Retraining the American Worker in the Face of Offshore Outsourcing
$300. A software consultant in New York will typically demand this for 3 hours of his time. This is also an average monthly wage for a software engineer working in Makati in the Philippines.
This is a huge difference. In the past, a highly skilled engineer in Manhattan could be comfortable charging this. With some effort, his work could be translated into quality software that would improve the productivity of his employer.
An engineer in Manhattan also feels justified to charge this much. Rent in New York City is not cheap. A 1 bedroom apartment in the West Village can easily cost $2000/month. After factoring in the high cost of living and the need to repay expensive college loans, usually not much is left over from these high billing rates.
To remain competitive, more and more companies are looking into the cost savings available through outsourcing. At the same time, there more than enough offshore accomplices ready, willing, and able to help them.
"...there is no reason for such a low-productivity activity (programming) to remain here." Philip Greenspun 11/03/2003
Philip Greenspun teaches programming to America's future elite engineers at MIT. His writing has served as an inspiration to a new generation of engineers interested in the technology and collaboration potential of the Internet.
The above comment was in response to a question about whether an experienced engineer should undergo retraining, in the face of pressure from overseas.
His answer is brutally honest, and mixed with a hint of sarcasm and elitism. He continues by pointing out that the skills of motivated and intelligent American engineers will always be required. However, the role of these engineers will not be quite the same as in the past.
What is the new role of the American Engineer?
Phil Wolff who writes "A Klogg Apart" has suggested a series cases where the American engineer will still be required. He remarks that many of these roles have analogs in the steel industry:
- "high touch", like requirements professionals;
- cultural sensitivity, like localization and UX pros;
- proximity to systems, like the overnight sysadmin who has to physically touch a box, but with skills not much more than a cable installer;
- world class niche specialists, being the world's best in corrosion algorithms, or the only people who understand documentation of military control systems in a Czech, Russian, and Spanish blend;
- content creatives that use IT for artistic and aesthetic expression that resonate with world markets;
- teams that use proprietary tools to achieve 10-fold leaps in productivity over developers using off-the-shelf and open source tools;
- work allotted via nepotism, pork, graft;
- legacy system specialists, caring for dinosaurs until the business need for them evaporates;
- coordinators that can rapidly assemble the talent needed for a project and provision them with the tools to work together; and
- managers that plan and deliver outsourced projects.
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