In January 2003, The Cleveland Plain Dealer ran this headline: “Ohio Lost 200,000 Manufacturing Jobs.” They blamed competition from India and China.
In a recent article, Business Week looked at how Call Centers are being shipped offshore, sending tens of thousands of jobs offshore. Dell, Citigroup, Microsoft, General Electric and other major corporations now have call centers abroad.
Microsoft and GE have one of the world’s most productive research and development centers in India.
Companies like Ford, GM and Mercedes have built or relocated entire plants to China.
Tata India has one of the largest and most highly trained programming teams in the world.
Accountants are next to feel the heat of competition abroad. An employee of the accountant’s office can scan the financial data of a company to an Internet server. An accountant in India will access this information through a secure link and process the finances overnight. The results are waiting on the accountant’s desk when you arrive the next morning.
How do you fight this?
Outsourcing and offshoring are here to stay.
Outsourcing is defined as taking a specific task and having another company perform this service and then returning the results to the original company.
To relocate is to take an entire plant and move it to another country.
In the example below, Boeing is building a new airplane. Boeing has Russian designers designing the wings. Boeing also outsourced the electronics for this aircraft to a Japanese company. This Japanese company outsourced certain electronic components to the same company in Russia that Boeing outsources the wing design to.
Boeing can employ five engineers in Russia for the price of one engineer in the United States.
Are you untouchable?
Let me define untouchable. Being untouchable is the continuous learning process that a person must go through to move to the next level of professional and personal development.
For example, in his book The World is Flat by Thomas Friedman, he discusses the impact of outsourcing on his friend Bill Greer.
Bill is 48 years old with 26 years of experience as a freelance artist and graphic designer. His clients include such notable names as the New York Times and McDonalds.
In the past, a client requests a finished piece of art. Greer would draw it, color it, mount it on an illustration board, cover it with tissue paper, package it, and ship it. The process he just described is known as creating camera-ready art.
In the new process, Greer’s customer would request a design, Greer would create the product using digital software, and email the product to the customer.
Programs like Quark Express turned graphic design into a commodity. The software gives everyone the same tools and allows almost everyone to have the ability to create acceptable works of art. I use a program called GIMP and it’s free.
Greer pushed himself up the ladder of knowledge and reshuffled his skill sets. He became the man of ideas. He would create the idea, draw it and email it to his clients and they would finish it. For Greer, the ancient process consisted of eight steps. The new process consists of three steps.
This concept of creating ideas led him to a completely new business. He’s not just another fucking artist anymore, his clients now buy his ideas.
Bill Greer is an untouchable. He is customizable. He continues to hone his skills. He creates new forms of value for his customers.
What are you doing to be an untouchable?
We’ve been through this before. It happened when we went from the agricultural age to the industrial age to the electronic age. On the farm you could get by with a third grade education and no one cared. During the industrial age you needed a high school diploma. Hundreds of thousands of people migrated from farms to cities during the industrial revolution and retrained their skills to find work.
In the 1950s in Akron, Ohio, rubber companies rented buses and sent them to the mountains of Pennsylvania and West Virginia to bring workers to Akron to work in the rubber factories. That’s how I came to live in Akron. My father left the Pennsylvania coal mines to find a better life here. He did not know that working in the rubber factory was no different than working in a coal mine.
The people who left the farms adapted, learned new skills, and became untouchable in their generation. The men who left the mountains and came to Akron looking for work also learned new skills.
In both cases, education played a key role in this transformation.
In the age of technology, the United States is being pushed along by two highly motivated competitors: India and China. After years of repression, they now see that they can have what Americans have enjoyed for so many years.
Our grandparents came from the old country to create a better life.
Our parents learned new skills and found ways to compete in their generation.
Technology allows India and China to do the same; all without leaving home.
What is the United States doing to compete? More importantly, what are you doing to compete, to become an untouchable? As I see it, there are three things we need to do:
1. Stop being complacent and expect the government to do something. Governance is about borders: political, commercial, and geographic. They do not understand that with technology the world is flat and traditional limits cease to exist. Politicians are lawyers, not engineers. They don’t understand technology.
2. Take responsibility for your work situation. Treat your job like your business. You can’t change something unless you take responsibility for the results. Our parents and grandparents took responsibility when they left the farm or immigrated to a new country.
3. Finally, never stop learning. When you stop learning is when you die. Your death is not physical but it is an emotional and intellectual death anyway.
As Satchel Page once said: don’t look back, you may be beaten.
Untouchables never look back – they are always looking for the next way to provide greater value. If you always provide value, there is no need to look back.
The best way to describe how we should respond to outsourcing and offshoring is through this African proverb:
Every morning in Africa, a gazelle wakes up
He knows that he must outrun the fastest lion or he will be killed.
Every morning the lion wakes up
He knows that he must outrun the slowest gazelle or he will starve.
It doesn’t matter if you’re the lion or the gazelle,
When the sun rises
You better start running.
