

Jack Martin, editor-in-chief of WebSphere Journal, is cofounder and CEO of Simplex Knowledge Company (publisher of Sarbanes-Oxley Compliance Journal, an Internet software boutique specializing in WebSphere development. Simplex developed the first remote video transmission system designed specifically for childcare centers, which received worldwide media attention, and the world's first diagnostic quality ultrasound broadcast system. Jack is co-author of Understanding WebSphere, from Prentice Hall.

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Most Recent Comments
Todd Canipe 01/28/04 01:19:29 AM EST

I'm an american Vetran of twenty-years of military service to my country. I went to school while serving my country to get an education knowing that I would need it to fall back on once I retired. My family has put up with the burden of all these things all the while not complaining or showing any disgruntlement. So, please forgive me if I say that although I understand why IT Services Companies want to move to off-shore resourcing as it is only a portion of global economization and labor is cheaper. So, go ahead.. And while you're at it, please move the Company out of the US, so that the little-guys you leave behind and out of work, can become your competitors for business.. Don't think it could happen? Think again... Farina... Americans can still innovate and produce quality deliverables and services -- on-time -- below budget -- better than anybody else.. I know, because that's what I do everyday.. So bite me!

Yogesh Kant Roy 01/24/04 01:38:51 PM EST

It is not offshore outsourcing that has gone to the extreme, but its the reaction and job insecurity that has gone to the extreme. We need to temper this, US will loose credibility of being a global ecomony, and can no longer ask other countries to open up their markets. The phenomenal growth of US over the last 50 years could not have been achieved without free markets of the capitalistic society, and future growth cannot be achieved without continuing on the path of free trade.

After all the hype surrounding offshore call center outsourcing during 2003, and concerns of jobs moving overseas, a new Datamonitor report predicts that only 5% of agent positions worldwide will be located offshore by 2007. While there is clearly a threat to domestic jobs, the extent of the threat may not be as big as the media is making it out to be.

According to Datamonitor, 241,100 agent positions will be located offshore in 2007. That number represents 5% of the total global call center market, which will have grown to 4.78 million agent positions by 2007.

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