I wrote a while back at HBR.org about whether digitization was contributing to the jobless recovery in the US, and opined that it was. I highlighted that both technology substitution and facilitation were taking place. Computers can now do many things (like drive a car) that we used to need people for; they can also facilitate human knowledge workers, making them much more productive and so requiring fewer of them to accomplish the work of the organization.
Being in India this week has made me realize that I forgot to include a third very important factor: moving work overseas. The outsourcing and offshoring of knowledge work depend, of course, on technology. To send a data center, a call center, or a business process from the US to India it’s necessary to have a lot of bandwidth between the two counties, and a lot of digital gear at each end. This infrastructure just gets cheaper and cheaper over time.
I’m in Bangalore and Chennai this week speaking at the EmTech 2011 conference and meeting some of the largest companies in India’s huge and growing knowledge work services sector. By one estimate, outsourcing is a $75 billion industry here, and it’s still growing like a weed.
The executives I’ve been talking with this week don’t foresee any dire problems finding the labor to meet all this demand. India is a hugely populous and young country, and its educational system turns out every year a great many people with marketable skills and English proficiency. The message I’ve been hearing is something like “We’ll be able take as much work as you want to send our way.” Given the wage differences between North America and the Subcontinent now and in the future, there will be a lot of this sending.
Outsourcing, automation, and facilitation combine to lead me to one inescapable conclusion: I would really not want to be a comparatively low-skilled knowledge worker in a high-wage country. The job prospects for this group are not great at present, and I have trouble seeing how they’re going to get anything but worse.
Until fairly recently, it was the case in America that a college degree was a pretty good guarantee of a decent job for life. There’s evidence that this guarantee is weakening. As a recent New York Times op-ed put it, lots of US Millennials trying to enter the workforce today are “Educated, Unemployed, and Frustrated.” Paul Krugman characterizes it as a “Falling Demand for Brains.” And my MIT colleague David Autor, an economist who’s studied the labor market with great depth and insight, writes about the “polarization of opportunities in the US labor market,” where people in the middle range of skills face the grimmest prospects.
What should we Americans do about this? Economics 101 tells us clearly that protectionism is not the answer (although Political History 101 tells us that it’s a depressingly common response to economic woes). And the march of technology shows no signs of slowing down. So this is going to be a tough problem to address effectively in the developed world.
The one recommendation I can make with confidence is to American parents: Mammas, don’t let your babies grow up to be underskilled knowledge workers. Make sure they have tools that will be valued in the coming world of work. According to me, these tools include advanced literacy and numeracy, the ability to write and speak clearly and persuasively, and comfort with statistical reasoning. So if your kid wants to do a degree in Media Studies, great, but make sure that they’re also throwing in an Applied Math major and taking a few good old-fashioned English Composition classes along the way (if such things can be found in today’s undergraduate curricula).
There’s obviously a great deal more to say on this topic, but for now I’d like to hear your thoughts: do you agree that with the grim assessment for developed-world knowledge workers presented here? If you see good news for this group, what is it? And do you agree with my educational prescriptions? Leave a comment, please, and tell us what you think.
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A few totally random observations from a first-time visitor to India:
Now that I’ve seen the Taj Mahal, I agree completely with Will Durant: “If time were intelligent it would destroy everything else before the Taj, and would leave this evidence of man’s alloyed nobility as the last man’s consolation.” There is nothing else like it on the planet, and you can’t comprehend its beauty until you see it firsthand. So go.
The Google autonomous car is an astonishing innovation, but it’s not ready for Indian traffic. As someone here explained to me. “On Indian roads you need three things: good brakes, a good horn, and good luck.”
Baseball’s Opening Day is almost here, and in a burst of serendipity on this trip I came across “Gandhi At The Bat,” a drop-dead funny fictional account of a visit by ‘Nabob of Nonviolence’ to Yankee Stadium, where he made friends with Babe Ruth and faced off against Lefty Grove. If you’re a baseball fan, you have to read it.