How am I affected by the flat world?

As previously mentioned, I’ve recently been reading The World is Flat by Thomas L. Friedman. To be honest, I’ve only read the first four chapters so far, in which Friedman expounds his theories on how various forces and convergences have resulted in the “flattening” The logic is clear enough, and the arguments certainly persuasive, but I wasn’t too taken with how they were presented, particularly the excessive repetition of the same facts. There are only so many times you can read about India being able to take advantage of over-investment in fibre optics during the dot-com boom before you want to shout OK, I GET IT. The slight, but noticeable, lack of technical accuracy in some of his facts was also slightly annoying.

The message of the book however is clear and loud, and was drummed home to me today when I sat in on a talk in Hursley by C. Mohan, an IBM fellow (the highest rung of the technical ladder in IBM) and newly appointed chief scientist of IBM India. India and China (and perhaps to a lesser extent Brazil and Russia [collectively forming the so called BRIC emerging markets]) are clearly a source of bright, young and extremely capable computer scientists who are arguably (and this is a generic statement, not an IBM specific one) being under-utilised. That is to say that at some point these highly trained people will want to do more than the typically off-shored testing and maintenance roles. They will want to move up the food chain and take on more responsibility for the development and architecture of IT products and solutions. IBM now employs nearly 40,000 people in India, and we recently announced a further $6 billion investment. We have also recently opened a development lab in Russia, a Linux Development Centre in Brazil, and extended our R&D facilities in China.

As a developer in the western world, I can view this in one of two ways. I could see it as a threat to my job, or I could see it as an opportunity. If I took the former attitude, then I’d be taking a protectionist stance to try to inhibit colleagues from these emerging markets from gaining the knowledge to do my job. For instance, I may not co-operate with people over from Bangalore to pick up particular product skills. There are some reasonable arguments that might lead one to take such an approach, but simple economics mean that it is likely to fail. I once heard (and this is unsubstantiated, so don’t hold me to it as the gospel) that for the cost of employing one developer in a western economy, you can employ four developers in India. For each Indian developer, you can employ three developers in China. So, you can have me, or you can have twelve people in Beijing, all with PhDs. That’s what they call a no-brainer if I am not going to be willing to differentiate myself.

So, the only real option is to make myself part of what Friedman calls “the new middlers”. He defines a new middler using a variety of broad categories based around attributes such as personality, the ability to explain, adaptability, and the capability to leverage opportunities amongst others. My take on this as a professional in the western software industry is that I need to develop my skills in a way which will enable me to attain unique selling points which will keep me employable. I need to continue being close to our clients, be innovative in the work I do, and aim to manouvere myself into more of an architecture/visionary role in the medium term. For me, this is naturally where I see myself going, so I believe I am in a good position. However, I can’t afford to take my eye off the ball.

Over time of course, the current cost advantages of employing computer scientists in emerging markets will decrease as those economies develop, as infrastructure improves, and as naturally follows, wages rise. Mohan made the point that even though the average age of the Indian workforce is an amazing 24.4 years old (an advantage the Chinese economy can’t claim due to the impact of various government policies on the population demographic over the years) there is still a relative lack of IT graduates in India, leading to wages increasing to attract staff, and partly causing the relatively high attrition rate compared to western IT companies.

One thought on “How am I affected by the flat world?

  1. ‘Over time of course, the current cost advantages of employing computer scientists in emerging markets will decrease as those economies develop, as infrastructure improves, and as naturally follows, wages rise.’

    I think some of this is already happening. There is an article entitled ‘In Search of the Next Bangalore’ in Time Magazine (of 3rd July) about precisely this. Apparently the median wage for a software engineer increased by 11% in 2004-2005 across India. As a result some outsourcing houses are further sub-contracting already outsourced work to cheaper markets such as China, the Phillippines and parts of Eastern Europe (I’m pretty much quoting here). I think this is what we’d expect to happen as India matures as a country and wages begin to rise to match skills levels and reality.

    I would also agree with you about the personal perspective; if you attempted to fight this (assuming you thought that was the right thing to do), in the short term you might make some small ‘gains’ in your environment and job role, but longer-term it’s a losing battle. I suspect the only way wages would ever stay imbalanced with respect to skill long-term is with government intervention, and even that’s debatable (and in my opinion, undesirable).

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