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Global Labor Markets-Bytes vs. Brains

June 17, 2010
Updated April 22, 2015

dnews-files-2013-01-brain-660x433-jpg Face it, just about any type of work can be outsourced to distant countries, or what’s called offshoring. The exceptions at this point would include such occupations as firefighters, paramedics, nurses, police officers, construction workers and teachers. However, I could see the day when kids are in a classroom in Toronto or San Francisco, for example, a huge TV screen at the front of the room, with a teacher in Bangalore, India; a monitor (earning minimum wage) would be sitting at the back of the classroom to ensure discipline.

Farfetched? Maybe.

Everyone likes to pick on China for being the world’s manufacturing hub and for stealing jobs from the Industrialized West. However, Chinese companies are increasingly outsourcing their manufacturing operations to much lower wage countries like Vietnam and Cambodia. Even South Korea has outsourced some of its work to the pathetically poor North Korea.

Some call this a race to the bottom, in terms of locating production in the cheapest locations. Don’t confuse the lower-end manufacturing or assembly aspects of an iPad, HTC wireless device, Nike running shoe or Yamaha piano with where the intellectual property resides. Taiwan and Singapore, for example, understand this and are focusing on the value-added, intellectual property end of products and services.

bits-and-bytes_key1 This is the BRAINS part of the strategy for a nation to build its human capital and generate wealth for its citizens. The BYTES part can be done anywhere around the globe. The challenge for governments is to decide where they want to play.

If you want the brains route, it comes with the unwavering commitment to invest intelligently in the human capital of citizens. Note that I didn’t say dump a lot of money into education and training. Money is an important element, but smart investing is even more important.

A vital part of human capital development that regularly gets overlooked is that of management development. If you want a dynamic economy that’s a hotbed of innovation, then you must have effective management practices across all sectors of the economy. This encompasses management at the strategic decision-making and policy-making levels and at the firm operational level, where products and services are produced and disseminated. Moreover, it means connecting the research and development elements with how new inventions get commercialized in the marketplace. It doesn’t just happen by chance. Management is a key ingredient in a firm’s–and more broadly a nation’s–competitive efforts.

Finally, productivity–the word that causes eyes to glaze over–is intertwined with human capital development and the effective adoption and use of technology. Productivity’s the cool word for the new decade we’re in.

Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.
– John Maynard Keynes

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Jim Grand Manan FBTake a moment to meet Jim.


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