Losing Our Edge?

An Indian software company is currently swarming through one of our recent acquisitions and taking ownership of every piece of software. Development goes to India, support stays in the US.

I've been impressed with their abilites. During this system appreciation phase, they have 25 people painstakingly documenting every business process and line of code. Each of those people costs us about 20K/yr plus living expenses. After the software is taken off shore, we have hundreds of programmers available to us in India at 15K/yr.

I can't remember the last time I saw an American work as hard (for 4-5 times the pay).
 
Maybe this company you're speaking of, because of it's lousy management style, cannot motivate it's american employees, so the good ones have quit, leaving said company with leftovers that cannot be employed anywhere else.

Therefore, the only thing that it can do in order to turn a profit, is move to a third world country and 'employ' people that can either put up with it, or eat dirt in the backwaters of Bangalore.

Just an idea, may not apply to you.
 
Quote from nkhoi:

don't worry Steve Jobs, Bill Gate are made is USA and so is Mr. Craig.
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NOt necessarily anymore. IF more American students stop enrolling in science & engineering programs because they think," what's the poing? My job will be outsourced anyways. I might as well get on American Idols or be a daytrader(*grin*), then where will the future steve jobs and bill gates come from??"

Don't be so lax here. Sure, we have the best of everything in the world now. But it might not be for long if others are willing to work hard and get it and perhaps even surpass us one day if our current generation of kids stop trying.

Innovations can come from anywhere. Once China and India's standard of livings rise, they took will have time and $ to tinker with new ideas and stuff.

watch out!
 
Well economically I should point out one thing.. every time a company hires an Indian/Chinese programming firm and gets value (as in higher output for lower cost), that *does* have many advantages. Yes, the programmers are hurt in the US. However, offsetting that are that productivity increases as the companies get lower input costs. This is passed to consumers ultimately. Computer programmers are involved in the back-offices of just about every industry: food.. medicine, even the housing sector if you look at erealty.com, etc. And when the input costs drop, that means as a whole, consumers can buy things at lower prices which is a good thing.

So just wanted to make that *little* point, since 99% of what you read in newspapers or what people talk about is the lost jobs, and they don't talk about the other side of the coin which increases the non-programmers' standard of living.

In addition, a lot of programmers here are unqualified and were just hired because of the NASDAQ bubble / venture capital bubble.. a typical supply side shortage. Probably these marginally skilled programmers will get weeded out over then next 5 years and what is left will be the creme of the crop making good wages.

I work as a Senior Programmer myself for a company in Los Angeles. We use an Indian outsourcing company for some grunt-work programming. But we are still hiring locally as well for some positions. There is one position I've been trying to fill for 6 months now.. just too many subprime candidates.. courtesy the NASDAQ bubble unfortunately.

Regarding the politics of the situation, I think the original NYT article has some valid points as well as some invalid points.

I think he is correct to say we are losing a competitive edge, and this is caused due to a lazy-entitlement-based culture, low-quality K-12 education, and a relatively punitive tax system. I disagree that Kerry (or Bush) have answers to this.

I think we should:
1) address the school system with fundamental changes: either switch to a purely privatized education system or a voucher system, eliminate all public schools.

2) Regarding taxes: reform our tax system: eliminate all taxes and replace them with a national property tax and national sales tax. Those are the most efficient taxes economically. Capital gains, income taxes, dividend taxes, estate taxes, corporate taxes, etc. are inefficient.

Those are major changes, but they would address some of these long-term problems.

-Taric
 
i agree on most things you said regarding outsourcing. lower cost = lower prices. walmart is the best example of low cost at work.

i don't think the education system is to blame results in low quality of education. parents in the united states are not on top of their children education. i think the most of the blame should be put on the kids. they are just lazy period. watch too many episodes of MTV cribs and pimp my ride. day dream too much about what *should* happen to them, but not think about what they can do about it. how many times do you hear people say they *deserve* something. after graduation college a kid *deserves* a job. its like an entitlement program. where did they get that idea?


a note on the taxation: the government needs a continous stream of income. i can see a raies in taxes to pay back to national debt then to have further tax cuts. united states citizens enjoy the lowest income taxes amongst all the develop nations. most european countries tax more than 50% of personal income. i think this will stop very soon when the line of credit is tighten around the belts of congress. we'll have a nice tax increase.


that's my 2cents

any thoughts?



Quote from ptunic:

Well economically I should point out one thing.. every time a company hires an Indian/Chinese programming firm and gets value (as in higher output for lower cost), that *does* have many advantages. Yes, the programmers are hurt in the US. However, offsetting that are that productivity increases as the companies get lower input costs. This is passed to consumers ultimately. Computer programmers are involved in the back-offices of just about every industry: food.. medicine, even the housing sector if you look at erealty.com, etc. And when the input costs drop, that means as a whole, consumers can buy things at lower prices which is a good thing.

So just wanted to make that *little* point, since 99% of what you read in newspapers or what people talk about is the lost jobs, and they don't talk about the other side of the coin which increases the non-programmers' standard of living.

In addition, a lot of programmers here are unqualified and were just hired because of the NASDAQ bubble / venture capital bubble.. a typical supply side shortage. Probably these marginally skilled programmers will get weeded out over then next 5 years and what is left will be the creme of the crop making good wages.

I work as a Senior Programmer myself for a company in Los Angeles. We use an Indian outsourcing company for some grunt-work programming. But we are still hiring locally as well for some positions. There is one position I've been trying to fill for 6 months now.. just too many subprime candidates.. courtesy the NASDAQ bubble unfortunately.

Regarding the politics of the situation, I think the original NYT article has some valid points as well as some invalid points.

I think he is correct to say we are losing a competitive edge, and this is caused due to a lazy-entitlement-based culture, low-quality K-12 education, and a relatively punitive tax system. I disagree that Kerry (or Bush) have answers to this.

I think we should:
1) address the school system with fundamental changes: either switch to a purely privatized education system or a voucher system, eliminate all public schools.

2) Regarding taxes: reform our tax system: eliminate all taxes and replace them with a national property tax and national sales tax. Those are the most efficient taxes economically. Capital gains, income taxes, dividend taxes, estate taxes, corporate taxes, etc. are inefficient.

Those are major changes, but they would address some of these long-term problems.

-Taric
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Quote from TraderC:

This nation should be put on trial in an international court for committing mass atrocities and war crimes --

http://www.nytimes.com/2004/05/13/politics/13IMAG.html

Our Senators want to hide the crimes of America from the rest of the world. That's what the Nazis would do.

We will lose our edge in the world big time after this war.
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Hopefully, the damage will be contained.:(

Thu May 13, 2004 07:00 AM ET
By Charles Aldinger

BAGHDAD (Reuters) - Defense Secretary Donald Rumsfeld flew in to Baghdad on Thursday on a surprise visit as the United States struggles to quell outrage over the torture of prisoners that is sapping its credibility in Iraq.

Hours after U.S. lawmakers viewed "sadistic" new photographs of U.S. troops torturing Iraqis, the embattled secretary and Washington's top general arrived at Baghdad Airport. It was not clear if he would visit the nearby Abu Ghraib prison itself.

General Richard Myers, the chairman of the Joint Chiefs of Staff: "We absolutely have the high moral ground" in Iraq.

Once notorious as Saddam Hussein's torture chamber, the prison has become a symbol of the United States' failure to win over many Iraqis despite ridding them of Saddam a year ago. With just seven weeks to go until Washington hands sovereignty back to an Iraqi government, that is a serious problem for Rumsfeld.

He denied on the secret, 15-hour flight from Washington that the Pentagon was trying to cover up the scandal, which emerged when proceedings were opened in January against seven military police, who have now been charged, but exploded into a global issue with the release of soldiers' photographs two weeks ago.

"If anybody thinks that I'm (in Iraq) to throw water on a fire, they're wrong," Rumsfeld told reporters on board. "We care about the detainees being treated right. We care about soldiers behaving right. We are about command systems working."

Critics are calling for Rumsfeld, one of the architects of last year's invasion of Iraq, to resign.

Other U.S. defense officials said the sudden trip by Rumsfeld and Myers was triggered by the photographs.

"This is a terrible tragedy. We're not going to ever say it's not," said Myers.

Efforts by President Bush's administration to contain the damage in a presidential election year to the seven soldiers charged have been buffeted by reports from the Red Cross and other independent bodies saying that Washington was warned about systematic and widespread torture months ago.

http://www.reuters.com/newsArticle.jhtml?type=worldNews&storyID=5131670
 
Has anyone thought about the fact, that when we outsource the low end professional jobs (ie. grunt work) like the ones found in IT, Accounting, Medicine etc..., we are outsourcing the entry-level jobs that our kids need to enter a field?

In essence, we are training the kids of our competition at the expense of our own. Wow, is there nothing we won't do to make a buck?

The problem is the disconnect between those that profit (CEO, upper management) and those that pay the bill in the long term (everyone else).
 
Quote from nkhoi:

don't worry Steve Jobs, Bill Gate are made is USA and so is Mr. Craig.
More...
These men might be born in the USA, but I just bought an Apple PowerBook, and I tracked it on the FedEx website right from the factory -- in Shanghai. When capitalism is functioning properly, money flows to where it can do the most good, the most efficiently. In many cases, that means China or India.
 
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