Globalization and the Brain Drain

As more than a casual observer of the globalization of technology (I type this from my hotel room in Beijing) I was amused to read the article "China hit by brain drain, report says" in the China Daily provided by the Beijing Hilton. The article made some pretty stark comments about the state of affairs:

• Since 1978, more than 70% of all Chinese who traveled abroad to study chose not to return home
• Between 1978 and 2006 about 1.06 million Chinese went to study overseas and just 275,000 returned home.
• About 300,000 people who went abroad with the initial intention of visiting relatives later enroled in higher education and stayed
• Chinese students overseas, especially those with extraordinary abilities are a real hit in the global tug of war for talent.

I guess this must be true. After all, why am I here in China? Why do I personally know five IBMers from the US who'll be working here next week?

The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions.

Fortune Favors the Prepared Mind

I'm not finished yet, but I can already tell that The World is Flat [Updated and Expanded]: A Brief History of the Twenty-first Century is going to be one of those books which is going to havea great impact on my professional life. There is so much truth (I don't have to like the truth) in the information presented, I was motivated to shoot an email to almost everyone in my email address book to recommend the book to them as a way to prepare for the impact of globalization on their life and careers.

The email had "Fortune Favors the Prepared Mind" as the subject line and read as follows:

A friend of mine recommended The World is Flat [Updated and Expanded]: A Brief History of the Twenty-first Century to me as a great book on the impact of globalization. I'm only about 20% done with it (the audio version) but I think there is a lot of good material on outsourcing, offshoring, India, China, etc. which I believe would benefit each of you as you think the future and the kinds of opportunities we all probably need to prepare for.

See also some great quotes from the book at www.wikiquote.org.

Some samples:

Every morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle.
When the sun comes up, you better start running.
-African proverb

• In the pathbreaking 1989 essay, “Computer and Dynamo: the Modern Productivity Paradox in a Not-Too Distant Mirror,” the economic historian Paul A. David explained such a lag by pointing to a historical precedent. He noted that while the lightbulb was invented in 1879, it took several decades for electrification to kick in and have a big economic and productivity impact. Why? Because it was not enough just to install electric motors and scrap the old technology – steam engines. The whole way of doing manufacturing had to be reconfigured. In the case of electricity, David pointed out, the key breakthrough was in how buildings, and assembly lines, were designed and managed. Factories in the steam age tended to be heavy, costly multistory buildings designed to brace the weighty belts and other big transmission devices needed to drive steam-powered systems. Once small, powerful electric motors were introduced, everyone hoped for a quick productivity boost. It took time, though. To get all the savings, you needed to redesign enough buildings with small electric motors powering machines of all sizes. Only when there was a critical mass of experienced factory architects and electrical engineers and managers, who understood the complementarities among the production line, did electrification really deliver the productivity breakthrough in manufacturing, David wrote.

Bill Gates: 30 years ago, if you had a choice between being born a genius on the outskirts of Bombay or Shanghai or being born an average person in Poughkeepsie, you would take Poughkeepsie, because your chances of thriving and living a decent life there, even with average talent, were much greater. But as the world has gone flat, and so many people can plug and play from anywhere, natural talent has started to trump geography.

• America integrated a broken Europe and Japan into the global economy after World War II, with both Europe and Japan every year upgrading their manufacturing, knowledge, and service skills, often importing and sometimes stealing ideas and equipment from the US, just as America did from Britain in the late 1770s. Yet in the sixty years since World War II, our standard of living has increased every decade, and our unemployment rate – even with all the outcry about outsourcing – stands at only a little above 5 percent, roughly half that of the most developed countries in Western Europe.

• By automating these jobs, it enables companies to save money and free up talented brainpower from relatively mundane tasks to start new businesses in other areas. You should be afraid of free markets only if you believe that you will never need new medicines, new work flow software, new industries, new forms of entertainment, new coffeehouses.

• It takes a leap of faith, based on economics, to say there will be new things to do. But there always have been new jobs to do, and there is no fundamental reason to believe the future will be different. Some 150 years ago, 90 percent of American worked in agriculture and related fields. Today, it’s only 3 or 4 percent. What if the government had decided to protect and subsidize all those agricultural jobs and not embrace industrialization and then computerization? Would America as a whole really be better off today? Hardly.

• Well, here’s the truth that no one wanted to tell you: The world has been flattened. As a result of the triple convergence, global collaboration and competition – between individuals and individuals, companies and individuals, companies and companies, and companies and customers – have been made cheaper, easier, more friction-free, and more productive for more people from more corners of the earth than at any time in the history of the world.

• The sense that our kids have to be swaddled in cotton wool so that nothing bad or disappointing or stressful ever happens to them at school is, quite simply, a growing cancer on American society.

• In China today, Bill Gates is Britney Spears. In America today, Britney Spears is Britney Spears – and that is our problem.

• As exciting and as visible as the flat Indian high-tech sector is, have no illusions: It accounts for 0.2 percent of employment in India. Add those Indians involved in manufacturing for export, and you get a total of 2 percent of the employment in India.

• Immigrants are always hungry and they don’t have a backup plan. Young Chinese, Indians, and Poles are not racing us to the bottom. They are racing us to the top. They do not want to work for us; they don’t even want to be us. They want to dominate us.

• The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists – not to save money by firing more people. (p. 360)

• The business organization consultant Michael Hummer once remarked, “One thing that tells me a company is in trouble is when they tell me how good they were in the past. Same with countries. You don’t want to forget your identity. I am glad you were great in the 14th century, but that was then and this is now. When memories exceed dreams, the end is near. The hallmark of a truly successful organization is the willingness to abandon what made it successful and start fresh.

• People don’t change when you tell them there is a better option. They change when they conclude that they have no other option.

• Louis Pasteur said it a long time ago: “Fortune favors the prepared mind.”

The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions.

Overtime Pay for I/T Architects?

I didn't even know this was going on until this morning, but apparently several high-tech companies including IBM, Siebel, and Computer Sciences Corp. have settled class action lawsuits regarding overtime pay for technology workers.

"International Business Machines Corp. settled a federal class-action lawsuit Wednesday, agreeing to pay a total of $65 million to 32,000 technology workers who claimed the company illegally withheld overtime pay....The case involved workers classified as "Technical Services Professional and Information Technology Specialists." IBM considered them highly skilled professionals exempt from overtime laws detailed in the Fair Labor Standards Act and California labor laws....Software maker Siebel Systems Inc. settled a class action suit by more than 800 workers earlier this month. The workers, who had job titles such as "software engineer" and "senior software engineer," will receive a total of $27.5 million....Last year, El Segundo-based Computer Sciences Corp. settled an overtime class-action suit by 30,000 employees for $24 million. "

For more complete details, see IBM Settles Overtime Lawsuit for $65M.

I don't plan on spending the money until I see it in my bank account. :-)

Copyright © 2006 by Philip Hartman - All Rights Reserved

The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions.

Musings on Bill Gates, the IT Shortage, and Globalization

I've taken an interest (by necessity) in the globalization of software development (and corporate life in general) so I read with interest "Bill Gates Says West Not Supplying Enough IT Talent" by James Kilner of Reuters. Bill Gates was speaking in Moscow and is quoted as follows:

"Worldwide, a lot of the developed countries are not graduating as many IT students as they were in the past, which is kind of ironic as it does mean it does increase the opportunities."

"There is a shortage of IT skills on a worldwide basis. Anybody who can get those skills here now will have a lot of opportunity."

If you follow the link above to the story about Gates and look at comments posted at the bottom, they were mostly bemoaning the fact that I/T jobs in places like Russia, China, and India pay a lot less than the US and other Western nations. They attributed the "shortage" to a shortage of people willing to work for low wages.

I was probably as nervous as anyone else about the globalization of software development a few years ago. Since then I guess I gotten past my fears. On my best days, I have embraced the idea. On my worst days, I guess I just try to make the best of it.

It does appear to me that CIOs are taking the cost savings of global resourcing and using it to fund additional projects. If they had a budget 5 years ago to do 4 major projects a year then today they are using a similar budget to execute 5, 6, or even 7 major projects. These "extra" projects are often the ones that are the most fun to work on. They would have been "stretch" projects that never got funded in the past. One change that has happened, however, is that those of us in the US are having to play more of a leadership role vs. doing the "heads down" coding.

Another anecdotal piece of evidence that the sky is not falling. I've done some interviewing right here in the US for college graduates. Are we taking just anybody? No, we are being selective. But this is quite an improvement over just a few years ago. We're hiring both overseas and in the "high wage" countries.

By the way, see the Oct 31st article "IBM Plants New SOA Development Centers in India, China" to see that this trend is only accelerating. This is not about using global resources to maintain old code. This is about investments in the latest and greatest SOA technology... and doing it with talent from around the world.

"It's all about business model innovation—giving clients the ability to rapidly change business models by building applications with reusable software components," said Sudhir Sastry, leader of the IBM SOA Solutions Center, in Pune.

Key to the initiative is IBM's WebSphere Business Services Fabric—based on technology IBM recently acquired when it purchased Webify Solutions, Sastry said.

Back in September 2004, I got to make a trip to Bangalore, India. I saw an office building for almost every big-name tech company while I was there. Here's a few samples from my personal photo archives. They aren't great pictures as they were taken through the window of the taxi I was riding in.

First Oracle

• 
  Next Intel
  IBM
  And finally Microsoft
  
  
  

  Copyright © 2006 by Philip Hartman - All Rights Reserved

  The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions.

Crisis in Time, Talent, Trust and Transformation

I received a great presentation the other day entitled “Four Crises for Business: Time, Talent, Trust, and Transformation” by Peter Andrews at the IBM Executive Business Institute. While this is not exactly an I/T Architecture issue, I think the issues he brings out will show up in the business drivers and business requirements of our I/T projects. We're certainly affected by the these issues in our work environment.

With his permission, I will share a few quotes from his work that I think will resonate with I/T architects.

At a high level, there are no surprises. Executives have been putting the challenges of globalization, cost-cutting, disaster planning, shortened product lifecycles and attracting and retaining the best employees onto their top ten lists for years. Politics, the world economy, technological advances, investor impatience, natural disasters and other drivers of change have been pushing business hard for decades. Once mighty companies have lost their footing, and many have fallen....

Everyone is working harder, but are we doing anything differently? Are radical changes in direction even considered?”....

Consider four crises that thematically sum up our difficult times, and then consider what might be done about each:

The Crisis of Time. Douglas Adams said, “I love deadlines. I love the whooshing noise they make as they go by.” Most of us have far too many deadlines whooshing by and it doesn’t inspire feelings of affection. Take a poll of your team and see how many of them feel like their task lists are longer and someone has been stealing minutes, if no hours, from their clocks.”....

....progress in interruption management systems are all on the way to help. Think of the effort your business puts into cost cutting and see if you can do the same thing for time cutting – at the level of individuals, as well as teams. But first, think wisely about what you and your colleagues will do with the time savings, and hold onto the time for those purposes. Even if those purposes include taking a deep breath or daydreaming.”


The Crisis of Talent. “Great people make a great company ..... But there aren’t enough great people to go around and we don’t use them well. Part of the problem is scheduling (as can be seen in the Crisis of Time), but part of it is just finding and training them. How do we know who the great people are when our measurements have been reduced to revenue numbers? How do we expose and develop talent when training is just a cost number? How do we get talented people involved in the right projects? How do we keep talented people engaged and motivated? How do we keep them at all?....

And don’t forget training, which may need to take on new characteristics as those who have learned as much from online multiplayer games than from classroom instruction begin to enter the workforce. ....

The Crisis of Trust.

Half of all strategic business relationships fail to meet their objectives, .... Confidence in management is dropping. In a survey of 13,000 employees at U.S. companies, Watson Wyatt Worldwide found only 39 percent trust their senior leaders. And every time a deadline is missed or an offhand comment is misconstrued, a virtual team starts to strain its seams....

And yet, eBay, where most buyers and sellers never meet face-to-face, has an estimated US$23 billion worth of transactions each year. This is possible because the company provides over a dozen trust enabling/establishing services, including security, payment escrow, user agreements, a privacy policy and, most importantly, the input of peers. Feedback, stars, rating the raters – it’s all part of a reputation management system that allows the community to vouch for the individual. Similar clusters of technologies can provide a basis for trust across the organization (and, not incidentally, give your team access to talented unknowns).

The Crisis of Transformation.

You can’t anticipate everything, but you have to be ready for anything. Scenario planning and good backup systems can help with disasters, of course. But flexibility will be demanded of almost all businesses in a world where global outsourcing breaks down barriers and shifts value, where challenging regulations like Sarbanes-Oxley in the U.S. require more accountability, where the viability of channels changes and the ability of companies to cluster into well-positioned virtual corporations creates new, vital competitors....

Intriqued? Check out Peter Andrews' class on Business Futures at the Executive Business Institute... and take your C-Level with you.

Some of my more random thoughts on this. That means don't blame Peter if you disagree me on this. :-)

• I am certainly a victim of “time-cutting”, time wasting, and interruptions. I bet you are too.


• I wonder what the cure is. Will it be “interruption management” systems? Part of me would like to go back to the days when someone in my position had a secretary. A real person who would run interference for me. But, realistically that is nostalgia. I can’t envision that scenario happening. I also wonder if I’m culturally ready to turn over my calendar, phone, email, etc. to an electronic secretary with a mission to keep me from being interrupted.


• Will companies start measuring how interrupted their employees are? Will we be getting software requirements for those interruption management systems in the near future to try to squeeze more hours of productivity out of employees? I wonder if I could articulate the benefits of such a system to someone who actually had budget authority to fund it?


• “Training is just a cost number” More nostalgia. I remember when I was almost expected to go into an online catalog of training classes in various cities across the country and pick a couple classes a year. These were real classes in nice facilities in nice cities with real teachers and real labs and real whiteboards. Those were the days! Now they want us to do everything in some kind of virtual classroom via the internet. Airfare and hotel ? Forget it! And why do I, a person who makes his living on computers, hate the idea of a virtual classroom. I kind of like chatting with the other students on breaks and over lunch. I learn something there too. Is there a way to at least partially reproduce this under today's cost constraints?


• Undiscovered talent / Un-Nurtured Talent - As a senior I/T Architect it is part of my job to develop talent. In the consulting business this is viewed as increasing our capacity to deliver solutions to our clients. Frankly, as I practice it today it is more gut instinct, Golden Rule, and taking advantage of mentoring opportunities as they present themselves. Is this enough? What if I don’t meet those programmers working in romote places face-to-face and don’t have impromptu white boards sessions? What if the time of day that I am all energized and in the mood to play coach and mentor, those remote programmers have already been working all day on their timezone and want to go home?


• Trust - Here I can see some real business requirements and some real value. Imagine looking to see how many stars someone has earned before deciding to use them on your project. Would I really take a “talented unknown” on the basis of their intranet “star rating”? Imagine looking to see how many stars a boss has before accepting a position. Imagine if I could earn a bonus from my stars! And how do we prevent everyone giving each other good grades and the resulting “trust inflation” because nobody wants to be the bad guy.


• Transformation - I am reminded of all the process choreography discussion that goes on around Service-Oriented Architecture (SOA). Imagine all those ovals on the whiteboard with service names inside them. Imagine if there were really readily available providers for all those ovals. The company would only exist to wire together or choreograph the process, consisting of these services.


• Could I make more money selling process choreography software?


• If this is for real, how many of us I/T Architects are going to quit our jobs and become entrepreneurs? Anybody ready to create your own company to provide one of these easily plugable services? Want to be in the business of providing the service in one of those ovals on the whiteboard?

The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions.