Outsourcing: giving the Third World a fighting chance

This image has nothing to do with outsourcing. The stuff beneath the image does.


{You can find plenty more pulp novel covers at these two excellent websites: Strange Sisters, Vintage Paperbacks.}

Now back to the outsourcing.

As for the zippies [ambitious young Indians with American skills used by outsourcers] who soak up certain U.S. or European jobs, they will become consumers, the global pie will grow, and ultimately we will all be better off. As long as America maintains its ability to do cutting-edge innovation, the long run should be fine. Saving money by outsourcing basic jobs to zippies, so we can invest in more high-end innovation, makes sense.

And what of China? Still piffling. Certainly, China competes with some labour-intensive American industries that have long been in decline, such as textiles and stuffed toys... Yet most Chinese imports are of consumer goods, competing with imports from other poor countries, whereas America's manufactures are chiefly capital goods ...

As for the Indian threat, “offshoring” is certainly having an effect on some white-collar jobs that have hitherto been safe from foreign competition ... the bulk of these exports will not be the high-flying jobs of IT consultants, but the mind-numbing functions of code-writing.

WRITING IN THE NEW YORK TIMES, VIRGINIA POSTREL looks at how small businesses, companies offering personal services and freelancers are overlooked in U.S. job counts. This is particulary relevant to the outsourcing debate because those are precisely the kinds of jobs that are very difficult to outsource:

"It is tempting, of course, to treat these undercounts as trivial. After all, what do 200,000 massage therapists or 300,000 manicurists matter in a country of 290 million people? But this list of occupations is hardly comprehensive. In every booming job category I looked at, official surveys were missing thousands of jobs. As the economy evolves, however, this bias against small enterprises and self-employment becomes more and more significant. By missing so many new sources of productivity, the undercounts distort our already distorted view of economic value -- the view that treats traditional manufacturing and management jobs as more legitimate, even more real, than craft professions or personal-service businesses."

What none of the commentators say: Some of us are in the Third World are really glad for the opportunity to eat at the economic table of the First World, and we believe it is fair that we are allowed to do so.

Thomas Friedman: Meet the Zippie
The Economist: The great hollowing-out myth
Virginia Postrel: A Prettier Jobs Picture?

UPDATE: Business Week has an interview with Netscape founder Marc Andreessen, "an unrepentant believer in entrepreneurial capitalism, [who] thinks new jobs and new industries will emerge in the U.S. that will more than fill the current jobs gap". The interview is here.


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