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Outsourcing the Future

This strikes me as an important indicator:

Pasadena news site outsources local government coverage to India
PASADENA – The job posting was a head-scratcher: “We seek a newspaper journalist based in India to report on the city government and political scene of Pasadena, California, USA.” [...] Outsourcing first claimed manufacturing jobs, then hit services such as technical support, airline reservations and tax preparation. Now comes the next frontier: local journalism.

The editor who ran the ad argues that, since the Pasadena city council now puts its meetings online, reporters covering the city can be anywhere. And while this particular example may not hold true this time around -- city governance is more than city council meetings -- it's clearly going to be possible at some point soon.

Of course, the editor's job isn't going to be so stable, either. Whether because of automated selection software ("botsourcing," as with Google News) or social filtering software ("crowdsourcing," as with Digg), specialized editor skills are of declining value. And there's really no reason why editorial duties couldn't be outsourced, too. Add in remote collaboration and presentations, and the same will hold true for lawyers, accountants, even (gulp) consultants.

The combination of increasingly smart software, social network-based activities, and highly-educated low-cost workers around the world looks likely to hit knowledge workers as hard -- if not harder -- than previous waves of automation and outsourcing have hit ostensibly less-skilled jobs. Botsourcing/crowdsourcing/outsourcing knowledge work may turn out to be a very attractive option, given that these tend to be higher-paying jobs. Ironically, it's entirely possible that the carbon footprint of shipping may add so much cost to outsourced manufacturing that those jobs get re-localized, whereas the knowledge jobs (needing only an Internet connection) end up being globalized.

So are we headed to a world where the only stable jobs are those that absolutely require hands-on contact -- health maintenance, grooming, and the like? Or to one where wages even out across the world of skilled workers? Neither strikes me as terribly appealing or stable.

In the past, economic transitions that resulted in lost jobs inevitably led to arguments that such losses were transient, as new technologies and industries would be opening up, and new skills would lead to new jobs. But that argument rests on the assumption that there were categories of work that couldn't easily be de-coupled from the workers, because of highly-specialized skills. In a world where the only job characteristic that can't readily be de-coupled is proximity, is it even possible to come up with new jobs that can't immediately be shipped out or chipped out?

This, coupled with the likely rise of molecular manufacturing over the next 20 to 25 years, strikes me as a key early indicator that we're shifting into an entirely new kind of economy.


Sounds like what political economists have classified as the shift to post-Fordism, most obvious in the development of a Schumpeterian model of the state.

Some of wikipedia's stuff on post-Fordism (especially neo-Schumpeterianism) bears a passing resemblance to the idea of 'Waves' that you no doubt encountered when working on the Transhuman Space stuff, so I'm going to assume that you already have a cursory familiarity with it.

If not, check it out.

Kevin over at the Evolving Excellence blog moderated a panel discussion at Kellogg the other week on Onshoring and China. Let's see if I can find it...


Perils of China:

But foreign companies are moving here, even in big steel:



I think your observation about the likely re-localisation of manufacturing is quite persuasive. However, I have a feeling you're a bit off target with your subsequent point: while stable jobs for all but the most worker location-dependent tasks may come under threat, my guess is that the economic well-being of the successful knowledge workers will actually only continue to follow a power-law curve, with the richest continuing to get richer.

Knowledge workers don't get hired only for what they know or what they can do, but also for who they know—and, as Clay Shirky long since pointed out, winners take all in social networking. Why do people with great networks get hired? Partly through plain old nepotism, of course, but also because who you know effectively increases both what you know and what you can do by enabling you to outsource task fulfillment across your uniquely-valuable network.


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