Thanks Keith, I believe a general trend to greater internationlization in material processes is for the good of all in that reduces provinciality and builds a sense of interconnection. Whether this can be done without a loss of psycho-cultural identity is the question for me. It never worked for the arts to become internationlized and in Europe they rebounded in the late 19th and early 20th century to national cultural styles although their major performing houses are international in the same sense that museums are. It became clear that a loss of identity meant a loss of creativity and depth so Rodin for example stressed the French side of things as does Boulez and Henry Moore. The Germans and the English went International but Germany ended up with the Hitler reaction and the English lost their identity until Britten, Henry Moore, Barbara Hepworth and others gave it back to them. Since the late 1970s England now has a fine group of composers writing Chamber Operas and native Chamber Operas control half of the opera going audience in the nation. The Italians have been experts at such cultural/industrial type marriages for hundreds of years and basically control the movie identity in the US with the power of their identity as they do the opera and much of the Symphony world. The Russians have moved out of the superior Communist artistic schools and are making a play for our identity through the power of their virtuosity and ability to work together in teams for entrpreneurial advantage. Eventually America also will have to find a soul and a center or will dissolve in petty localisms. So I think an International presence is a good thing but it must be balanced by a local identity if it is to work.
I have two questions: 1. Why is the system with cheap energy discouraging the ideals of equality and encouraging a widening income and intelligence gap? 2. Why are you projecting your experience in labor scarcity, I guess in England, onto the rest of us? We have a labor glut over here and the problem is not the same as you point out. The CEOs I know who were in the forefront of moving Intelligence Capital offshore did it for two reasons. The first was economic and they sold it to their labor with the promise of more leisure which never happened but ended up in downsize. So the issue was solely economic. A country with as high an immigrant load and as fine an educational system as we still have, (although it is being destroyed for what is probably the answer to question number one) will never suffer a labor scarcity. We simply import what we need and we do not need more workers but less. That is why I stated a year ago that the implicit contract between the government and business was to provide jobs for people that needed them although business didn't need them for efficiency. These are not poorly trained people but highly trained people put into dead end game playing (small wars) positions that move things from one place to another but offer little genuine progress. In fact the word "progressive" has become a "put down" second only to "liberal." My experience with the Music Publishing business here is a clear vindication of my observation. Simply put, they will not sell to us but "allow us to purchase if we do all of the work and tell them what we want and are lucky enough to know the product before we purchase it." No serious selling going on there, just permission to purchase. The salesman is truly dead. The information industry is not a lot different. On another track by turning health care into a business we are encouraging doctors to keep us sick for a profit and in the computer industry the parallel with viruses is just to easy a mark to make with CEOs who are operating on a Sociopathic model. The government's insistance on processes that make industry the prime provider of welfare through make-work jobs constitutes a hidden tax on business that is never mentioned and when they get mad enough about it they just have a "lean and mean" downsizing to get rid of the "tax" and let the society deal with its excess. REH (Not an economist or ex-bureaucrat but definitely an artist, teacher, businessman and person who lives in the aural world of time.) ----- Original Message ----- From: "Keith Hudson" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Tuesday, August 26, 2003 11:55 AM Subject: [Futurework] Intelligence divide going global > At first, the implications of the FT article below run counter to what I > was writing in the previous posting -- that is, that globalisation is not > the main problem. What the article illustrates full well is one of the two > real problems that I instanced. This is that if economic growth continues > apace -- caused by cheap energy fuels in the last two centuries -- a > widening intelligence gap will occur in the population between those > between those in technological, high-skill jobs and those in average-skill > jobs, and increasingly becoming lower and lower skilled as automation > increases. > > At the present time, most jobs that are being exported to cheaper wage > countries such as India or China are fairly low-skill jobs such as > call-centre services and factory assembly work. But, in the not-too-distant > future, these will be automated anyway. If those, such as the trade unions, > who are calling for these jobs to be retained in their host countries, were > successful then this solution would only be a temporary measure. In the > short term, trade unionists might possibly be saving jobs (albeit at the > expense of higher consumer prices to their friends and neighbours), but > they are destined to disappear anyway. What trade union officials ought to > be doing for their members is that, before their members lose their jobs, > they should be offering training courses in higher skills. This is what > trade unions and working men's associations were very good at a century and > a half ago, but then, as prosperity gathered pace, yielded the task to the > state. > > But it's the higher skill jobs that is the rub -- in the medical, > accountancy, architectural, and perhaps legal, professions that are > mentioned below. (And, probably, many more to be added in the coming > years.) Yes, these professionals in India and elsewhere in Asia have lower > fees than those in the west, but it wasn't this factor in the first place > that caused these jobs to go abroad. It was that employers needed more of > these jobs than the home country could supply. There just aren't enough of > these higher-skill people in the west. And once the out-sourcing habit > started then it was a great deal easier to keep it going rather than having > to try and recruit talent at home. This is a case where, seemingly, the > highly efficient talent selection procedures of national educational > systems (whether state or private) can't supply enough individuals of > sufficiently high ability to run the economy. So employers have to go > abroad to cream off the talent there. This, once again, can't really be > blamed on globalisation. It is, quite simply, the only way that western > countries can now keep going. In England, for example, the National Health > Service couldn't operate unless there a stream of qualified doctors, nurses > and technicians continues to come from abroad, draining their own countries > of badly-needed personnel. > > It's all a very worriesome business, but it's a problem that's much deeper > than the temporary matter of the globalisation of jobs. It lies at the very > heart of the type of growth economy that western nations have been driving > forward during the past two centuries. > > KSH > > <<<< > SERVICE INDUSTRIES GO GLOBAL: > How high-wage professional jobs are migrating to low-cost countries > > Dan Roberts and Edward Luce > > Clutching her side in pain, the woman with suspected appendicitis who was > rushed to a hospital on the outskirts of Philadelphia last week had little > time to ponder how dependent her life had become on the relentless forces > of globalisation. Within minutes of her arrival at the Crozer-Chester > Medical Centre, the recommendation on whether to operate was being made by > a doctor reading her computer-aided tomography (CAT) scan from a computer > screen 5,800 miles away in the Middle East. > > Jonathan Schlakman, a Harvard-trained radiologist based in Jerusalem, is > one of a new breed of skilled professionals proving that geographic > distance is no obstacle to outsourcing even the highest paid jobs to > overseas locations. The migration of white-collar work has moved up the > value chain from call centre operators and back-office clerks to > occupations such as equity research, accounting, computer programming and > chip design. > > The trend -- still only a trickle at present -- may look to some like a > temporary fad pursued by companies seeking to cut costs. For trade unions > in the US and Europe, it heralds a fundamental restructuring of rich-world > economies, akin to the globalisation of manufacturing in the 1980s and the > outsourcing of unskilled service jobs in the 1990s. > > At present, only 35 patients' scans are transmitted each day from US > emergency rooms to Dr Schlakman's small team of doctors in Israel. But with > senior radiologists costing up to $300,000 a year to hire in the US and > many emergency cases arriving at night, the use of medical expertise based > in a different time zone and earning less than half US rates is almost > certain to rise. "It's much more expensive to use night staff in the US > because they need time off the following day," says Dr Schlakman. > "Radiography is probably the best area to start with because a lot of it is > based on computer imaging, which you don't need to be physically present for." > > In Thailand, a team of 50 architects is working on behalf of 16 UK > architectural practices that have outsourced some of their technical > drawing and three-dimensional computer-generated design work. Trieu Nguyen, > technical and compliance manager at Atlas Industries, used to teach > architecture to university students in Ho Chi Minh City. Today, his days > may be spent checking technical drawings for a new secondary school in the > English home counties. Typical pay at Atlas is about $6,000 net a year. > This is high by local standards -- Vietnam's average per capita income is > about $400 -- but a fraction of what comparable workers receive in the UK. > > Like Jerusalem's radiographers, Thailand's architects use broadband > internet connections as a link to their markets; but occasionally > customers will make the journey themselves. > > During the past year, Singapore's Changi airport has begun receiving empty > aircraft from the US. A growing number of US-based airlines are sending > their fleets to Asia for maintenance. Lower wage rates for skilled > aerospace engineers more than compensate for the $60,000 it can cost to fly > across the Pacific. > > At the centre of this service revolution is India. Just as China is fast > becoming the new workshop of the world for light manufacturing, India has > its eye on the globe's professional services. > > A growing clutch of Indian companies provide computer-generated animation > and special effects services for the western film industry. Reuters, the > financial and media group, is preparing to open a production facility for > preparing and analysing the financial data it sends to screens in > investment banks -- threatening some of the 1,150 staff currently doing the > work in the UK and US. And there are signs that India will take a slice of > offshore fund management and other financial services in the next few years. > > "There is no economic limit to what can be outsourced to India," says Tarun > Das, head of the Confederation of Indian Industry. "The only limit that we > can see is a political backlash in the west against the migration of jobs > to India and elsewhere." > > Ramesh Sharma, head of Moving Pictures India, a Delhi-based company that > makes documentaries and provides animation and special effects services for > western production companies, says that his advantage is exactly the same > as that of Indian information technology or call centres. The same cost > advantages that attracted General Electric, banks such as HSBC and Standard > Chartered, and BT Group, a UK telecoms company, to relocate back-of-office > and treasury operations to India are prompting others to see what the > country's 1.5m English-speaking graduates are capable of. > > "Our animators are just as qualified as most western animators," says Mr > Sharma, whose company has won out-sourcing work from Dutch, Italian and > British production companies. "The key- lement here is that they provide > the same quality service for roughly a quarter the price." > > Moving Pictures has been sending film crews around the world to make > documentaries for western broadcasting companies. "We make a documentary > for $25,000 when it would cost $100,000 in the Netherlands," Mr Sharma > says. The only limit he can imagine is the extent to which foreign > companies can shoot their films at India's large film studios in Bombay and > Hyderabad: "You would have to fly in all the extras if you wanted them to > be white." > > Ajay Lavakare, chief executive of RMSI, an Indian "geographic information > services" company, says India is now a world leader in this niche > sub-sector. By analysing maps and satellite images, RMSI helps insurance > companies assess whether their risks are too concentrated, it helps > ordnance surveys in creating sophisticated maps (in the UK and Japan) and > it provides computerised road maps for vehicles. > > "Which western company can assemble a project team of 200 people including > qualified geologists at the drop of a hat?" asks Mr Lavakare. "The > advantage is not just in our lower costs -- it is in the easy availability > of highly qualified English-speaking technicians." > > The cost advantages are even more striking in healthcare. Naresh Trehan, > director of Escorts Heart Institute in New Delhi, says that an increasing > number of foreigners is coming to India for heart bypass operations. The > average cost, including air fare, is about $7,000 -- roughly a quarter of > what it would be in the UK private sector. And there are no waiting lists. > > "Last year we did more than 4,000 heart bypass operations -- the highest of > any single institute in the world," says Dr Trehan. At 0.8 per cent, > Escorts' mortality rate was comparable with international standards. I > > ndian companies in almost every sector are beginning to wake up to the > commercial logic of such arguments. "What is to stop Indian legal companies > from providing legal services to the UK, which also has a common law > system?" asks Omkar Goswami, a leading economist. "If it can happen in > accountancy and the medical profession, why not law?" > > But there is also growing awarenes in India of the potential for a popular > backlash in the west against the "loss" of jobs. "Protectionism can take on > very sophisticated guises," says one Indian executive. "We believe that > India will increasingly become the target of such arguments and we must act > to defend ourselves." > > One consequence is that Indian companies now play down their success; > western journalists are increasingly refused access to call centres in > Madras, Hyderabad, New Delhi and Bombay. More importantly, India's > government is adopting a strikingly new trade negotiating position, hoping > to secure a market access agreement for service professionals in the Doha > round of global trade talks. This contrasts markedly with India's > traditional suspicion of open markets. "India has finally struck economic > gold," says a senior trade official. "We have to adjust our policies > accordingly." > > Another policy change involves heavy lobbying by Indian trade associations > in Washington, DC, where US politicians are under pressure to react to the > impact of overseas outsourcing on the still-struggling technology industry. > In New Jersey there has been pressure to ban outsourcing of public sector > contracts to offshore processing centres such as India. > > The sensitivity is well understood by technology companies but many feel > compelled to look at moving jobs to lower-cost countries because, as one > Microsoft executive put it recently, "our competitors have already got this > religion". > > A internal presentation by a human resources director at International > Business Machines obtained by union campaigners at the Washington Alliance > of Technology Workers summed up the problem: "One of our challenges is to > balance what the business needs to do with the impact on people and -- this > is one of those areas where this challenge hits us squarely between the > eyes. Our competitors are doing it. so we have to do it." > > Marcus Courtney, a campaigner at the Washington Alliance, says the result > is a hollowing, out of the US IT industry at all levels. "When you have a > software developer with postgraduate level qualifications having to train > his replacement in India, you realise this not about skills," he says. > "This is about a global economy that is increasingly based on the > lowest-cost labour, and multinationals are beginning to exploit that." > > Europe, too, fears a repeat of the job losses that hit manufacturing in the > 1980s and 1990s. "It's just a trickle right now but we're very worried that > higher-skills jobs are beginning to go too, such as information > technology,"says Peter Morris, policy adviser at the Communication Workers > Union in the UK. "In theory, there is no limit: any job which can be done > remotely could disappear abroad." > > While unions in the US and the UK argue that India's advantage in service > industry outsourcing lies in its "sweatshop" wages and working conditions, > few Indians take such descriptions seriously. Working conditions at India's > call and IT centres -- whether directly managed by western companies or by > Indian-owned contractors -- are considered among the best of any type of > employment. Wages are high by Indian standards. And in spite of an average > 50 per cent annual growth rate in revenues -- expected to continue > indefinitely -- India's business processes out-sourcing sector still > employs fewer than 200,000 people. That number is certain to rise rapidly. > > Additional reporting by Andrew Bibby > > Financial Times 20 August 2003 > >>>> > > > Keith Hudson, 6 Upper Camden Place, Bath, England, > <www.evolutionary-economics.org> > > _______________________________________________ > Futurework mailing list > [EMAIL PROTECTED] > http://scribe.uwaterloo.ca/mailman/listinfo/futurework > _______________________________________________ Futurework mailing list [EMAIL PROTECTED] http://scribe.uwaterloo.ca/mailman/listinfo/futurework
