Getting the Finger
by Andy Turudic
I'm getting dizzy from all of the spin we're seeing from our currently popular regime. The talent for placing a positive angle on raiding our treasuries and our jobs has no bounds, with a new twist seeming to appear at the dawn of each day. We are now seeing "extremely low" unemployment figures being quoted at a low 5.4%, but many in our profession have been out of work for over a year and no longer receive the benefit from which that affected-population statistic is derived. We are told that outsourcing is good for America, as we see a shift from high-value "thinking" jobs to low paying service sector jobs that physically require the presence of a human to accomplish the task. The latest spin is that job losses, netting well over 900,000 in the past three-ish years (over 20% or so of which are in OUR field), are specific to small geographic pockets and are not an endemic problem resulting from the way we are running our society. The message seems palatable, since the guy delivering this message is, after all, one of us regular folks; he almost never wears a tie and demands others in his presence to dress down as well.
The great enabler for the export of our thinking jobs has been our ability to improve our communications over vast distances. In earlier days, we could generate Gerber, GDS-II, or G-code, files from our CAD system, ship them off to a shop around the corner, and find ourselves with devices that were only limited by our own creativity and fancy -- within the constraints of the business that employed us, of course. Both white collar and blue collar workers reaped the benefits of this symbiotic relationship and could rely upon each other to pick up the phone and clarify aspects of a design that were either ambiguous or non-manufacturable. As we became more specialized, the shop-around-the-corner became a plane trip away, with the designer coming to a manufacturability review with the latest paper, or 9-track magnetic, tape, under one arm.
We then discovered that we could create a communications capability to where these large CAD/CAM files could be sent overnight from a host computer. Ten years ago, the house (which my wife might apprise you I'm still building) drawings needed to be sent overnight by 2400 baud modem from my computer to a plotting service to generate D-size sheets: I simply could not afford a large streaming tape- (or 9-track-) drive which was common at the time, and the files could not fit onto a floppy disk, even after being compressed.
As our coding abilities became more adept, we were finding ourselves with the ability to regularly send over 50 kbaud rates of information over standard dialup phone lines. What took three or four hours now only took 10 or so minutes. With time, we built out our telecom infrastructure to where, within a decade of initiating standards for the likes of HDSL, ADSL and VDSL, we found ourselves with access technologies, to both business and residences, approaching 50 Mbit/sec.
Companies found that a large portion of the intellectual property and ideas created by domestic design teams could be fabricated overseas for a fraction of the cost. With our newfound communications technology, we could move CAD/CAM files freely around the world and, with that ability, could shop for the solution that could yield the highest profitability in our products. This was supposedly good for America and the EU, because higher profitability in the classical sense meant more money for R&D, allowing a society to outpace its technology rivals at an exponential rate.
At some point in time, two senior executives must have met at an airport lounge and questioned each other on why money should be put into R&D, particularly since a large number of markets saw product lifetimes of 5 to 7 years -- with no real production revenue, in the case of a components supplier, realized until a year or two after the component is sampled. The lifecycle of the executives' own careers was only three years, so why bother plowing the money back into R&D, when they could take that 20% increment in profit, pay it out as salary and bonuses to themselves and their friends, and run the business at break-even? They could create a scheme where each would hire the other every few years, allowing them to leave before the damaging wake of their leadership was exposed.
Better yet, some execs found that they could fuel their greed even further in that they could run a breakeven business AND shave R&D expenses by yet another 10-15% by sourcing the R&D function overseas. After all, the American and European hardware designers already had a hard time dealing with Mandarin-speaking contract manufacturers, so why not just hire Mandarin-speaking design teams in the same time zone and locality as the manufacturing site? Now, the savings in paying out $800 a month, versus $80,000 a year, per head, could go straight to the executive team. Companies that made $100 M profits on $300 M revenue a few years ago, now find themselves barely at break-even, despite the diligent efforts of the sales and manufacturing team to get billings to a run rate of $360 M and despite layoffs of hundreds of hard-working people: those that actually took the company to high-profitability in the first place.
It's ironic that we have shot ourselves in the foot -- the very communications infrastructure, the tool created by our profession, is now the weapon that threatens to bludgeon our profession. There are those that argue that our nation's creativity is superior to those in the rest of the world, but looking back in history, while we write a good story that steals the credit quite nicely, most of our stuff has been pilfered from someone else. In reality we are really no more superior in creativity or knowledge than our fellow humans on this planet; our only noble attribute, up until a recent couple of years, has been our exercise of restraint, our generosity, our honesty, and our compassion. Now that those have somehow been lost in our culture, there really is no differentiator, is there?
Design jobs will continue to flow to the next lower denominator ad infinitum; generally to a locale that exhibits the attributes of greater obedience, lower wages, and a sufficient education. As these societies ramp into relative affluence, they too will experience the cycle, and will find themselves outsourced to another realm -- all that's really needed to move thinking jobs around is a fiber optic network and some electricity.
Now that designers are well on their way along the road to Armageddon, there are other professions that are unknowingly being set up for a fall. As happened with the electronics and software design community, they can't see the train bearing down on them until it's too late. Recently, Mr. Bush proposed an initiative to convert hospital and medical records into digital form, reducing the costs of health care. While this appears to be great news (and is, to the likes of GE and Siemens, in terms of sales of digital imaging sources and file storage systems), the reality is that this digital information can live and move around the net, just as our CAD/CAM files do. While we do not manufacture humans from such files, we do maintain, repair, and collect for damages to, humans at great expense to corporations that provide health care. With radiologist salaries exceeding $200 k/year, it seems only natural that with this digital infrastructure, a radiologist's X-ray interpretation could be had from Bangalore for 1/10th the cost.
Will this mean cheaper, more ubiquitous health care, or will it mean more profits and skimming by healthcare execs? If the electronics and software industry is any indication, human nature's consistency makes the outcome obvious. In a compassionate world we'd drop our health care costs 50% and provide care for those that cannot pay due to misfortunes in life, but these days that is "liberal" and "socialist" thinking: a no-no. Meanwhile, I do not look forward to a "doctor's" office visit in 20 years, where, in a room devoid of fellow human presence, I connect to a Bangalore help line, try in panic to elaborate on my initial problem statement -- that I get heartburn when prostrate -- and, all the while, I hear a whirring sound as a rubber-gloved telematic arm, with its cold, metallic, index finger extended, moves towards me…
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