2009 Update : Most of this page was written in about 2005,2006. However, compare this from 2009 : (Thought http://www.businessweek.com/print/magazine/content/09_24/b4135000953288.htm (Thought throw TcpIpVsTheDollar into the mix and I wonder whether a lot of innovation just got amateurized and taken out of the paid economy? )
When the jewel in the crown of the advanced economies IT and other high-level intellectual work is being OffShored, optimists will look for the next big thing to replace it. What are the possibilities?
- personal services
Biotech is, in many ways, the most down-to-earth possibility. There probably will be a biotech revolution. And it will create new industries. However, it's not clear that a country like the US has a lot of time to reap the benefits. People are studying biotech in universities around the world. Pure research can be done anywhere. And with biotech research there's less need to talk to a demanding customer to customize the product.
Perhaps biotech can be offshored faster than IT. (Especially as the infrastructure has been created by the IT industry.) If I was a biotech company, I'd already be building an offshoring strategy as integral part of my business model.
(Eg. Brazilian nano-robot research : http://radio.weblogs.com/0105910/2004/08/23.html#a947))
Super-creativity is a dangerous idea. It starts with an underestimation of foreigners : "sure they can do low-level programming and accountancy but we still come up with the innovation and creativity."
Here are some things wrong with that assumptions :
- Obvious divisions between creative design and mere implementation may not be the right ones. And may lead to greater inefficiency. (Discussed on OutSourcingAsAModularityMistake ) This could hold the implementation in the US, but is more likely to push towards moving the creative work out to the implementers.
- InnovatorsDilemma. All disruptive competitors start out grabbing the low value stuff, but then attack you from underneath as they move up the value chain. Even if you can separate the creative stuff from the less creative, there's no guarantee that the up-and-coming economies can't learn to do it.
:(Case : RubyLanguage, the first interesting and widely adopted progrmaming language from Japan. You can't get higher-level and more conceptual / creative (in IT) than inventing a programming language. After Japan, India? China? Brazil?)
: Offshore R&D? : (thought http://www.businessweek.com/magazine/content/05_12/b3925611.htm (thought : wonder how much SocialNetworkAnalysis contributes to this kind of analysis?)
- What is American creativity? The world listens to American music and watches American movies. But it's not clear that that's because of their inherant superiority or because they're packaged with BrandAmerica which derives from a synergy of US economic strengths. From Japan's economic boom of the 80s we got Manga / Anime / HelloKitty and a Japanese aesthetic in video-games. All significant creative exports. India is a phenomenally creative culture which makes more films than Hollywood and great international pop-music. Brazil exports tele-novelas around the world. It's certainly not clear that the US has any special advantage over these countries in creative talent for popular entertainment.
: There's a secondary factor. Americans think their cultural stuff is better than the rest of the world, really because it's the kind of stuff they, themselves, like. And they still have the money to consume a lot of it. So their taste affects the market.
:In a world where wealth is flowing to China and India and the dollar is falling; the buying decisions of the Chinese and Indians start to matter more. A shift of taste in China towards Japanese comics, or in India towards Chinese martial-arts movies, could shift the balance of cultural power significantly away from Hollywood. This could happen at the speed of fashion ...
:: I agree with all these points said here on innovation. It is not enough to say 'we have to be more innovative' than other countries, but we have to make this actively happen. A different mindset is needed that stresses and fosters innovation. One of the most important skills in this regard is the capabiltiy for critical thinking. But our society innondates us constantly with commericals and media news that tell us to 'buy this' and 'believe this' and teach us anything but critical thinking. – HannsOskarPorr
The other argument for the superior innovation of the US is that it's culture of investment, VentureCapital etc. is more advanced and willing to take risks. The US will thrive as the SandHillRoad to the world. I think this is pretty much an example of ownership as the next big thing I criticised in /WhyIsItInteresting
On the plus-side, personal services can't easily be off-shored. On the minus, as JohnRobb keeps pointing out, they aren't much of a basis for exports.
: However, the boundary of what is a personal service is starting to blend. For example, it used to be that a bank teller was a real live person, doing a personal service. Today you walk into many banks that have ''video' tellers, that could theoretically be located anywhere. The real criteria of a personal service that cannot be offshored is if it actually requires to physically work with the client or their property. – HannsOskarPorr
The bigger problem is that these evidence a highly divided society. And one which is fairly sick from the perspective of the AngloSaxonIndividualism. It's a society where servants are tightly dependent on their masters. Where they live in the master's house and have no private space or property. Where exploitation is rife. Where the personal is invaded by the commercial.
Clearly, there are cases where the personal mixes with the commercial relatively happily. When you do favours and occasionally sell services to your friends. Where people in the same community give each other credit. But that isn't the only scenario. More normal is the situation where those with the wealth and power are schizophrenic. Where they require servants to provide intimate personal connections one second, and want to be free of connection or commitment to them, the next. A wealthy class schooled on the convenience of plug-and-play devices and an alienated industrial work-force, will make for the worst kind of masters.
See also RolePlayingCafes
Creators and Empathizers (basically http://evelynrodriguez.typepad.com/crossroadsdispatches/2004/08/conceptualage__4.html) basically) seems to be "super-creativity" and "personal services". With addeded branding yourself and "empathy". (Cynical aside : Is the salvation of the US workforce going to rely on their capacity to put themselves in "other people's shoes"? Particularly those of the rest of the world? That's going to take a lot of rejigging of US media and education.)
Does it need major funded pure-research labs? : http://www.businessweek.com/magazine/content/09_36/b4145036681619.htm
See also :
- I have to write more OnServants
- More on paid services invading invading intimate life on /DebateWithGraham and in the book TheAgeOfAccess
- Informal, personal economies can be good : See AlternativeEconomics for more on this.
- Perhaps we all have to become Spime wranglers