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Moving Tech Jobs Overseas - The Economics & Why They Probably Aren't Coming Back

1/27/2012

4 Comments

 
THE CHAIN LOCKER
See this link about Apple's move to China: http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&nl=todaysheadlines&emc=thab1
A story out of my own family's past, echoed in today's headlines: back in the '80s the company my Dad worked for, CTS, moved many operations to Singapore for the same reasons detailed in this article. 

Dad was an engineer for CTS who went to Singapore to guide the establishment of the new plant, and I was able to visit them there. He marveled at the Singapore government's support of tech industries & engineering education, sharp young freshly-trained engineers available for a fraction of US wages, uncomplaining 12-hour work shifts by skilled workers, and radically lowered rate of rejects. CTS also saw a radically lowered cost of operations in Singapore.

Of course, after about two years in Singapore, Dad came home and suddenly faced early retirement. He fought it off for a while, but finally - along with a slew of other US engineers - had to go. Fortunately for Dad, he was old enough to retire - younger engineers weren't, and simply found themselves out of work. And that was 30 years ago. The fact that Apple held on until 2004 says that they tried, at least to stem the tide. To have held out longer would have crippled the company.

I'm no expert, but I don't think either Mitt or Obama, no matter how badly they would like to "create" good-paying American jobs, can do so in any predictable way. I don't think the US can restructure her economy to reclaim those particular lost jobs. It will take The Next Big Thing (whatever that turns out to be) and like most of these transformations, it will probably take us by surprise. 

The only good move I can see at this point is to invest in education. That's what Singapore did in the '70s & '80s, paying for higher education for any student who showed the talent and discipline to work at it, including post-grad work at universities abroad. It's one of the factors that drew Dad's company to Singapore and made that little "tiger" ready for anything - and prosperous today.

I don't think draconian cost-cutting to "make America competitive again" will get that done! We need to think beyond that now. 

Dad's gone, but I can see him nodding his head.

4 Comments
Web Development link
8/26/2012 04:36:12 pm

Hi this one is great and is really a good post. I think it will help me a lot in the related stuff and is very much useful for me. Very well written I appreciate & must say good job.

Reply
Reid
8/26/2012 07:56:44 pm

Thanks! In my lifetime, I've seen formerly separate local and regional economies begin to merge, as all economies become more interdependent. Educated, skilled people the world over are becoming better able to participate in that global economy. As the world climbs out of recession that should become more evident.

I'm a mariner, so I'm more aware of this, perhaps. The recent ratification of the Maritime Labor Convention by the Philippines - the 30th nation to ratify it, putting it into effect next year - illustrates this.

More and more (I hope) global standards will gain sway - and we can hope that national politics will become less obstructive and less important, though it will never go away.

When you stop to think about it, that's the power of democracy! Forget the noble principles (they are!) and the associations with Western culture that some opponents decry.

Aside from all that, democratic societies with substantially free economic systems can tap into every part of their society - they give every citizen an opportunity to participate in, and power, their economy. Does that energize that nation - that economy - and those individuals? You bet!

That's another reason for supporting equality for women. Why cripple 50% of your national potential? But these aren't simple questions; and although the logic is evident, putting them into practice in the face of existing social norms can be problematic.

Thanks for your comment - I appreciate hearing from you!

Reid

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vishal bagchi link
4/30/2013 06:47:37 pm


I think the things you covered through the post are quiet impressive, good job and great efforts.
I found it very interesting and enjoyed reading all of it...keep it up, lovely job.

Reply
Reid Sprague
4/30/2013 10:46:25 pm

I appreciate your thoughtful response. If, in your Web travels, you see any good posts about how the world economy is growing & changing, particularly from the Asian perspective, please let me know so I can read them too. I'm fascinated by this stuff.

Economics is an interesting subject. Some think of it as confined to money exchanges and business, but economics is really a way of seeing people doing their most important activities. It's human nature expressed in complex action! Economics really includes many other disciplines, including psychology and politics. Economics is all of us, doing almost everything, and recording it in our transactions. My son is an economist, and most of what I've learned about it I've learned in fascinating conversations with him.

The center of world economic gravity is moving away from the West, toward Asia - many would say, toward China. I'm not sure about China, though. Yes, she is a new and powerful player, but she harbors the same demographic 'time bomb' that awaits her more established Western competitors: an aging population. China has done this to herself with her population control policies; whether she can find a way to overcome it is yet to be seen, but I think it will be a problem for her.

Countries with younger populations have a natural economic advantage, of course, with a larger percentage of productive workers and a lower percentage of older citizens needing to be cared for; and in this I see China's rival, India, rising to the top.

India is also a democracy, giving her the potential to involve more of her population in her economic prosperity, and also a way to resolve social frictions before they become cataclysmic. China, although apparently very stable, has serious schisms in those areas that might give way in a mighty earthquake one day. So China's future does pose some questions.

As India grows into her future I think we will see great things. But time will tell. As an Indian, you will be part of that change, and I wish you well!

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