Talk:Lecture 8

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Out Sourcing

Lin Huang Yes, I couldn't find Out Source topic either. I also want to drop couple of notes what I am thinking of. 1. U.S: there are less kids interested in Science and Engineering, and more interested in Sports, Recreation. I think there are several parts of it: a) Environment and Culture. In China, the culture is education. Every family will put all they can to put kids through high education. Although, in history, kids are more book learning, which I see a big drawback. In U.S. a lot of commercial, and more capitalism. At TV, you saw a lot of celebrity: either Sports figure or movie star, a instance celebrity by reality show. I haven't seen much of celebrity of Science. b) It relates to the advanced level of a Country and Living Standard. This is the reality: when people are hungry, they will easy to make criminal acts: like rob, steal, to maintain their basic life needs (not hungry). When people have enough food, they want to make other parts of the life better. When People have enough Money, they want more power and being famous, so, they tends to go public and seeking public service. Same as education and the view of life, when kids have everything at home, especially have a lot of money, they will have less motivation to work harder. They tend to gravitated to the nature than labs or office. There is a phrase saying that life is a cycle. Somes a lot of things go cycle. When our ancestor living in the cave, it will be a wonderful step to live in a men-made shelter. When you have everything, you would like to taste the nature, and more interested to live simple and being able to self sufficient.

Anyhow, I think for kids to be more interested in Science and Engineering, there need the right environment -- espeically the public TV, radio etc; They need to have the right idol and right inspiration.

Just as we can influence, but, still should let kids to choose their future and career. Everyone's choice is equally important, no matter they choose Since or Recreation. Everyone's view to the world is different, and the meaning of fullfilling the life is different, and no matter which one, they are all equally important.

All we can do, is doing our best to create the right environment, to inspire the kids from young for the love of Science and Engineering. and create more idols in Science then those movie stars, or sports starts.

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Yenny Rusli Those are interesting point. Kiran's last point is also interesting. I agree with the speaker that outsourcing is unavoidable. He then explained that it takes time for U.S. job market to stabilize. But what will happen in between those 2 phases, though?

Distracting the discussion a little bit from technology outsourcing, an older form of outsourcing has happened between U.S. & 3rd world countries: in clothing. Many U.S. companies manufacture their products in other countries and then ship them to U.S. after labelling them with their brands, & so they save some money in labor, raw goods, etc.

Some companies tried to keep manufacturing them from U.S & not doing the outsource. An example is Levis jeans. However, Levis found itself couldn't compete with other brands. Hence, they were "forced" to also outsourced their jeans production.

Back to the technology outsourcing, will it ever happened as well that technology companies in U.S. will have to outsource their labor or else they can't compete with others & so withers away? Maybe IT jobs in U.S. in the future will be just those who are at the executive level, who manage those workers spread all across the world?

Patrick Haluptzok Part of the problem is an overvalued dollar - Over the long haul there needs to be a balance of trade, right now the U.S. dollar has been propped up by foriegn investors buying US stocks, bonds, real estate and now IBM's PC division in exchange for their manufactured goods and services. This demand for U.S. assets will likely decrease as other economies such as Europe, China, Russia and India keep becoming more stable attractive investment havens - and the amount of US assets these countries want to hold likely has a limit. So I think we will see the US dollar continue to fall eroding some of the artificial cheapness of doing production abroad.

But fundamentally the amount US employees get paid will have to either decrease, or the pay abroad increase to a comparable rate to make the US competitive for anything that can easily be done abroad. India, China, etc now have the political stability and education base such that in a free trade world it's very attractive to produce there.

Diwaker: I think it will be a while before this happens in any sensible manner, unless of course there is some kind of an economic meltdown. Even today, the US dollar is worth an order of magnitude or two more than say Indian or Chinese currency, and the current rate of erosion is not significant. Further, the "erosion process" itself is extremely volatile and subject to a variety of factors, many of them apparently uncorrelated (consider the impact of the Olympics, for instance, on stock trading and currency values). And simply scaling the salary won't do, the cost of living has to scale appropriate as well.


U.S./India relative productivity

Kiran Kalyan er...i don't know if this is the right page to start this discussion...but i couldn't find a separate page for the "Outsourcing" section of today's lecture. First off, the Professor made a great presentation and the Q&A session after that was quite interesting,too. One major issue on which I disagree,though, is his assertion of the differences in productivity between the United States and India. What was he using to measure this productivity? Which time period was this measurement based on? For such a direct comparison, I would think that conditions of work would have to be nearly identical. In such a situation, I assert that India's productivity may be as low as 1/5 that of the US(on an average, lets say 1/3) but not as low as indicated on the slides,especially for a job like data entry. Biotech research - its possible , mainly due to lack of infrastructue but not for data entry. I wish we were given the source and methodology of these comparisons during the lecture itself. Howeve, most of the points he made rang very true, especially the parts about supporting outsourcing in order to build on world trade and actually attract more business Stateside.Nice!

Ted Zuvich: I don't think he was trying to say that the ratio was actually 1:5 (although I would also like to see the sources). I think the point was that it was different, and probably smaller. Sounds like he is convinced that outsourcing is going to happen, and that you (as an IT professional) had better be ready for it.

Walker : The numbers he gave in the lecture were arbitrary and just given to illustrate the concept of comparative advantage. It is unlikely that the U.S. really has any significant productivity advantage in an activity like "data entry", but to illustrate the larger point he threw out some numbers.

(User: John) I am not yet convinced that outsourcing is the only way to go. I am sure that the World Trade Organization would like to make the decision for all of us in America, but in the end it will be the U.S. electorate that will decide its own fate. The politics regarding one's livlihood are rather volatile, and what seems obvious today may not seem so obvious tomorrow. Nationalistic economies and high tariffs have been alluring sirens in the recent past. They may come back, again.

Jack Richins: And there are examples of others protecting an industry relatively successfully. Like rice growers in Japan - they have quite a bit of political power in Japan and have done well at protecting their earnings.

But it's not without a cost. How much more productive would Japan be as a nation if they stopped supporting rice growers and left rice to the free market? Rice would be cheaper, taxes would be less and they'd have more workers to fuel other industries.