Via /. comes an interesting short article on the consequences of abundance and the erosion of economics based on scarcity. I’d challenge one small assertion:
The increased capability to communicate effortlessly with anyone in the world is an amazing result of technological know-how. It also means we can significantly reduce costs by sending work to the other side of the world, rather than employing people closer to home. Work is now geographically ambivalent and all white collar work is at risk of displacement.
At first this seems a seductively obvious truth, but I feel it is in fact a distortion. Yes, just as consumption has globalized (e.g. I might take vacations in Europe and eat European imported cheese), so has production. But much production is still highly correlated to geographical or cultural context.
As a product developer in the USA, I need to have empathy with the needs of the natives to be able to ideate good product solutions to the communications problems they face in their everyday lives. The marketing department needs to communicate to those customers and use social cues (sports teams, historical events, entertainment personalities) that they know will resonate with their audience.
If I want to create and sell pictures and paintings of the American landscape, I’m not going be very productive in Bangalore. And the demand for “local art”, personalized to the tastes of its consumer is huge and unfulfilled.
Aesthetics are highly local, and if Virginia Postrel is right and her thesis holds true, then the service outsourcing mania will rapidly reach its limits.
The telecom spin? Don’t assume that the death of distance means the end of geography. Your network and product ultimately deliver unique messages to unique people. And don’t invest in too many fibers going into India until their own markets and local demand for imported data increases.
UPDATE: On cue, Om Malik reminds us that the world is analog and location still really matters. Incidentally, the former SVP of strategy at Sprint, Liane Pelletier, was recently, um, overwhelmed by the urge to seek new opportunities, and ended up in Alaska. Perhaps Alaska isn’t the new telecom Siberia after all.
Posted by Martin Geddes at 03:35 PMTrackBack URL for this entry:
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I think this points to the notion that "knowledge work supply chains" are the future. The lions share of the profit pool will remain with the local "finisher" - the supplier to the consumer who is intimate with the customer. Geography will remain important for customer intimacy as long as culture remains heterogenious across the planet.
Ironically then the Americanization of the planet through the exporting of its media produce may be the great leveler which enables knowledge work offshoring. Homogeneity in the populace removes friction in the knowledge work economy.
So if you want to keep your job - embrace diversity! :-)
Posted by: at October 29, 2003 01:35 AM