Sunday, February 22, 2004

Meet the Zippies:: THOMAS L. FRIEDMAN on outsourcing. Describing Bangalore:

"Taking all this in, two things strike me about this outsourcing issue: One, economists are surely right: the biggest factor eliminating old jobs and churning new ones is technological change — the phone mail system that eliminated your secretary. As for the zippies who soak up certain U.S. or European jobs, they will become consumers, the global pie will grow, and ultimately we will all be better off. As long as America maintains its ability to do cutting-edge innovation, the long run should be fine. Saving money by outsourcing basic jobs to zippies, so we can invest in more high-end innovation, makes sense.

But here's what I also feel: this particular short run could be a real bear — and politically explosive. The potential speed and scale of this outsourcing phenomenon make its potential impact enormous and unpredictable. As we enter a world where the price of digitizing information — converting it into little packets of ones and zeros and then transmitting it over high-speed data networks — falls to near zero, it means the vaunted "death of distance" is really here. And that means that many jobs you can now do from your house — whether data processing, reading an X-ray, or basic accounting or lawyering — can now also be done from a zippie's house in India or China."

If protectionist means such as taxes, tariffs, greater unionization, or others are used, it will hurt the US.

If the US continues to fund innovation and also helps support the infrastructure of life-long learning, we have nothing to worry about.

I've said this to spoiled brats on Slashdot many times: if you find yourself out of work, get a better education, work harder, compete, and reap the rewards. If you need a part-time job at McDonalds to make it happen: tough. If you lost your job to outsourcing, you are not nearly as valuable as you think you are, and our economy is better off now that your former employer can better spend your former wages!

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