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Fw: Coming Out for Outsourcing  Julian Goh
 Dec 01, 2004 23:05 PST 

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             DAVID KIRKPATRICK=20
                  Coming Out for Outsourcing
                  Despite the outrage over U.S. corporations sending jobs o=
verseas, many readers agreed with me that Americans must accept that we liv=
e-and do business-in a global marketplace.
                  Dec 01 2004
                  By David Kirkpatrick
                  Fortune.com


                  My 10/29 column entitled "Why Outsourcing Isn't Really th=
e Issue" engendered a surprising and gratifying new strand of reader sentim=
ent. Unlike the anti-outsourcing zealots who called me names, like "arrogan=
t puke," for expressing an opinion with which they disagree, many of you se=
emed to want to reassure me that I have readers who aren't so mean and vind=
ictive. You turn out to be both thoughtful and pleasant! And some of you ac=
tually agree with me!=20

                  Readers enumerated a variety of reasons why outsourcing, =
while painful for displaced workers, is not the death knell for the U.S. ec=
onomy. You also suggested a variety of interesting ways to think about the =
challenges that outsourcing poses. I'd like to share them with the rest of =
our readers. Here are a few excerpts:=20

                  Tech company COO: "Ask any of your negative commentators =
to take a hard look at the labels of the clothing they wear, or the cars th=
ey drive.... Ever since ships began to steam between continents, the U.S. h=
as shipped labor overseas. Had this early example of outsourcing not taken =
place, the U.S. would continue to be clogged with textile manufacturing pla=
nts. However, as that work migrated to the East, Americans innovated and de=
veloped technologies and resources that pioneered industries and created hi=
gher-paying, more meaningful jobs.... When companies that decide not to out=
source offshore go belly-up... very few patriots will offer their condolenc=
es."=20

                  Retired HP general manager: He suggests an exercise to fr=
iends concerned about outsourcing. "I ask them to [imagine] they are the CE=
O of a 500-person company that competes all over the world, with competitor=
s based in Germany, Brazil, China and India. They have a 20-person in-house=
customer support organization and are paying those people $30/hour. Their =
competitors utilize an Indian company and are paying $3/hour. Their profit =
margins are shrinking and their prices too high, so their total business is=
also shrinking. What are they going to do to compete and preserve employee=
s' jobs? What if they were prevented by our government from utilizing other=
countries' workers?"=20

                  Steve, GM for Asia-Pacific business unit of a privately h=
eld software company: "I see and hear firsthand the argument for and agains=
t outsourcing. I see new companies springing to life in the PRC [People's R=
epublic of China] and elsewhere to fill the demand for their expertise and =
yes, lower cost structure. I see a growing consumer class emerging... I see=
opportunities for U.S. companies... This country and its citizens do need =
to wake up and accept that the U.S. is not an island and is rapidly losing =
its leadership in the global economy."=20

                  Larry: "Outsourcing outside the borders of the U.S. is a =
natural extension of the common business practice of moving operations to l=
ess expensive areas within the U.S... So why all the outcry now? I think it=
's because the work is going to India and people are prejudiced... I haven'=
t heard anyone say that they're willing to pay higher prices so that the jo=
bs can stay in the U.S.... There's a big disconnect between people's ideals=
and their pocketbooks."=20

                  Deb, a software company executive: "The real issue to me =
is... the level of anger that we are willing to direct at another human bei=
ng has grown dramatically. Perhaps it's because we interact more at a dista=
nce, due to the Internet, e-mail, cell phones, etc., so we can dehumanize t=
he person receiving our anger. As a country, we can no longer have a civili=
zed discussion about many issues-economic, religious, or political. We've b=
ecome a nation of extremists, starting at the top... Thank you for attempti=
ng to hold a civilized discussion."=20

                  A reader from Canada: "I admire your ongoing attempt to b=
ring intelligence to bear on the outsourcing question, but I fear you are d=
oomed to failure... The responses which you have received... are bigotry, p=
ure and simple.... It is strange that a technology writer has become such a=
lightning rod on this issue when many blue-collar, non-tech jobs have alre=
ady been lost.... The bottom line is-globalization is not something that wi=
ll happen-it has happened. The world's greatest capitalist nation can whine=
about it or adapt."=20

                  A reader from Hong Kong: "Outsourcing jobs to more compet=
itive India represents not merely America's generosity to the less-well-off=
, it actually benefits Americans overall. This is the clear conclusion of e=
very serious economic analysis... from [19th-century British economist Davi=
d] Ricardo to [Columbia University economics professor Jagdish] Bhagwati. O=
f course, I live in a place where such understanding is the lifeblood of ou=
r prosperity. Perhaps the U.S. electorate should travel more."=20

                  Patricia from San Diego: "To think that other countries i=
n the world would not want to capitalize on technology and provide jobs for=
their own citizens smacks of hubris... Having worked for a company that su=
ddenly closed its doors and put 70 people out of work, I understand the ang=
er about being laid off... My only hope is that as these growing economies =
really begin to flourish, the wages, health care and standards of living wi=
ll improve and eventually it will all even out. Our bigger-is-better lifest=
yle may be lowered a bit, but won't we all be better off in the long run?"=
=20

                  Another reader from HP: "I've trained my replacement once=
and may be forced to do it again. The first time I found work in another s=
ection of the company. This time I may not be so lucky. And yet... protecti=
onism is not the answer. See how well it served Japan. We now live in a glo=
bal economy. To think anything different is suicide."=20

                  Koushik, who runs an investment advisory firm in India: H=
e notes that Singapore's prime minister was recently quoted in FORTUNE Asia=
worrying aloud that smart people elsewhere are willing to work harder and =
at lower wages than people in Singapore, and admitting that is a big proble=
m for his country. "The U.S. political leadership... doesn't want to give t=
his same bad news to their people... If [people in the U.S. understood that=
] they would be saving like crazy rather than buying huge mansions, SUVs, a=
nd going deep into debt."=20

                  This is not a message that will be well received in the U=
.S.=20

                  Finally, perhaps my favorite letter came from Cindy in No=
rth Carolina. In total, it read: "Good column. I love your spunk!" Thank yo=
u, Cindy.=20

                  Sorry I can't respond personally to all your great letter=
s.=20



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                  KIRKPATRICK</SPAN></TD></TR>
              <TR>
                <TD colSpan=3D2><A name=3D11363></A><SPAN class=3DBlueTitle=
 Coming=20
                  Out for Outsourcing</SPAN><BR><SPAN class=3DBodyText>Desp=
ite the=20
                  outrage over U.S. corporations sending jobs overseas, man=
y=20
                  readers agreed with me that Americans must accept that we=
=20
                  live=97and do business=97in a global marketplace.<BR>Dec =
01=20
                  2004<BR>By <A=20
                  href=3D"http://ltrack.timeinc.net/r0/fastforward_12-01-20=
04/h_author_archive/in?http://www.fortune.com/fortune/author_archive?author=
name=3DDavid%20Kirkpatrick&column_id=3D&year=3D2004">David=20
                  Kirkpatrick</A><BR>Fortune.com<BR><BR>
                  <P>My 10/29 column entitled "<A class=3DRelatedLink=20
                  href=3D"http://www.fortune.com/fortune/fastforward/0,1570=
4,735922,00.html">Why=20
                  Outsourcing Isn't Really the Issue</A>" engendered a=20
                  surprising and gratifying new strand of reader sentiment.=
=20
                  Unlike the anti-outsourcing zealots who called me names, =
like=20
                  "arrogant puke," for expressing an opinion with which the=
y=20
                  disagree, many of you seemed to want to reassure me that =
I=20
                  have readers who aren't so mean and vindictive. You turn =
out=20
                  to be both thoughtful and pleasant! And some of you actua=
lly=20
                  agree with me! </P>
                  <P>Readers enumerated a variety of reasons why outsourcin=
g,=20
                  while painful for displaced workers, is not the death kne=
ll=20
                  for the U.S. economy. You also suggested a variety of=20
                  interesting ways to think about the challenges that=20
                  outsourcing poses. I'd like to share them with the rest o=
f our=20
                  readers. Here are a few excerpts: </P>
                  <P><STRONG>Tech company COO:</STRONG> "Ask any of your=
=20
                  negative commentators to take a hard look at the labels o=
f the=20
                  clothing they wear, or the cars they drive.... Ever since=
=20
                  ships began to steam between continents, the U.S. has shi=
pped=20
                  labor overseas. Had this early example of outsourcing not=
=20
                  taken place, the U.S. would continue to be clogged with=
=20
                  textile manufacturing plants. However, as that work migra=
ted=20
                  to the East, Americans innovated and developed technologi=
es=20
                  and resources that pioneered industries and created=20
                  higher-paying, more meaningful jobs.... When companies th=
at=20
                  decide not to outsource offshore go belly-up... very few=
=20
                  patriots will offer their condolences." </P>
                  <P><STRONG>Retired HP general manager:</STRONG> He sugges=
ts an=20
                  exercise to friends concerned about outsourcing. "I ask t=
hem=20
                  to [imagine] they are the CEO of a 500-person company tha=
t=20
                  competes all over the world, with competitors based in=
=20
                  Germany, Brazil, China and India. They have a 20-person=
=20
                  in-house customer support organization and are paying tho=
se=20
                  people $30/hour. Their competitors utilize an Indian comp=
any=20
                  and are paying $3/hour. Their profit margins are shrinkin=
g and=20
                  their prices too high, so their total business is also=
=20
                  shrinking. What are they going to do to compete and prese=
rve=20
                  employees' jobs? What if they were prevented by our gover=
nment=20
                  from utilizing other countries' workers?" </P>
                  <P><STRONG>Steve, GM for Asia-Pacific business unit of a=
=20
                  privately held software company:</STRONG> "I see and hear=
=20
                  firsthand the argument for and against outsourcing. I see=
new=20
                  companies springing to life in the PRC [People's Republic=
of=20
                  China] and elsewhere to fill the demand for their experti=
se=20
                  and yes, lower cost structure. I see a growing consumer c=
lass=20
                  emerging... I see opportunities for U.S. companies... Thi=
s=20
                  country and its citizens do need to wake up and accept th=
at=20
                  the U.S. is not an island and is rapidly losing its leade=
rship=20
                  in the global economy." </P>
                  <P><STRONG>Larry:</STRONG> "Outsourcing outside the borde=
rs of=20
                  the U.S. is a natural extension of the common business=
=20
                  practice of moving operations to less expensive areas wit=
hin=20
                  the U.S... So why all the outcry now? I think it's becaus=
e the=20
                  work is going to India and people are prejudiced... I hav=
en't=20
                  heard anyone say that they're willing to pay higher price=
s so=20
                  that the jobs can stay in the U.S.... There's a big disco=
nnect=20
                  between people's ideals and their pocketbooks." </P>
                  <P><STRONG>Deb, a software company executive:</STRONG> "T=
he=20
                  real issue to me is... the level of anger that we are wil=
ling=20
                  to direct at another human being has grown dramatically.=
=20
                  Perhaps it's because we interact more at a distance, due =
to=20
                  the Internet, e-mail, cell phones, etc., so we can dehuma=
nize=20
                  the person receiving our anger. As a country, we can no l=
onger=20
                  have a civilized discussion about many issues=97economic,=
=20
                  religious, or political. We've become a nation of extremi=
sts,=20
                  starting at the top... Thank you for attempting to hold a=
=20
                  civilized discussion." </P>
                  <P><STRONG>A reader from Canada:</STRONG> "I admire your=
=20
                  ongoing attempt to bring intelligence to bear on the=20
                  outsourcing question, but I fear you are doomed to failur=
e...=20
                  The responses which you have received... are bigotry, pur=
e and=20
                  simple.... It is strange that a technology writer has bec=
ome=20
                  such a lightning rod on this issue when many blue-collar,=
=20
                  non-tech jobs have already been lost.... The bottom line=
=20
                  is=97globalization is not something that will happen=97it=
has=20
                  happened. The world's greatest capitalist nation can whin=
e=20
                  about it or adapt." </P>
                  <P><STRONG>A reader from Hong Kong:</STRONG> "Outsourcing=
jobs=20
                  to more competitive India represents not merely America's=
=20
                  generosity to the less-well-off, it actually benefits=20
                  Americans overall. This is the clear conclusion of every=
=20
                  serious economic analysis... from [19th-century British=
=20
                  economist David] Ricardo to [Columbia University economic=
s=20
                  professor Jagdish] Bhagwati. Of course, I live in a place=
=20
                  where such understanding is the lifeblood of our prosperi=
ty.=20
                  Perhaps the U.S. electorate should travel more." </P>
                  <P><STRONG>Patricia from San Diego:</STRONG> "To think th=
at=20
                  other countries in the world would not want to capitalize=
on=20
                  technology and provide jobs for their own citizens smacks=
of=20
                  hubris... Having worked for a company that suddenly close=
d its=20
                  doors and put 70 people out of work, I understand the ang=
er=20
                  about being laid off... My only hope is that as these gro=
wing=20
                  economies really begin to flourish, the wages, health car=
e and=20
                  standards of living will improve and eventually it will a=
ll=20
                  even out. Our bigger-is-better lifestyle may be lowered a=
bit,=20
                  but won't we all be better off in the long run?" </P>
                  <P><STRONG>Another reader from HP:</STRONG> "I've trained=
my=20
                  replacement once and may be forced to do it again. The fi=
rst=20
                  time I found work in another section of the company. This=
time=20
                  I may not be so lucky. And yet... protectionism is not th=
e=20
                  answer. See how well it served Japan. We now live in a gl=
obal=20
                  economy. To think anything different is suicide." </P>
                  <P>Koushik, who runs an investment advisory firm in India=
: He=20
                  notes that Singapore's prime minister was recently quoted=
in=20
                  FORTUNE Asia worrying aloud that smart people elsewhere a=
re=20
                  willing to work harder and at lower wages than people in=
=20
                  Singapore, and admitting that is a big problem for his=
=20
                  country. "The U.S. political leadership... doesn't want t=
o=20
                  give this same bad news to their people... If [people in =
the=20
                  U.S. understood that] they would be saving like crazy rat=
her=20
                  than buying huge mansions, SUVs, and going deep into debt=
."=20
                  </P>
                  <P>This is not a message that will be well received in th=
e=20
                  U.S. </P>
                  <P>Finally, perhaps my favorite letter came from Cindy in=
=20
                  North Carolina. In total, it read: "Good column. I love y=
our=20
                  spunk!" Thank you, Cindy. </P>
                  <P>Sorry I can't respond personally to all your great let=
ters.=20
                  </P>
                  <P>
                  <HR>
                  By the way, if you're not a subscriber to the email versi=
on of=20
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e">www.fortune.com/fortune/sub-unsub/subscribe</A>=20
                  and sign up. It's free. And then don't hesitate to let me=
know=20
                  what you think.=20
                  <P></P>
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