1997: a glimpse on globalization
(this is an account, written in June 2006 and found in one of my archives tonight, of something that really happened to me, exactly as described below, in the spring of 1997. I’m publishing it because I believe that this rambling about the “future”, while not being very original anymore, complements well something else I posted about the future earlier today: Never mind the debt! What matters is EROI)
Once upon a time, we produced the material goods we use. Now just look into any western world house and try to remove mentally anything that was not manufactured locally.
Chances are that the house will be half empty after that. Of course, before globalization, it would have probably been even emptier, and crowded by three or four times more people.
So apparently we are much better off now, and the fact that we depend on other countries for most of what we eat, wear or play with doesn’t really matter, since control (as in intellectual and design property, and high-tech key industries) is still in North America, Japan and Europe.
The question is, for how long?
True story: the year 1997, in that Engineer’s Eden known as Silicon Valley, was still a full boom period. NASDAQ, salaries and job opportunities going higher and higher every day. It was a very exciting time, and one would feel every second to be where big things happen.
In the spring of that year I spent some time in a local, small telecom company. On a nice day, that company was visited by the director of a Design Services firm. This guy came to explain how the telecom company could save time and money buying some already available parts of source code from his firm, rather than rewriting them from scratch.
Absolutely standard and very sensible practice so far. The shocking part (for me, of course) was his proud explanation that the cost was low because the company had only marketing and top managers in Northern California. The real design work was being done in India, where wages are much lower.
Of course, Indian engineers are certainly very professional, and cheap as they are by Western standards, they are certainly much better off than almost everybody else down there.
Furthermore, this is probably still the only realistic way (at the beginning, at least) for these countries to improve their living standards, and soften a bit their huge foreign debt.
What was shocking was realizing (in 1997, remember: in full NASDAQ boom), how computing had actually already moved the “manufacture where is cheaper” approach one step higher, from shoes and soccer balls to purely intellectual, high tech work.
The point of this anecdote is that we can’t say anymore “we westerners can afford faster processors and better computers than all the developing countries together, so we still rule”.
We have to start using all this power in a much more efficient and smarter way than we’ve done so far, because it won’t last long otherwise.