One may argue that these sort of methodologies do not lead toward "innovation." I would assert that the sort of work that they are doing - and that their American competitors were doing - was not all that innovative in the first place: Much of the IT industry is really not all that "creative" in the first place nor is this a common attribute in any work force. Nonetheless, the intellectual environment for a technology work force - problem solving, mastery of the tools and paradigms of the moment, a feel for the current issues and trend - and that actual technical work force itself are quite hard to build.
The point is that the software industry required an experienced, educated and motivated pool of workers, and that we stand to lose that pool. The next group of entrepreneurs that utilizes the pool of talent may well be Indians, one only has to look at the history of software in the 70s and 80s in Silicon Valley to see this. It was the (physical) proximity of urban centers, universities, venture capital, entrepreneurs and designers that lead to the development of that "revolution." One can say that there is a new paradigm around the corner that we allow us to keep our lead but that is an assertion at best and at worst is wishful thinking. It is by no means guaranteed. From a financial viewpoint it would be foolish for any young American to go into any engineering field where the work did not require some sort of local presence, and current enrollments in Computer Science curricula reflect this point quite baldly. It will be hard to raise the cane up when it is in the field.
In no sense has the software industry been "commodified," it has been moved off shore. The "creative destruction" argument is specious in this instance: These jobs are not being replace by a new industry built on the ashes of an older obsolete industry, it is merely a more efficient use of capital. This may in fact be a first modern economic history. It is suicidal to not see this as a real threat to American leadership. That being said, what the solution is is still up for grabs. Had we allowed manufacturing to radically automate in the 60s and the 70s it might not have moved offshore. Perhaps we should consider learning that lesson.
Two things are certain:
1) The American people will not stand by and watch a major part of technology jobs be sent overseas without resorting to political remedies, even if those remedies are in the long term harmful to the nation. The disaster of the demise of manufacturing as the backbone of our economy is too close in time and experience, still too etched on their fathers' faces for us to imagine otherwise.
2) The will not be swayed by a high blown macroeconomic argument coming from elites whose live or children's lives are little effected by outsourcing. They will indeed toss those people out of office or tax the devil out of them.
If conservatives do not come up with some sort of approach to the issue then Left will, and we all know what their solution will entail.
I hate to tell you this, but I've been working with Indian IT workers onshore and offshore for the past 7 years. And people who think the quality is high from offshore, don't know how to measure quality. Those guys can certainly deliver exactly to the specs they've been given. Of course, the real trick is in writing the specs to fit what the client really wanted, because automated code generation tools can do the same thing.
It's not a question of whether the guys in India are sharp or capable. You could take excellent American workers, stick them halfway around the world and watch their productivity and quality take a nosedive also. And unlike Indian workers, they wouldn't have language and cultural barriers to ovecome.
Also, the reason you're so impressed by the Indian workers that come to America is because they send the best of the best over here. The average Indian IT worker is not as good as the average H1-B.
One may argue that these sort of methodologies do not lead toward "innovation." I would assert that the sort of work that they are doing - and that their American competitors were doing - was not all that innovative in the first place
I'd agree with you here. One of the things I have told execs intending to offshore is that if they want to persist doing low quality IT work, I suppose they might as well do it cheaply. But doesn't it make more sense to do high quality work instead? I just get blankly stared at. The level of understanding of how the work gets done is frighteningly low among most IT execs.
These jobs are not being replace by a new industry built on the ashes of an older obsolete industry, it is merely a more efficient use of capital. This may in fact be a first modern economic history.
Beware of any "first" in history. It usually means things are not as they seem. And I think that's true in this case. This is not a more efficient use of capital. It's an accounting gimmick. Those low hourly rates offshore are proving very slippery to tie directly to actual productivity.
India didn't become more productive than the U. S. overnight. That's their goal. But they have not arrived. This is the next "free lunch" in IT. It follows the dot-com boom, and shows remarkable similarities for its total neglect of market fundamentals. If you recall that was another "first" while it was booming. Not so unique in retrospect.
1) The American people will not stand by and watch a major part of technology jobs be sent overseas without resorting to political remedies, even if those remedies are in the long term harmful to the nation. The disaster of the demise of manufacturing as the backbone of our economy is too close in time and experience, still too etched on their fathers' faces for us to imagine otherwise.
Total agreement here, regardless of all the rest of the above. For some reason Republican political leaders are neglecting the politics of this situation in favor of spouting general macro-economic theory. That's not going to fly. There is a real political problem here, and it needs real political attention.
2) The will not be swayed by a high blown macroeconomic argument coming from elites whose live or children's lives are little effected by outsourcing. They will indeed toss those people out of office or tax the devil out of them.
This one is so obvious I am baffled why it seems almost universally ignored by Republican strategists.