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Tom Peters on Outsourcing

Now before someone censors this tired old topic <<grin>>.
Whatever you think of him or the topic, Tom Peters brings fresh perspective with his wild quotes which often border on the insane. Prophet or madman?. You decide

"We are in the middle of a once every hundred years' (or so) productivity burst -- which is good for us ... in the long haul "

"One of the biggest challenges of the coming days is going to be the entry of 2.5 billion people from China and India into the global economy at an accelerating rate. The result is almost unfathomable,  and will throw up exceptional challenges as well as amazing opportunities. "

"Outsourcing makes the world a safer place ... in the long haul. The process is not pretty at times. (Sometimes long times.) Those who dutifully followed yesterday's rules yet are displaced must be helped when the rules change. Such help must not be in perpetuity -- it demands a sunset date."

Friday, March 5, 2004


Friday, March 5, 2004

He wrong.  Just like when he did "In Search of Excellence" and we later found out that over half the companies had gone under within 5 years.

"He says the Americans' "unearned wage advantage" could be erased ... permanently."

First, it was not unearned.  My tax dollars, and the tax dollars, and spending dollars of Americans, in support of American business, created this earned advantage. 

What we now see are countries in an effort to jump start their industry stealing a good portion of ours.  Those two billion Chinese, by China's own admission will be running 1.8 billion copies of pirated software, on equipment, manufactured in near slave like conditions, using IP created in the US, and Europe for which China has chosen to ignore, what they consider "protectionist IP laws." 

Mexico, in an effort to lure business to its country avoided any kind off law, rule or regulation that may inhibit a company from moving there.  They have seen a 200% increase in employee wages over the past 20 years, now in the $3/hour range, but have seen the expense of living in an area around plants grow by nearly twice that.  In the end, their people are making less money, supporting companies that are offering near slave wages to create environmental wastelands.  However, the ruling families of the country have been making a killing on the business deals.

India, has a subclass of highly educated, highly motivated people, who have sought out US business.  While certainly qualified, there idea of free trade is "I take one, you give me one."  America has selected this naive policy of "if we open our markets, they will too"  India proves the naiveté of the very thought.  Opening and competing for business in India is nearly impossible. Their protectionist regulations not only support a one way flow of labor, it insures that company seeking to do business in India, support its works to near exclusivity.

The problem is an application of a economic theory or rules into an environment where people, in an effort to exploit their advantage, don't play by the rules.  Free trade is like socialism.  It sounds good in theory, but it can never be practically put into a system where people can benefit from usurping the very concepts.  And it is not just countries, American companies, and Americans who demand a quarterly return on the 401k that create this situation. 

Americans have no teeth for making trade fair.  If you want fair trade, it means, not a single item from China is allowed into the US, nor a single item from the US allowed into China, until they pass and enforce laws to protect IP.  Communication lines from India, are suspended until they remove regulations that prevent US companies from bidding on business.

We, both our companies and taxes spend billions in R&D only to have it stolen.  Even Joel may find his software not only available in China, but being resold to the US as CityTable.  We then hear Joel just needs to "learn to compete, in a global economy."  Right. 

Friday, March 5, 2004

Thanks MSHack, that was a very interesting response and much food for thought..

Joe Hendricks
Friday, March 5, 2004

Fresh commentary that tastes good to me.

Friday, March 5, 2004

Teh Chinese and Indians are no more stealing your industry than the US stole its industry from other countiries. Ever heard of sour grapes?

Stephen Jones
Friday, March 5, 2004


In one respect, the Chinese (at least) ARE literally stealing (or infringing on copyrights/intellectual propery).  They're running a lot of pirated software over there. And producing a lot of pirated DVDs, etc.

So, in a very real sense, they ARE "stealing" intellectual property to grow thier economy.

However, I'm still in favor of a global economy as long as it's a level playing field. If indian workers work for less because they CHOOSE to then that's OK. If they work for less because they are somehow coerced, then that's not free trade.

The real Entrepreneur
Friday, March 5, 2004

Excuse me? What industries did the U.S. steal??

Friday, March 5, 2004

What industreis did the Chinese or Indians steal?

Stephen Jones
Friday, March 5, 2004

And for IP "theft" look at the number of Napster users that came from China and India, and the number that came from the US?

Stephen Jones
Friday, March 5, 2004

Napster was primarily used in the western hemisphere, because the eastern never needed it -- they could just visit their local street seller and get what they needed in half the time and half the effort.

one meeeellion dollars!
Friday, March 5, 2004

China - MS Windows, office, and literally thousands of software titles that are available in markets without fear of government retribution.

Malaysia - Took plans to chip manufacturing machines, protected by NDA and Trade Secret agreements and gave to competitors.  Then required American companies to meet the price for the machines. 

India - I did not say stole anything.  They have regulatory barriers built into their buracracy that protects their workers regardless of the price or bid.  The very process of being able to bid on a contract is so slimy that without an Indian front you will probably not be able to bid.  Then when you do use an India front, your bid is identified as "foreign".

Friday, March 5, 2004

We've invited Peters to do a seminar at Baghdad U.

Friday, March 5, 2004

Opening and competing for business in India is nearly impossible. Their protectionist regulations not only support a one way flow of labor, it insures that company seeking to do business in India, support its works to near exclusivity.

OTH, i found your post uninformed . This is such a wrong statement that i dont know where to start

Friday, March 5, 2004

> China ... IP laws;:4048252f:fe75300236c7ab1?type=technologyNews&locale=en_IN&storyID=4502798

... reports that the judicial situation there is slowly changing.

Christopher Wells
Friday, March 5, 2004

Karthik, are you for real? India has some of the most protectionist laws around for foreign investment and labor.

Friday, March 5, 2004

Karthik, are you for real? India has some of the most protectionist laws around for foreign investment and labor.

I am for real. While the labor part is true, the foreign investment part is not. This is not to say that its completely free. But India has come a long long long way from its socialist days.

Almost all multinationals -sony,microsoft, LG, Sharp,Toshiba, Akai etc. sell and sell well in India.

Friday, March 5, 2004

The USA used to "steal" IP (reprinting books) from the UK. Copyright was introduced only after a significant number of American authors complained when their own works were copied. I expect countries such as China will embrace IP laws as they have more of their own IP to protect.

John Ridout
Saturday, March 6, 2004

1. Only graduates of Indian universities can qualify as professional accountants in India.

2. Foreign architecture and engineering firms working on many Indian government projects may be paid in nonconvertible rupees only, meaning that the money has to stay in India.

Saturday, March 6, 2004

You seem to assume foreign investment and competition are the same.  Sure India is more than welcoming of US money to support Indian workers.  But, as American company attempting to bid on Indian business some of the "fun" we face are:
- You bid is marked at a foreign bid.  Gee, do think that plays into the selection process?
- You can prove that there is not an equivalent available resource Indian owned or where the majority of employees are Indian. [Proving that is nearly impossible]
- You then have government bureaucracy of India. For those who think, how back can it be?  Imagine a simple bid:
    - You wait for 8 hours and when you get to the window they give you a form to fill out. They had to "hand it to you."  It could not be in a place you might take it, because the person handing it to you stamps it, with the government seal.  You then go fill out the form and return the next day. 
        - Next you wait for 8+ hours to get the form reviewed.  If there is a  single error (read Joel's resume notes) the form is voided.  You must then get a new form.  Yep, go back to the first line tomorrow and start over again.

To avoid this, you hire a local firm to do the paper work.  This still takes four to sixteen weeks. Once the paper work is in, it is now open to an administrative review.  To be candid,  I don't think ANYONE knows what happens here.  It appears you send your paperwork into hell and somewhere six to twenty weeks later, they send it out again for comment/clarification.  Usually, this is to answer questions, provided in the form but that does not matter.  BTW  - you start at step one to get an addendum for the form.

They have built a system to ensure that they never reject you, you just never complete the process in time to have the bid accepted.  And it really does not matter if you are going for a government contract or an in-country contract, the process is nearly identical, except some of the companies will tell you (on the side) they cannot use off shore resources.

If you wish to defend the protectionism in India, at least understand what it is.  If you happen to be IN India, you only see your side of the process. 

Saturday, March 6, 2004

My appologies. It appears English is a third language from my posting above.    I need more coffee.

Saturday, March 6, 2004

You know what?

This thing about the US not being protectionist is absolute BS.

I live in India.

Going to the US to work is very, very, very difficult. Lots of papers to fill, very very low chance of getting accepted.

And it's normal - an accountant is licensed only if he/she knows the accounting laws of his/her country.

This is absolutely natural.

Do you think that if an Indian medical doctor comes to the US, he is allowed to practice medicine?

I tell you: NO.

He or she has to pass through a complicated process in order to be allowed to practice medicine.

So - don't tell me that the US is all about free trade, free work & all, and India isn't.

Saturday, March 6, 2004

So Mike, you feel that it is very easy for Americans to emigrate to India and find work?

For your own point of interest, our family doctor is from India. He is here on a H1B. All his education was in India, none in the US. Coming to the US to practice was a straightforward process for him and all the paperwork was handled by his sponsor.

Dayton Petrodyk
Saturday, March 6, 2004

> Do you think that if an Indian medical doctor
> comes to the US, he is allowed to practice
> medicine?

> I tell you: NO.

From my observation, this doesn't seem to be true. 

My dentist is Indian.  There are many medical practitioners in the U.S. who are of Indian descent.  And I'm not talking about 1st or second generation Indians.

Immature programmer
Saturday, March 6, 2004

> What industreis did the Chinese or Indians
> steal?

Well, according to a piece I saw on 60 Minutes a few weeks ago, everything, from golf clubs to cars.

I did like the Spoony backpacks (someone misspelled Snoopy) and the Hugo Bsos articles :)

Let's face it, they're stealing like mad, but no company really gives a damn, because everybody's thinking on cashing in on the "huge chinese market" (e.g., MS's "world wide" anti-piracy drive excluding China, for now).

So, yes, they're stealing, but "we" aren't worrying too much about it.

We'll see how well it pays off.

Paulo Caetano
Saturday, March 6, 2004

Mike, that's rubbish my friend. America, the UK and Australia recognise foreign trained doctors, accountants and programmers.

Doctors have to demonstrate they really are trained, and thank God they do. Even so, in Australia, that requirement is relaxed for doctors working in rural areas.

On the other hand, dear old India has just spent a few years refusing to recognise doctors trained in Russian universities. That includes Indian students. (They've finally decided they will recognise them.)

Mike, the reality is that India is a corrupt country with average standards and an elite IT class close to the ruling BJP who have milked the system for all its worth. Now they run around pushing the line that they're better than Western firms.

I will sit and watch the next few years as more Enrons roll in.

Saturday, March 6, 2004

"Going to the US to work is very, very, very difficult. Lots of papers to fill, very very low chance of getting accepted."

Actually, it would have been harder, but in the end, the work is being sent to them.  So there are no forms to fill out and concern about being accepted.

Saturday, March 6, 2004

I too watched that 60 Minutes segment about China. The reporter mentioned and the camera showed that entire freaking shopping malls are filled with stores that are selling mostly illegal merchandise!

What I don't understand is why there aren't a ton of Chinese merchants selling this fraudulent stuff on eBay to all the stupid spend happy Americans out there? I bet that expensive golf club the girls on the Apprentice TV show bought from a Chinese merchant was fake.

Saturday, March 6, 2004

So thay have merchandize with BsOs logos and you consider that stealing? jeez You'll be pulling in the guys with a "My second car is a Mercedes" stickers on the back of their beat-up old jalopy next.

Where I live there are six shops selling Levis. One of them sells genuine "American" Levis, and the other five sell fakes. The genuine ones go for about $50 and the fake ones go for $10. There is not one person that doesn't know the difference and if you ask at the fake shop if they are "American" Levis they will tell you they are not. You can also get genune Levis made under license in India or Thailand (or indeed the UK tnough they are more expensive than the "American" variety and nothing like as good), and if you ask at the shop they will tell you straight off.

Stephen Jones
Sunday, March 7, 2004

I seem to remember US companies exploiting cheap labour and unregulated safety in India. Bhopal anyone ?

The US systematically stole most of the its landmass from its indigenous inhabitants. Most of Australia is stolen from its native inhabitants. Most of Canada too, though they have given some back. New Zealand was purchased from its indigenous people for two marbles and a brass wingnut. India was part of the British Empire until the Indians said, "excuse me, sorry, but we have just fought a couple of wars for you, do you think we could have our country back? Hate to ask and all that but, well, there are five times as many of us as there are of you and we are getting a bit cross actually."

The US is protectionist and it's hypocrisy to complain about others doing it. As soon as the Internet became ubiquetous, those Westerners who have such inherent respect for IP started to - ahem - rip off IP with a passion. Western industries are patenting software ideas and whole organisms. That isn't respect for IP.

Learn the lessons of Japan in the 60's. They played the US at their own game and won. Now the Indians and Chinese are doing the same.

What goes around comes around: the West is sitting on a treasurehouse of imperial plunder - the US is no innocent here - and there will be a reckoning.

There, that's cleared my psychic sinuses ready for the week ahead.

Monday, March 8, 2004

If anyone's interested, I decided to put words behind my frustration with the current economic disaster that 1000's of talented, experienced IT folks are living through.

Read "Elegy for a Profession" at the following site:

Take care,


Jim Dunne
Tuesday, March 9, 2004

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