The World Shrinks!

The world has certainly shrunk in the past 20 years. Jobs once done in the USA are now performed all over the earth. In his book review of Thomas Friedman's The World is Flat: A Brief History of the Twenty-First Century Edward Leamer lists what he calls three revolutionary forces in the global economy:
  1. More Unskilled Workers: The economic liberalizations in China and India and Russia and South America and on and on have added to the effective global labor markets a huge number of unskilled workers and relatively little human and physical capital.
  2. New Equipment for Knowledge Workers: The Internet and the PersonalComputer have fundamentally changed the nature of knowledge work, raising productivity, emphasizing talent and reducing the need for “helpers.”
  3. Communications Innovations: The cell-phone and the beeper and e- mail and voice-mail keep us all wired and connected 24/7, thus eliminating the borderline between time at work and time at leisure. These same communication tools, together with the Internet and virtually costless telecommunications have extended the geographic reach of suppliers, and have increased the intensity of competition for mundane work and standardized products.
Did you catch that last part.. "competition for mundane work"?  Seriously.. I think that somewhat captures the essence of this shrinking world. We are mostly not speaking about a competition to be fulfilled in exciting and interesting jobs. What we are focusing on are jobs that need to be done so that folks like you and me can have cheap stuff.

You know.. once upon a time I really didn't care that jobs were outsourced.. most of them were manufacturing jobs.. my take was a somewhat arrogant one for sure. Then the new millennium dawned and people from places like India and Pakistan were not only carrying green cards and working here in the USA..doing jobs similar to mine.. but jobs like mine were being done in places like India and Pakistan. In other words outsourcing became personal.

So what am I trying to say.. I feel that I am once again rambling.. I guess my thoughts on this shrinking world are two fold. Firstly, it is good to understand that these jobs we are fighting for are not glamorous ones. Secondly, many of us live in denial of these impacts thinking that our jobs are safe.. and we don't care all that much until it gets personal.

I do wonder where the next 20 years will take us.. maybe one day overseas doctors will be reading our eCharts, diagnosing our diseases and prescribing treatments.. today even radiologists' jobs are being done overseas these days. Never know.


  1. There's no room to grow existing businesses in the US and most of the industrialized nations. When existing products flattened out, product innovation allowed some companies to continuing growing but now many companies find that their innovations are only cannibalizing their conventional products.

    Thus corporations have to create markets in developing countries in order to continue growing their businesses and competing for investors on Wall Street. To maintain profitability in their domestic markets, they can only reduce their overhead. Many jobs have been replaced by technology and procedural improvements, domestic labor costs are reduced by flooding the market with immigrant labor, and many other jobs are outsourced to foreign labor forces. Globalization is accelerating and it won't end until the cost of labor and services is flat across all countries. Until then low and middle income workers in developed markets like the US will suffer a decrease in their standard of living and the gap between them and the upper economic class will grow wider even than it is now.

    There is no such thing as an American corporation anymore. The consumer needs to recognize that the borderless corporations are not interested in building America. They are only interested and developing and exploiting consumer markets and new lower cost labor market. Their huge influence on our government is ONLY to protect their profits and their markets. It is our mistake to think that corporations place nationalism and the public's welfare above profit.

    I think the greatest challenge that Mankind will ever face will be too few jobs for too many people. Our workforce experienced similar challenges when the nation transformed from a farming economy to a manufacturing economy, and again when we transformed from manufacturing to a service economy. Every year the world produces more products and services with an ever decreasing contribution from human beings. At some point our society will have to learn to provide for a largely underemployed population. Less work time more leisure and retirement time (the average American works half as many hours as he did less than 100 years ago). The retirement age is being increased now because social security and Medicare will otherwise run out of money. We already have too few jobs for our current workforce; increasing the years that a person must work before he can retire is just worsening the problem.

    If our society doesn't learn how to provide adequately for all of its people in the future, the underemployed masses will eventually revolt.

  2. At this point, the two-third world is looked upon as a source of cheap labour rather than co-partnerships in American based multinational companies. We from the two-third world did not take your jobs intentionally! It was offerred to us by your MNC because of the bottom line.

    Now we are just carrying out per instructions. Soon we will innovate and improve. Look at the example of Japan and Korea. Now look at China and India. Maybe one day, we will be outsourcing to America.

  3. Great comments Alex! If China and India can steer clear of western hedonism like Japan and Korea did then you may be right.. but be careful what you wish for :)

  4. I bow to your opinion on this one Joe.. I am just pouring my first cup of coffee. Do you feel that Japan is pretty westernized?

  5. My impression is that Japan is as Westernized as the US in many ways: industry, technology, politics and economics. I also think we are beginning to share the same values. I don't think Westernization and Hedonism are one and the same. Westernization is a broad cultural change which is neither positive nor negative. Hedonism is a selfish attitude that lacks all regard for others. While you and I might agree that many Americans are hedonists, I hope it is not an unavoidable result of Westernization.

  6. Just an aside.......

    I thought at first the title of this entry was............

    The World Stinks.

