Saturday, August 23, 2008

Some links of interest

1) A couple of weeks late, a link to a Thomas Friedman column that discusses energy. Friedman is poking holes in McCain's pretense to being a principled leader in the field of renewable sources of power (have you been watching the Olympics? Are you convinced yet that John McCain is "the original maverick," ready to lead, with the final shot of the commercial available for the face of the new five-dollar bill?).

What's interesting here is this quote:
Both the wind and solar industries depend on these [tax] credits — which expire in December — to scale their businesses and become competitive with coal, oil and natural gas.
(The column is critical of the OM for missing vote after vote on this crucial legislation, despite his support of massive subsidies for the nuclear power industry.)

Of course, no question is raised as to why the American people should be helping these industries at all. If they are the future, ready to generate millions of new jobs (according to both candidates), then what the heck do they need subsidies for? Doesn't this kind of legislation simply create another welfare industry, dependent on the people to smooth out the risks that are inherent in new technology? After we have helped the wind and solar industries get competitive with Big Oil, do we get to charge them higher taxes to pay us back for our investment?

2) I apologize for losing my original source for these two links; I suspect it was Citizen Carrie (if not, I humbly beseech forgiveness).

The first is an article from that cites a study that offshoring continues to increase in the financial industry, with India joined by China, Russia, and Brazil as hot areas for growth. Despite problems with rising wages, greater competition for talent, communication problems, and time zone differences, the numbers are just too compelling, the savings too big to ignore.

At the same time, as this article shows, the large Indian outsourcing providers will have to up their revenues or lower their headcount if they're to get their revenue per employee up to the standards of IBM, Accenture, or EDS. This lower productivity is seen as limiting the ability of Tata, Infosys, and Wipro to compete.

If we're squeezing American workers by sending jobs overseas, and squeezing Indian workers by lowering their headcount to generate expected financials, who does benefit from these trends?

3) An interesting post by Dean Baker attempting to debunk the idea that our growth in inequality comes from the differing returns enjoyed by those who are educated and technology-savvy over those mired in the old economy. I don't entirely agree with the scope of his reasoning, I think the situation is more complicated than this, but it does contribute to the discussion. Many people are simplistic when they think about things like trade agreements and visas, and the thought processes need to be broader.


Citizen Carrie said...

I had to look through my posts, and, yes, I had lifted those links from the Dice board.

Ron Hira has an interesting theory about consulting groups that are forecasting ever-increasing rates of offshoring. He said a lot of these consulting groups also pick up a lot of business by helping companies offshore, so their predicted future trends become somewhat self-fulfilling prophecies.

A company's use of productivity figures has always been a mystery to me. Just strictly in the US, I've known of some small plants that could heavily outproduce sister plants in other locations. (For example, a Detroit-area plant may be more productive than a northern Michigan plant.) However, productivity sometimes doesn't enter into the equation when it's time to sharpen the budget axe. Since we don't have the luxury of looking at all of a company's figures, we never know for sure if increased productivity offsets the higher wages.

Androcass said...

And, of course, the whole business of measuring productivity is fraught with difficulty. Few of the "softer" professions in business can be evaluated on the basis of productivity. In the field I know best, software development, some corporate stooge is always trying to count lines of code as a proxy for productivity. Let me assure you that those people never like hearing that the goal, especially once a project is in maintenance mode, is to reduce the number of lines.

Management/leadership is another area not very conducive to measurement. I worked for a guy who demonstrated no leadership at all, so I, as a senior person and team lead, had to pick up his slack. Since this same "manager" was the one writing my review, how much credit did I get for doing his job; even if I had received some credit, how would that figure into any metric for my personal productivity?

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