Leaving Only the Handloom Weavers Behind

I've been following up on the Pele-Ronaldo thing over at fistful. I am surprised how many Europeans don't seem to think that this is their problem. People are still thinking about the dull and stressing Call Centre work, and are thinking of this as any old part of services. But I'm not talking about most of the service industry here, just the high value end. The service industry in labour intensive work like care of the aged, cleaning homes etc will certainly grow in our economies, probably with this being done by (undocumented?) unskilled immigrants coming in. The point is this: Stephen's arguments are not the modern equivalent of the luddite machine breaking: nowadays the machines are moving leaving the handloom weavers behind. The labour market is being outsourced from the head downwards. This is what is different.

The next move seems to be biotechnology, and, of course, don't forget Bollywood. I'm not against, I'm only saying our societies are going to see important structural changes: Europe as much as the US, and that it is reasonable for people to want to talk and ask about this. Turning up the volume, blaming the Bush tax cuts for everything, and saying that anyone trying to take a more critical look is a protectionist just won't wash. At least not in my book.

In the past, the US was thinking of patents and the protection of intellectual property (I guess that some would say that this is also protectionism under another name, but there are arguments either way here). But then you look at Huawei and Cisco, and see that Cisco just settled out of court to what appears to be Huawei's advantage (see yesterday's post about Clay Chtristensen's Innovators Solution and the problem of not respecting 'not-good-enough' competitors sufficiently) . Copy protection doesn't seem too effective nowadays either, so I'm asking: where's the leverage? Meantime in the mailbox two readers, one in California, the other in Argentina seem to confirm my impression.

An interesting fact my girlfriend mentioned to me:

So what has happened to all those Indian engineers kicked out of the US when their H1B's ran out and their companies could no longer retain them? Some, no doubt, have gone back to India. But the rest are apparently moving to Taiwan. She says a number of friends have mentioned to her ways in which this is becoming obvious, not just what
the business people are saying but also anecdotes like how the flights into Taiwan are crowded with Indians. I have no idea how well Taiwanese society would cope with a substantial influx of foreigners, but they don't appear to be as insular as Japanese.

Another interesting factoid. Last night I had dinner with my sister's husband, who owns an ISP in South Africa (and lives there) and was here visiting an ISP trade show. He is here trying to sell software written by his colleagues in South Africa to manage networks --- user management, security, traffic shaping, that sort of thing. This is a market dominated by people like Packeteer (whose headquarters are right opposite the Apple building---I walk past them every day on the way to work). However with South African wages (both for engineers and execs)) being so much lower than the US, my sister's husband is just astonished at how much better a deal their software is than the US competition. (Technically he says they are much the same and I've no reason to doubt him.)

There really do seem to be so many indicators that the US is living in a cloud-cuckoo-land. On the one hand there's willful stupidity (like throwing out good engineers, and making it ever less pleasant for foreigners to want to work here), on the other there's a remarkable ignorance of how competent the rest of the world is. Unfortunately for
the rest of the world, I'm not sure the US is culturally ready to accept this. I foresee an awful lot of blaming everyone else in the world for the coming problems at home; and an awful lot of vindictive and petty military and economic actions to try to keep other countries in "their place".

and from Marcello in Argentina:

Actually, I'm as engrossed by the unfolding stories on China and India as I expect to be with your take in Argentina. Besides the fact that I know much less about China and India (and therefore most information is new and interesting), I expect that, let's say 15 o 20 years from now, what I will be working on, where, how and for how much will be heavily influenced by what happens or doesn't happen there in the future. I currently work on IT, science and education, and they all look like they are fast becoming tradeable services - there are interesting opportunities involved with the expanded markets, of course, but I confess that I find the threat of commoditization somewhat disturbing. I'm not even 25 and I'm already facing possible obsolescence...