Broken Promises

We have been betrayed. All of us. No exceptions except for a tiny minority. It does not matter whether we live in a developed country or a developing one. We were made a promise that has been broken. False reassurances were given. We were lulled into a stupor and now are slowly awakening to conditions that we don't recognize and never agreed to.

The promise was made as a result of the development, export and expansion of the industrial revolution. As a result of this, technological innovation has exploded. New inventions and new ways of doing things are constantly being developed. At the same time there is an increased emphasis on obtaining technical education to fulfill the demands of the new technologically oriented society. This has affected both developed and developing countries. The only difference between the two is that the latter experience these trends later than the former although the time delay has been shrinking rapidly.

So people in the developed countries have been strongly encouraged to obtain a university education. This encouragement has been backed up by reams of statistics from "experts" which showed that people with a university degree earn significantly more than their less educated peers. People were told that the future was in the "knowledge" economy. Thus when the first wave of outsourcing to the developing world hit the labor classes in the developed countries, "experts" were on hand to reassure everyone that the future did not lie in the "dirty" manual labor. Brain power was more important. The blue collar jobs lost will be replaced by higher paying, white collar jobs in which knowledge is more important. No need to get hands dirty when the more important, higher value added, better paying cerebral jobs will be available.

A little thought on this claim would have quickly exposed it as being largely a piece of fiction. There is no monopoly on knowledge. A person in the developing world can acquire the same amount and level of knowledge that anyone in the developed world can. Furthermore, developing countries have lower living costs than developed ones so such a person can be acquired at a cheaper price than a similarly knowledgeable person in the developed world. The same technological, economic and communication factors that have made outsourcing of manual jobs feasible do the same for "knowledge" jobs. So for example a qualified accountant in the developing world can be acquired for a fraction of the cost of an equally qualified one in the developed world. Similarly a developing country hardware designer can design a new computer chip at a much lower cost than a developed country hardware designer. Thus outsourcing of middle class, higher end "knowledge" jobs was only a matter of time and already this process is well underway. What is left are jobs that require face to face, physical interaction with clients and customers. That is why McDonalds can add jobs in developed countries whereas General Motor is shedding them. It is to be noted that at the high end, face to face, physical interaction is becoming less important as technology advances to a point where it becomes possible to transmit holographic images around the world. So at the high end, these jobs will also be under the threat of being outsourced.

All of the above means that people in developed countries are sitting pretty right? After all, jobs are coming to them. Their counterparts in the developed countries may be getting fired but they are getting hired. And it is not simply low end manual jobs that are coming their way. As the above indicated, high end, "knowledge" jobs are also coming their way.  Therefore for the developing countries, good times indeed. Not quite. The picture here is not as rosy as it seems.