Today Computerworld has a story by Carol Sliwa in which 'Sears CEO Alan Lacy sings praises of offshore outsourcing.' I am including a series of quotes from Alan Lacy that first left me speechless, and then left me pondering - what is left of Mr. Lacy's organization after manufacturing, customer support, financial systems, administrative support, human resources, and other 'knowledge worker' functions are outsourced to "smarter" shores?
...quote...
...I think that the fact that we now have potentially the ability to outsource to people who this is their business, they're going to have an incentive -- because it is their business to keep more state-of-the-art in terms of the quality of the financial systems, the HR systems and so on. I think that to some degree, just the nature of IT spending is that we have scarce resources in IT. Resources being scarce is going to lead to, I think, acceleration of outsourcing for some of the more administrative-like functions.
"But I think, beyond that, to me, a very interesting trend right now is the whole non-U.S. opportunity that's available, and ... if you think about personal intelligence and drive being randomly distributed by population -- you know, there are four or five times as many smart, driven people in China than there are in the U.S. And there's another four or five, three or four times as many people in India that are smarter or as smart or have more drive. And if technology is now going to basically reduce location as a barrier to competition, then essentially you've got something like whatever that was, seven or nine times, more smart, committed people that are now competing in this marketplace against certain activities.
"So, I think that the outsourcing potential -- particularly of some of the more commodity-like knowledge worker activities -- we're just beginning to see the first of that curve. I think that, just given the nature of technology and given the nature of those workforces, and given the fact that we've had a decrease in the supply, prices are going to fall.
"So we're going to see, I think, this huge incentive to shift some of these more commodity-like, knowledge worker jobs offshore."...
...end quote...
This comment is depressingly similar to the perception of the Silicon Valley CEOs who were recently quoted as follows:
“U.S. investment in science research has declined 30 percent as a percentage of GDP. That is not good news for innovation and the technology future. The government’s share of that has dropped from nearly 40% to only 10%. Some economists believe that virtually every job that can be sent overseas will be sent overseas. Researchers at UC-Berkeley have said recently that 14 million U.S. jobs are at risk. The recent Industrial Research Institute survey indicated that an additional sharp drop in R&D is expected in 2004.”
"There's something at an individual level that people in the [Silicon] Valley have to sign up to do. In this globally competitive marketplace, you have engineers in China that go to work from 8 a.m. to 10 p.m. The company feeds them lunch, a great lunch. They have great facilities, equal to the Valley. They serve them a great dinner, and they work six days a week. They go home to be with their families during a month during Chinese New Year. But after that, they're working hard, and they're really dedicated to what they're doing. We [in America] have to recover from the sense of entitlement. Individuals have to want to get re-trained. They're going to have to want to work much harder.”
It's the robber baron mentality of employers of the 1890s all over again.