A while ago I was traveling the back-roads behind the South-Eastern Coast of Australia and on one occasion drove up the Illawarra Highway and over the Macquarie Pass. This is a pretty spectacular road but not for the faint of heart as it’s hairpin bends (switchbacks) and step climbs mean that you will not see any 18 wheelers (or, 22 wheelers, as is often the case in Australia) using this highway. But the pass does support one of Australia’s southernmost sub-tropical rainforest, and to suddenly drive into the forest’s gloom is quite a memorable sight.
I first tackled this road back in 1970 – and on my first motorcycle. I elected to make the climb up to a village pub in the small town of Robertson just the other side of Macquarie Pass. It was an exciting first ride as my headlamp stopped emitting light about halfway up the highway and remained non-functioning for the rest of the night. The ride down as I tried to pick out the apex of hidden corners was a ride I will always remember.
On my most recent trip up this road I once again stopped in at the pub at Robertson just for old time’s sake. Robertson produces a good local cheddar cheese so a cold lager with some cheese and crackers made it worthwhile. But as I settled into the bar, I couldn’t help overhearing the local’s having a healthy debate over the issues of the day. Central to the exchange was the concerns over selling land (mineral resources) to foreigners and how, in the words of one of the locals, piece by piece the whole country could end up in the hands of offshore developers. “Why are we selling it one holding at a time? Why don’t we just sell the whole bloody country, and then we could all go live in the Riviera?”
The picture I have included here is by a local South-East Coast painter, Max Mannix, which captures the casual nature of the folks at the bar, and reflects the attitude of the locals as they debate such heavy topics. And it was against this background that I caught the Lou Dobbs report on CNN last week where they reported on the subject of “Best Careers for a Changing Job Landscape” from a recent US News and World Report article. The magazine reporter was seeing “more students are graduating from college at the same time that employers are off-shoring more professional jobs. So, many holders of a bachelor's degree are having trouble finding jobs that require college-graduate skills.”
CNN then went on to highlight that, for the first time, the US News and World Report had added four careers that didn’t require a college degree “biomedical equipment technician, firefighter, hairstylist / cosmetologist, ad locksmith / security system technician” to their best career list. This really floored me – best career options were now being promoted on the basis of least threat to being off-shored rather than on the basis of value they will bring to the community. Don’t pursue engineering or science as you will not be able to compete! Get a job as a firefighter or a hairstylist, as we don’t see much off-shoring potential with these vocational choices!
The fear of off-shoring has now created a situation where we are now telling our kids – the gigs up! Let’s find something else to do now! We are essentially letting them know we are more concerned about them having a job, rather than taking on a career with global challenges. In effect we are writing them off before we even put them into the game.
Off-shoring has its upside and many corporations have picked up on the most significant element, the economic advantage. But as I look at what’s now happening in the marketplace, I am becoming concerned on three levels.
The first level is something I call development creep. Nearly every offshore project I have been involved with starts out on the understanding that it’s about support and maintenance of older products. It often includes products and features often no longer considered mainstream or current, which are frequently based on older infrastructure technology and / or programming languages. But after a couple of years, I see these off-shore companies approaching their partners and begin to solicit new-development opportunities. Their argument is that it’s just becoming too hard to keep any group of programmers together without some development projects and so, over time, development creep begins.
But the price paid by the partner, and eventually the ecosystem of ISV’s supporting that partner, becomes pretty obvious. The reach of these new-development projects often overlaps with what ISVs offer – and I have seen this overlap happen a number of times. Left unchecked, development creep will collapse any viable ISV ecosystem as the primary vendor looses credibility with the partners it had attracted.
The second level is something I call direct funding of our future competitors. Whether we even realize it, or not, the fact is that any off-shore community learns quickly when presented with real business problems to solve. And with their predisposition to only want to use the latest architectures, infrastructures, and technologies, this focus accelerates their movement to the front of the curve.
But the price paid by the industry is that, over time, we end up funding a future powerhouse with only limited resources remaining to stay competitive. And I find this very real and I am becoming extremely concerned. I do not want to appear to be an alarmist, but I do want to make sure we are all aware of this potential and that we act with measured caution when we select projects for off-shoring. Clearly, this off-shore funding is what we see today fostering the reluctance of our student populations to take on careers in IT.
The final level is what I call leadership-ciphering, and by this I mean the shrinking pool of IT on-shore activities is lessening the opportunity for real leadership to develop. As you cut away at our entry-level positions and remove the need to even have junior IT positions staffed, how do we really expect to nurture the next generation of IT Architects, DBA’s, and Operations leaders? Even if we do provide ladders that bridge to higher positions, what good will they be if there’s no one around to climb the steps?
Of the three levels, this last one is potentially the most damaging. By taking a short term view and off-shoring to a partner, we begin to strip away at our own ability to apply IT as a business differentiator. We quickly turn to a short-list of global service companies tuned to rolling out variations on a couple of themes, and then wonder why our application of technology to solving business problems isn’t generating the benefits it once did.
But before I go any further on this topic, I want to say I am not anti–globalization. I view the actions of company’s that set up their own operations in a foreign country and then build a company operation around the development of the local community, is something I view very positively. Balancing the development needs across different locations and accommodating different cultures are all key ingredients in promoting innovation. Globalization is quite different to "contract" off-shoring where little consideration is given to anything other than handing over key intellectual assets to anyone who can do something similar for less. And really, the days of savings of 70 percent are over as most of us, with today’s shifting currency valuations, struggle to eek out even 20 or 30 percent savings!
Whether we think in terms of abandoning our sovereignty and letting others exploit our natural resources (let’s sell the whole country!) or we just let other nations capitalize on our intellectual resources (let’s not compete in engineering or the sciences!), the end result is much the same and it’s pretty depressing.
I have developed a different point of view on this. It hasn’t just surfaced but rather, has been slowly percolating to the top. Isn’t it time we seriously challenged the “business norm” of just stripping our ability to compete and allowing our financing to slowly build our future competitors? Isn’t it time to encourage our students to once again, tackle the difficult curriculums of engineering and science?
Firefighters and hairstylists will always be needed, but do we really want to build our society exclusively around these kinds of skill-sets? Or are we going to sit quietly by and wait for new jobs as we become the low-cost off-shore center of the new economies we finance? In the spirit of my mate, back at the pub in Robertson, “why do we off-shore our projects a piece at a time? Why don’t we off-shore all of IT and go live in the Riviera!”