I have blogged before on the increasing off-shoring of professional jobs. The issue continues to attract comment from bloggers, with Richard Murphy arguing against expecting large scale off-shoring of professional work. I think he is wrong.
Firstly, I think he over-estimates the importance of personal interaction. I had always thought that my own line of work, equities analysis, required personal interaction. I found meeting the mangement of companies I covered invaluable.
It appears that I was wrong. Many banks and brokers are off-shoring junior analysts. Although the senior jobs remain, a lot of positions have moved. If the off-shoring of junior positions takes off sufficiently, then the diminished talent pool will mean there is not choice other than to off-shore at more senior levels as well: if there are fewer junior analysts, there are fewer people to promote.
In addition, being off-shore does not mean no personal contact. That is what planes are for. People also use technology to communicate more. I have had a job interview by tele-conference, and what could require personal contact more? Given the extent to which people use email, and instant messaging, I feel that the importance of physically looking someone in the face has diminished.
Working as analyst in Manchester (rather than London) required travel to actually meet most people. Certainly travelling from South Asia would be less convenient, but is no insuperable obstacle.
Richard also mentions the importance of sector knowledge. This is crucial to analysts, and, as I said, has not stopped successful off-shoring there. He claims local knowledge cannot be transmitted on paper (and presumably not by video conference either), but does not really explain why not.
In addition, there are many people in South Asia with British (and American) professional qualifications and experience. Ask the CIMA or ACCA how many members they have off-shore. Most may not have the local exposure, but you might be surprised how many do. I also know a lot of Sri Lankans who have worked in Britain, and many more who could gain the experience if they wished (because they have dual nationality, or qualify for a highly skilled migrant visa, or have a British spouse, etc.).
As for the argument that only the less skilled purely technical jobs can be off-shored, there are many extremely good jobs for which personal contact is not crucial. Why does it matter where a quant, an actuary, a bio-technology researcher, a semi-conductor designer or an economist works?
As for education, I am probably hopelessly biased because I far prefer distance learning to face-to-face contact (and my academic performance reflects this), so I will leave that topic alone.
The arguments against expecting outsourcing of the most highly skilled jobs, reminds me of arguments from an earlier stage of globalisation. At that point the argument was that low skilled manufacturing jobs would be exported, but that the skills did not exist for more skilled work to move.
Finally, for those who think they are safe because their jobs require physical contact: wait until waldos (remote manipulators) become as cheap and usable as email.
If you’re right Graeme the future is very depressing indeed
Not just professionally, but socially
We can’t survive as societies on the basis you envisage, in my opinion
Richard Murphy
I am not sure what the results will be, but it could be very grim in developed countries. I assume you are, like me, worried by the prospect of a huge gap between the rich (who will benefit from profit growth) and everyone else (who will be competing with third world wages).
It will give the poor countries to which the outsourcing goes a much needed economic boost, but, even there, it is likely to leave societies very unequal.
“It will give the poor countries to which the outsourcing goes a much needed economic boost”.. there is another point i’d like to make. Yes, outsourcing pays well to the people of poor countries. However, some of them, highly skilled people (defined as CFA charter holders, graduates..CIMA, ACCA members etc) sometimes can end up just typing numbers into a model. They could arguably do more productive work in the country (such as get involved with developing their own capital markets) rather than do high paying mundane work. So the economic benefit is rather for the individual, rather than the society. It is not necessarily bad in my view, but a point i would like to make…
Moreover, time differences mean that people end up in LK working UK hours, which means a possible breakdown on social relationships…moreover,i hear that certain outsourcing vendors ‘bond’ employees which i believe is a different form of slavery…again, not necessarily bad…
All in all, the world i guess would benefit from outsourcing…some will benefit more than the others…