Are We Outsourcing our Creativity?

By Mark Clarkson

We’ve come to accept that mechanical, low-skilled work goes wherever the moment’s low-cost opportunities are found. But the notion that we could outsource the grunt work and keep the creative work at home now seems a little … naïve. If you outsource the manufacture of your laptop computers to an overseas firm, it would be foolish to presume that firm isn’t learning a lot about making laptops, and getting a few ideas about how they might improve upon it, too.

“Smart people and governments realize they need to move up on the product development food chain if they’re going to be playing in this game in five or 10 years,” says Joel Delman, creative director of Product Development Technologies’ California office.

  That means getting away from 50-cent-an-hour assembly work,  and getting into the more creative, front-end work. And many emerging economies are investing heavily in just that. Way back in 2005, Businessweek reported that China was graduating some 10,000 industrial designers a year, and growing. 

  According to Chen Dongliang, director of the Beijing Industrial Design Center, there are about 250,000 people working for design firms in Beijing alone.

“Beijing is also expanding technology service and high-end manufacturing industries,” he says. “Both of them can help boost the industrial design sector.”
That’s a lot of new designers.

  Free Engineering
“We not only do engineering,” says Delman. “We also help clients do the front-end research: what they should be engineering at the end of the day, and how to make it not only aesthetically compelling, but functionally and ergonomically suited to its markets.”

  In the last two years, he says, his firm has seen a “threatening” increase in the overseas offerings at the front end of the process.

“Our Asian vendors, who used to focus primarily on tooling,  manufacturing and assembly, are starting to offer very inexpensive engineering services with the purchase of tools,” Delman explains. “They say, ‘You buy the tools from us and we’ll also engineer the parts for you for free.’ The cost might be amortized into the cost of the tooling itself but, for all practical purposes, it becomes free.”

  These services can include anything up to and including taking your rough design all the way through to final manufacture, he says. “The skill sets these vendors are bringing to the table is quite high,” he adds, “provided the product isn’t too complex or specialized. Particularly with electronics, it’s becoming more common to outsource these kinds of services —  which cross the line between technical and creative — to China, to India and,  these days, even to Vietnam.”

  That’s My Idea!
It’s hard to compete with free, but things may not be as grim as they seem. Even at bargain rates, not everyone is rushing to outsource their creative work. There are good reasons to hesitate; foremost among them is the issue of intellectual property.

“We know the Chinese knock patents off without thinking twice,” says Delman. “One of the ways they’ve gained expertise is by forming partnerships with various American and European companies, taking the knowhow,  then saying ‘Thank you very much,’ and doing it themselves.

“It would be very scary to me to trust a firm in China or India to help me come up with the latest and greatest. Are they going to ]generate]  great ideas, but then act on those ideas themselves, the minute we walk out the door?”

  Cultural Differences, Pros and Cons
And there are more subtle concerns. How well do overseas designers understand the needs of the American consumer? “The Japanese are an incredibly consumer-oriented society,” says Delman. “They’ve got products on their mind all the time. But many people in China and India are quite isolated in understanding what a market like America is looking for.”

  Isolated or not, different cultures have different tastes,  which helps the American designer designing for the American market, says George Brown, CEO and co-founder of the strategic consulting firm Blue Canyon Partners, Evanston, IL. Take cars, for example: Designs vary widely among those found in the U.S., Europe and China.

“Ten years from now, I guarantee there will be a Chinese auto manufacturer producing cars in the U.S, and hiring U.S. design engineers to appeal to the U.S. consumer, who has different tastes—and probably always will have different tastes—than the Italian consumer, the Chinese consumer or the Indian consumer,” Brown says. “You see it across the board, in product after product, whether it’s cars or entertainment or personal care products.”

  Moving up the Food Chain
We gain some hidden benefits as emerging economies move up to more sophisticated work. The closer a country gets to the top of the food chain, the less competitive their salaries become. Designers and engineers are well educated and expect to be well paid. The price differential is much smaller than it is in manufacturing. The playing field may not be level, but it’s not nearly as tilted.

  Furthermore, better paying work leads to more highly paid workers and an emerging middle class. This middle class, in turn, drives an increase in consumer markets within the country; the country becomes increasingly focused on its own needs. That’s good news, says Brown.

“Five or 10 years ago, the only employment for an Indian or Chinese design engineer was as an outsourced employee of an American, European or Japanese company. Now, there’s an awful lot of design and engineering work that has to be done for Chinese and Indian companies … and soon Indonesia and other developing countries,” he says. “These countries are beginning to have a middle class that is expecting a higher level of products.”

  Where these countries were once a source of low-cost manufacturing, he says, they are now genuinely vibrant markets with companies beginning to compete on the world stage.

“I think these markets are going to grow faster than the outsourcing of labor that doesn’t have a local opportunity,” says Brown. “We’ll eventually recognize that it genuinely is a global market. Not all the consumers are located in the U.S. and Europe, and not all the cheap sources of products in the emerging markets are focused on Europe and North America.

“There will be very good opportunities for the young design engineer in the U.S. or West Europe,” he adds, “but they’ll be different than 10 years ago, when we were one of the few places where that profession and that expertise really mattered.”

  Staying Competitive
You should definitely continue to invest in yourself and your own capabilities. “Those who distinguish themselves through creativity and advanced capabilities are going to thrive,” says Brown.

  Despite the globalization of markets, there are still a lot of opportunities at home.

“We are still the No. 1 manufacturing location on the planet,” he says. “The press makes us think we’re down to our last three manufacturing jobs, but we still manufacture more here than in China or anywhere else.”

  And all that manufacturing, Brown says, requires underlying talent in everything from basic research to engineering and design, to the operations associated with everyday factory process control and process operations.

“The U.S. is going to be the biggest market in the world for the next 10 or 20 or 30 years,” he concludes. “Being in a position to do a good job for business and consumers in the world’s largest market is a key success factor for every firm we work with.”

More Info:
Beijing Industrial Design Center
Blue Canyon Partners, Inc.
Product Development Technologies

Contributing Editor Mark Clarkson is DE’s expert in visualization, computer animation and graphics. His newest book is  “Photoshop Elements by Example.”  Visit him on the web at markclarkson.com or send e-mail about this article to [email protected].