Can Silicon Valley Stay Relevant?

from the moving-overseas dept

An interesting article predicting that Silicon Valley is going to have more difficulty staying relevant as more jobs continue to move overseas towards cheaper labor. On a related note, Kevin K submitted this interview with Craig Barrett from a couple weeks back, where he talks about moving jobs to Asia for the sake of finding better educated (read: cheaper) employees. This argument has come up many times over the years, and both sides seem to make sense. The reality, then, is probably somewhere in the middle. Clearly, cheaper, well-trained labor elsewhere is a draw for companies. However, part of what made Silicon Valley work so well was the unique infrastructure and support system that was built up around here. I’m not saying this can’t be replicated, or that things won’t be different in the future, but people who tend to focus on how one factor is going to drive huge economic changes tend to miss the really important stuff.

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Comments on “Can Silicon Valley Stay Relevant?”

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dorpus says:

Re: No Subject Given

Yeah, so there is a stampede on to outsource to India. And I bet there will be a stampede out in a few years, because:

1. The English on foreign software (both application and documentation) makes no sense.

2. Rebellious Indians will steal US intellectual property.

3. Indians will sell proprietary business data to the highest bidder.

4. CNN shows footage of starving child laborers performing data entry tasks.

5. Sikh terrorists invade a US company’s office and gun down 100 employees.

6. Hindu nationalists invade a US food chain’s office and gun down 100 employees, because the US food chain sells beef.

Old Man Harris says:

No Subject Given

This article is stupid – it is typical sensationalistic journalism that takes a simple truth and blows it up 1,000x in order to create a story. They have been saying the same thing about New York City for decades. Everyone says that all the investment banks will leave Manhattan because technology makes it possible to do capital markets work anywhere and Manhattan is the most expensive place on earth. Sure, some firms have moved out. But most are still there. Geographic proximity will remain important in business as long as we, as humans, continue to exist as physical beings. I don’t know about you but I have no intention of converting myself into code anytime soon (but I hear that I could hire an Indian programmer to do it for me cheaply!).

A.Lizard (user link) says:

it's a matter of POV

How big a fraction of cost to the end user is labor on a high-tech mass-market product? If it’s over 10%, chances are, either the product design or the production is FUBARed and needs to be done right.

As an end user, I’d rather pay an extra $2-5 bucks to make sure the localization is done right (I’ve seen some pretty funny translation fuckups in user docs) so I don’t have to pay somebody local $50-200/hour for XX hours to get whatever it is working right because neither I nor anyone else around me has ever used it before and nobody can make sense of the docs.

There are other reasons why foriegn outsourcing isn’t all that great an idea. The Internet is a wonderful business tool, but if I have a for-real deadline, I don’t want to try meeting it with the bulk of the development team 9-12 timezones away. Having one party waking up as the other is getting ready to go to bed can make for some hilarious communications errors, but they aren’t all that funny when it’s on the clock.

I’m not bashing Indian programmers, I merely believe we’re probably all better off in the long run if our work is relatively localized.

I expect this outsourcing to start expensively backfiring sooner or later, but the urge to save nickels regardless of the impact on deadlines and quality will put a lot of American programmers and engineers out of work for a while.

I’m hoping some will go back to work competing with their ex-employers. If there are any smart VCs around, they might want to start financing this counter-trend.

Carol (user link) says:

Re: it's a matter of POV

One thing that needs to happen to prevent all of the programmers and engineers from losing work — American firms need to stand on their quotes and not cave when they hear “I got a quote that comes in at half yours” from a potential client. Stand firm on your financial feet, and don’t ever try to compete with the third world companies…soon clients will wake up and realise they’re getting exactly what they paid for when they went the cheap route.

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