Commentary: February 2005

Yet despite Thoreau’s valuable insights, much of his questioning of the life he saw around him in a society beginning to go through the first stages of the Industrial Revolution was a direct argument against what he read in The Wealth of Nations about the division of labor and the involvement of too many people in one’s economic life.

Moving on to today’s concerns about globalization and outsourcing, please realize that globalization worries in the computer industry loom large for those involved in information technology, but not necessarily so large for others. Our influence on thinking in the U.S. is great because Internet linked computers increase globalization. Efficient global communication has accelerated globalization more than any other factor. In this sense if there is a problem, we cause it ourselves.

The problem is not differences in labor costs. People in other countries would subcontract work from me for less than one third of what I pay here. However, ease of training, personal contact, and language difficulties give those in the U.S. an edge. I have plenty of contact with people in our field in other countries because people come to us from the whole world for training in our type of design work. Many could work with us in one way or another. However, aside from some lemmings following trends off cliffs, most business people stick with local, more predictable, labor. So why is there a problem?

We were nostalgic for a brief time of computer operator shortages, before everyone began to be computer trained. In that time we got huge salaries because we could run Microsoft Office and actually could make CAD software work. Some of us could even handle networked computers.

Look, this stuff isn’t that hard. Our outfit trains CAD operators through distance learning. The cost to the student is around $1,000. Do you really think we’re ever again going to be able to ask for BMWs and other signing bonuses simply because we can draw stuff on screen, do a few renderings, and maybe do some finite element analyses?

It’s supply and demand, baby. Forget foreign workers. You don’t have to work for what they’d work for. Just realize you can no longer get paid out of proportion to the amount of training needed to create your replacement domestically now that the supply side is up. We pay three or four times what we could pay an Indian worker, but you cannot expect us to pay 10 times. Adapt.

In the 1900s the U.S. started losing textile mills and shoe factories. This labor-intensive, low-skill work was inevitably heading offshore, yet there are still people in these industries surprised that they are losing jobs. But it is important to understand that this is a very narrow view of what is happening. We complain we lose jobs to low labor cost countries and it is not “fair” and that we “cannot compete.” What we often do not hear is that they are complaining that they are losing jobs to the lower labor requirements of our automated production. The lesson here is that everyone worldwide needs to remain flexible and view change as an opportunity rather than a problem.

Globalization may mean we must re-create our businesses. Our markets once were local, or at best national, now they are worldwide. In my business I’d starve if I depended on my local market. We used to fight for a national market. Now we easily get a global market. We must accept change to take advantage of that.Globalization offers two choices, embrace it, or blame it for your failures. Personally, I’ll embrace it.

Thomas A. MacNaughton heads a major yacht and small commercial craft design firm in coastal Maine. Learn about the worldwide marketing of his team’s design work atwww.macnaughtongroup.com. Send you thoughts about this commentary via e-mail c/o [email protected].