I ran across this insightful article in the New York Times about the state of gadget manufacturing in the world and why the US has lost out to China and other Southeast Asian countries. In short, the premise is that beyond the cost of wages, other factors play a big role in the decisions made by tech firms: the locality of the factories, the efficiencies of the supply chain, and speed of the turnaround are competitive advantages that have made Shenzhen the capital of electronics manufacturing.
And it’s a bold assertion: Apple could move its manufacturing back to the United States and not necessarily take a huge hit on profits, but they remain China because of the slower pace of the American manufacturing sector. It’s tiptoeing a fine line between not being all about the money but instead about speed and scrappiness, but stops short of recognizing that it comes at the moral cost of unfair labor practice.
In technology though, there has been another outsourcing movement, but it’s remarkable how it did not succeed in moving an industry overseas. Remember the software development outsourcing crisis a few years back? Students were avoiding computer science and related majors1; the general wisdom was that software jobs would be migrated to Indian and Chinese firms abroad, and those of us left in stateside would be fighting for software scraps. Nowadays, all we hear is the incredible demand for engineers and the industry’s bright outlook for the next decade.
Of course, knowledge work requires a different skillset than assembly line work, and indeed companies report that the biggest problems in working with outsourcing firms center around communication, the lack of autonomy and software quality. Communication aside, I don’t think American software developers are somehow innately more creative, self-independent and produce higher-quality work. Other countries are producing graduates at a higher rate and with comparable education and abilities, and from sheer numbers alone, it’s actually possible to match the famed 10x engineer by hiring 10 engineers abroad2.
But the tech industry continues to thrive, and the same factors that make Shenzhen such an attractive place to build gadgets make Silicon Valley a mecca for software development. This is especially true of startups, which specialize in moving quickly, reacting to customer feedback, and leveraging efficiencies via open source projects. Software projects built and managed abroad lose these aspects; it’s not that overseas engineers aren’t talented, but they’re too far away – physically, culturally, and of course linguistically – to enjoy the same ecosystem3.
It used to be that manufacturing was celebrated as an individualistic, creative affair. Something that, post the industrial revolution, we now call craftsmanship. The assembly line programming model has yet to displace coding artisanship, but we shouldn’t get complacent – the current trend has us fixated on creating software for the ourselves, cloning the same few ideas that are relevant to city-dwelling, middle-class latte-sippers. As markets and opportunities open up in other countries, the relevance problem is reversed – engineers and designers here may be ill-equipped to solve problems facing foreign users and cultures.
This was while I was in school, where I witnessed the dotcom fervor give way to disillusionment and eventually abandonment over the course of four years. Glad I stuck it out, though.↩
No, I don’t really think locking 10 mediocre/crappy engineers in a room would produce the next git.↩
Not to mention lacking same motivations that drive startup’ers to go the extra mile; it’s not like outsourcing firms are receiving equity, and Asian cultures emphasize big-company stability anyway.↩