6 ms·

Slightly related genuine question: Why do Apple/Meta/Microsoft pay $300k-$1m/yr for American engineers (salary + stock compensation) from an international persp

Slightly related genuine question: Why do Apple/Meta/Microsoft pay $300k-$1m/yr for American engineers (salary + stock compensation) from an international perspective? Capitalism states (sort of) that there's competition and an inherit race to the bottom. Companies have a motive to spend as little and get as much for their buck as possible. Globally, how is paying somebody $300k/yr in America (expensive) the best option in terms of getting development done? Is the answer really "quality"? Aren't engineer salaries much lower in Europe? What about Asia? South America (Brazil)?

yuppie_scum 3y ago
Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years. I have seen slightly better results with offshoring from Latin America - fast feedback makes a huge difference - being able to meet frequently and provide feedback in the same time zone makes a huge huge difference. I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over.
- lokar 3y ago
  Also, these companies tend to be lead by engineers. They identify with the engineers and believe that this work (and thus themselves) is special. Not the case with say auto manufacturers.
  - MuffinFlavored 3y ago
    Who is to say the future will "remain this way" for engineers? When will it become more of a commodity?
    - lokar 3y ago
      More and more these companies are lead by groups of people who have never worked as an engineer.
      - MuffinFlavored 3y ago
        I think most CTOs of smaller companies make $500k/yr or more, don't write code, and are just really good at driving delivery/working with others/having good instincts on trusting others (like enterprise architects, dev leads, etc.)
- flutas 3y ago
  > Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years. Yupp, it pretty much turns a quick conversation at standup or a quick huddle about a change into a 16+ hour turn around time at minimum.
- rafaelmn 3y ago
  > I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over. Context size is the least of an issue - current models suck in capability. I've been building stuff on top of openai API for months and getting it to do trivial stuff with instructions reliabily is incredibly hard. These are things like "if a user asks a question about an individual but only specifies first name ask for last name before invoking a search function" - even with examples of what to do you'll get GPT 4 ignoring instructions and calling search with just a first name. Like I understand that the potential they are showcasing is a breakthrough, and people are right to be excited about that - but we are extrapolating way to much based on breakthrough improvement pace. We've seen similar claims about self driving cars being a year away since 2016. Unless there's some breakthrough, I don't see AI affecting developer demand in the next two years at least.
- stardom5761 3y ago
  Isn't the current AI level already good enough to offload a big chunck of the work? I feel like the technology is already there and it's just a matter of adoption
cqqxo4zV46cp 3y ago
Because capitalism the theory and capitalism the reality are vastly, vastly different. I just thought I’d jump in before someone talks about how [insert Ivy League school here] is the best thing since sliced bread.
gedy 3y ago
Salaries are not big of a cost compared to revenue, so the "savings" only are valuable to struggling companies.
- MuffinFlavored 3y ago
  To me this translates to "it's worth it to pay somebody $300k/yr - $1m/yr because companies can earn X% ROI on their cost of employees" but and I just struggle to believe where... from what I understand, there are like people who assemble iPhones for very very low cost in Asia, etc. Now I'm not saying iPhone assembly and architecting cloud computing are the same skillset. I just find it "unlikely" that America really has that large of a quality gap internationally? I work for a company that has a remote team of developers in Shanghai. I don't know for sure but I'm going to guess they do the same work/probably better work than the US team for less pay.
  - vlovich123 3y ago
    They are probably closer when evaporated as a % based on the amount of value and profit in the supply chain that is being extracted. People making iPhones are working for companies that have their margins squeezed to razor thin margins so that Apple can make its 30% cut. The other thing is the amount of skill required. There are more people who can be hired to assemble iPhones than to design all the parts that go into the product. Finally, there’s an arbitrage effect going on. A company can more easily go into a low CoL and pay the predominate local wage than a person from a low CoL can move to a high CoL and get paid a fair wage (aside from legal barriers there are also social ones involved with leaving your family)
  - aprilthird2021 3y ago
    The money creates a bigger quality gap. At Meta's US offices, most devs are foreign origin. They moved for the money. So those devs wouldn't just accept paltry sums if Meta hired them overseas and they didn't need to come to the US to work. But Meta would have added friction the more and more of their teams are separate from product owners and business owners.
  - gedy 3y ago
t8sr 3y ago
There are many more feedback loops than meets the eye and not only corporations are rational economic actors. The in-demand talent tends to move to high CoL locations. Former low CoL locations become high CoL when successful. Especially when a high and low CoL location are adjacent, this tends to happen quickly (e.g. Germany and Switzerland, Malaysia and Singapore, US and Mexico.) The reverse is also true - people in high CoL locations tend to move out when their skillset no longer commands top compensation. In other words, I think the available workforce, to at least some degree, sorts itself into expensive and cheap locations based on what skills are in demand. To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit, and it's a 90 minute flight. Why wouldn't they take it?
- wallon_brux 3y ago
  I get your point, but you actually need a work permit for both london and switzerland
  - t8sr 3y ago
    You're right about London, although I explored it not long ago, and having an EU/EFTA passport and a job in tech seemed to basically guarantee it. As for Switzerland, you don't need it. As the Swiss government itself says: "Thanks to freedom of movement, citizens of EU/EFTA member states can enter, live and work in Switzerland.". [1]: https://www.ch.ch/en/foreign-nationals-in-switzerland/working-in-switzerland/#citizens-of-euefta-member-states https://www.ch.ch/en/foreign-nationals-in-switzerland/workin...
- berdario 3y ago
  > To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit They actually need a work permit for London (it's not EU anymore). I believe that for Switzerland there might also be requirements for the employer to state that they couldn't find talent in the country, before extending an offer to foreign nationals (including EU: Switzerland is not EU, though it's part of Schengen... And thus EU citizens have freedom of movement) But your point stands... I think that fiefdom building, and needing teams close to where the execs (and/or investors) work and live is the other big reason why companies hire in high COL areas
irrational 3y ago
Time zones. The business people don’t want to have meetings very early in the morning or very late at night. And they need more than one meeting a day and those meetings are taking place during nighttime in most of the rest of the world. The reasoning is different for Latin America - there the issue is more of a language barrier. While a great many people in Asia and Europe already know or seek to learn English, the same isn’t as true in Latin America.
- monocasa 3y ago
  Pretty much all devs in Latin America speak English. It's the lingua franca of software dev.
  - clbrmbr 3y ago
    The level of English varies, and salaries usually correlate with English proficiency just as well as with technical ability. I believe this is because devs with strong English can compete as remote workers on the global market, whereas those who are not professionally competent in English are relegated to work in firms that speak their language, or at least to have a bilingual management layer above them.
- aworks 3y ago
  I regularly had 7am PST calls with Europe and Russia and 7pm PST calls with China and Taiwan. Calls with both at the same time were particularly difficult to schedule.
  - irrational 3y ago
    Like I said, way early and way late. 7am I am still getting my kids up and ready for school. 7pm we are cleaning up dinner and getting kids ready for bed.
- Teever 3y ago
  Now do Canada.
aprilthird2021 3y ago
The best and brightest of Asia and Europe move to the US because of the salaries. Thus, the talent pool in the US becomes far stronger than the talent pool in other regions. But it's also true that FAANG all have global offices and teams fully in places with lower salaries. They are aware of the pay differences and take advantage of them. But they can't completely have all development done in a separate time zone or even same time zone separate region (like LATAM). That slows down dev cycles, invites gaps in product understanding, and allows you to miss out on top talent who will move to get paid top dollar.
aworks 3y ago
I was a sofware director at a Fortune 500 company. I had engineers in Silicon Valley, Santa Cruz, Canada, the Netherlands, Russia, UK, Taiwan, and Wuhan (!) China. I also had individual engineers in Romania, Ireland, Portugal and Germany. Since it was already a global company, it was feasible to hire wherever we could find talent. Some of the Russia team moved to Armenia last year when the office in St. Petersburg was closed. We considered other countries like Vietnam since we had Vietnamese-American engineers but this is where we ended up. Cost was one of multiple variables determining which site we hired at. At the extremes, it was a 10x difference. The higher the salary, the more senior the team. The competition to hire and retain software engineers caused salaries to go up everywhere, but at a faster rate in the low-cost countries. And low-cost countries were our go-to source for new grads. The profiles of say Russia and China universities varied significantly e.g. experience with open source, mathematical rigor, English skills, credentials, initiative, teamwork, and relevant courses. The core product develpoment was done in the US but over time, other sites took on more product responsibility. In some of the countries, we also wanted to be closer to our customers, in expanding markets. It's hard to measure quality, productivity and contribution on an individual basis but it was reasonably correlated with salary. There were outliers though. So geographically-based staffing was complicated.
- orzig 3y ago
  As a senior IC formerly in a similar situation, I’ll affirm this is brilliantly written and even deeper than it looks. I’ll add: Many of the Indian ICs I worked with were fine, but there was at least one manager who was an absolute disaster and the American executives had very little ability to fix the situation. Given that financial capital is here, executives will be here, and so some part of the org chart has to bridge across cultures, which is going to be a slight friction that compounds over the years of the project.
- moneywoes 3y ago
  ultimately, are the days of a blue collar engineer in the west limited? you mentioned the new grad pipelines have already moved what advice would you give to a engineer in the west hcol, pivot to product?
maxwell 3y ago
Because they earn enough per head to hire on-site in expensive locations. "Remote" seems to usually just mean not doing that, i.e. avoiding the costs of North American metro areas, seemingly usually out of financial necessity.
foolfoolz 3y ago
there’s not enough good engineers to sustain a business the size of apple in any one geo location. this will change in the next 25 years
pdpi 3y ago
There's competition for high-end engineers everywhere, and you can't really afford to lock yourself out of the markets where those engineers congregate.
jandrewrogers 3y ago
An important element of this is that there is strong and self-reinforcing geographical clustering effects around high-value skills. Engineers do not generically make $300k-$1M, it is engineers with specific domain expertise. I've had teams all over the world, the market is more efficient than I think some people expect. Focusing on wage arbitrage ignores that companies are optimizing for ROI, not cost per se. I think it is also important to recognize that the engineers top American tech companies hire are often not American, they just happen to be in America. It is a geographical bias, not an American-as-nationality bias. Engineers with unusually high skill in any particular area are geographically diffuse. You can't hire a "team" in some distant inexpensive country, there might only be one or two such engineers in the entire country and they are difficult to find. The moment a company invests in creating a concentration of domain skill where none really exists, that clustering of expertise has a natural gravity not only for engineers with those skills but for other companies that want to hire those skills. Why search for a particular engineering expertise in Bolivia when you know there are a hundred top engineers in some specific city? Even if the wages are higher, the risk is lower, hiring velocity higher, and the engineers more experienced, which has a large real ROI on its own. So people with those skills gravitate toward that concentration because that is where the money and jobs are. Wash, rinse, repeat. There are many large cities in the world with a reputation for having a proper tech presence, albeit on a lower tier, where it is nearly impossible to hire certain expertise and experience even for Silicon Valley money. You see the effects of this throughout tech, and not just software, where specific skill sets are oddly concentrated in one or two regions, including ones that are not particularly known for being tech or where the company that originally created the concentration became irrelevant decades ago. This expertise flywheel is how new globally leading tech hubs are created in practice e.g. Taiwan for silicon fabrication or Seattle for cloud. This is the tech hub bootstrapping problem. You have to heavily invest in a valuable technical domain that is currently being ignored by existing tech hubs. Taking advantage of these opportunities requires vision and an appetite for risk, since it is a contrarian position almost by definition. I think this explains much in the European context, where you have large concentrations of excellent engineers but minimal investment in genuinely bold visions.
- t8sr 3y ago
  Well put. It's a shame that the domain a lot of European countries decided to bootstrap tech hubs around was crypto and not AI.
poisonborz 3y ago
The same reason why middle and upper management is not outsourced. Communication and effective control over continents is hard. Core engineer salary costs are a drop in the bucket for global companies. And anything that is not core product, they do outsource.
FredPret 3y ago
Some companies do love the race to the bottom, but these don’t last long. Others seek instead to make remarkable things, and for these it makes sense to throw money at the best talent. What does it matter if an engineer costs 1m/yr if they make something worth 100m - 1000m? In fact, it’s a bargain. This phenomenon doesn’t exclusively exist in America, but the environment there is more conducive to entrepreneurs swinging for the fences than most other countries. They’ve also been playing at a high level for much longer than most, so investors there have lots of wealth to fund startups. So that’s where you find the big salaries as well.
- MuffinFlavored 3y ago
  > What does it matter if an engineer costs 1m/yr if they make something worth 100m - 1000m? I think it would be very difficult to take the ~100 or some engineers who do make $1m/yr at Google and draw the direct line to "this specific engineer is responsible for $1,000,001 worth of profit (aka paying for himself/herself/themself + some)", let alone $10m, $100m, etc.
deleted 3y ago
[deleted]
badpun 3y ago
The engineering is their core competency and the source of competetive advantage. Given that it currently works well, and those companies are massively profitable - they see little point in doing risky cost-cutting.
opportune 3y ago
This might be a controversial opinion here and I don't mean to offend anybody, but the distribution of engineers' effectiveness is not the same around the globe. Thought exercise: what kind of profile would you expect of someone going into software engineering in a country where the good jobs pay 5x median wage (and ~25x global median wage) vs a country where the good jobs pay 2x median wage (and ~6x global median)? Thought exercise: what kind of skills and experience would you expect of a 90%ile senior engineer in a country that gets lowest-bidder outsourced contract development work, vs a country that is directly employing engineers in "cutting-edge" development?
deleted 3y ago
[deleted]
deleted 3y ago
[deleted]

yuppie_scum 3y ago

Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years. I have seen slightly better results with offshoring from Latin America - fast feedback makes a huge difference - being able to meet frequently and provide feedback in the same time zone makes a huge huge difference. I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over.

lokar 3y ago
Also, these companies tend to be lead by engineers. They identify with the engineers and believe that this work (and thus themselves) is special. Not the case with say auto manufacturers.
- MuffinFlavored 3y ago
  Who is to say the future will "remain this way" for engineers? When will it become more of a commodity?
  - lokar 3y ago
    More and more these companies are lead by groups of people who have never worked as an engineer.
    - MuffinFlavored 3y ago
      I think most CTOs of smaller companies make $500k/yr or more, don't write code, and are just really good at driving delivery/working with others/having good instincts on trusting others (like enterprise architects, dev leads, etc.)
flutas 3y ago
> Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years. Yupp, it pretty much turns a quick conversation at standup or a quick huddle about a change into a 16+ hour turn around time at minimum.
rafaelmn 3y ago
> I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over. Context size is the least of an issue - current models suck in capability. I've been building stuff on top of openai API for months and getting it to do trivial stuff with instructions reliabily is incredibly hard. These are things like "if a user asks a question about an individual but only specifies first name ask for last name before invoking a search function" - even with examples of what to do you'll get GPT 4 ignoring instructions and calling search with just a first name. Like I understand that the potential they are showcasing is a breakthrough, and people are right to be excited about that - but we are extrapolating way to much based on breakthrough improvement pace. We've seen similar claims about self driving cars being a year away since 2016. Unless there's some breakthrough, I don't see AI affecting developer demand in the next two years at least.
stardom5761 3y ago
Isn't the current AI level already good enough to offload a big chunck of the work? I feel like the technology is already there and it's just a matter of adoption

cqqxo4zV46cp 3y ago

Because capitalism the theory and capitalism the reality are vastly, vastly different. I just thought I’d jump in before someone talks about how [insert Ivy League school here] is the best thing since sliced bread.

gedy 3y ago

Salaries are not big of a cost compared to revenue, so the "savings" only are valuable to struggling companies.

MuffinFlavored 3y ago
To me this translates to "it's worth it to pay somebody $300k/yr - $1m/yr because companies can earn X% ROI on their cost of employees" but and I just struggle to believe where... from what I understand, there are like people who assemble iPhones for very very low cost in Asia, etc. Now I'm not saying iPhone assembly and architecting cloud computing are the same skillset. I just find it "unlikely" that America really has that large of a quality gap internationally? I work for a company that has a remote team of developers in Shanghai. I don't know for sure but I'm going to guess they do the same work/probably better work than the US team for less pay.
- vlovich123 3y ago
  They are probably closer when evaporated as a % based on the amount of value and profit in the supply chain that is being extracted. People making iPhones are working for companies that have their margins squeezed to razor thin margins so that Apple can make its 30% cut. The other thing is the amount of skill required. There are more people who can be hired to assemble iPhones than to design all the parts that go into the product. Finally, there’s an arbitrage effect going on. A company can more easily go into a low CoL and pay the predominate local wage than a person from a low CoL can move to a high CoL and get paid a fair wage (aside from legal barriers there are also social ones involved with leaving your family)
- aprilthird2021 3y ago
  The money creates a bigger quality gap. At Meta's US offices, most devs are foreign origin. They moved for the money. So those devs wouldn't just accept paltry sums if Meta hired them overseas and they didn't need to come to the US to work. But Meta would have added friction the more and more of their teams are separate from product owners and business owners.
- gedy 3y ago

t8sr 3y ago

There are many more feedback loops than meets the eye and not only corporations are rational economic actors. The in-demand talent tends to move to high CoL locations. Former low CoL locations become high CoL when successful. Especially when a high and low CoL location are adjacent, this tends to happen quickly (e.g. Germany and Switzerland, Malaysia and Singapore, US and Mexico.) The reverse is also true - people in high CoL locations tend to move out when their skillset no longer commands top compensation. In other words, I think the available workforce, to at least some degree, sorts itself into expensive and cheap locations based on what skills are in demand. To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit, and it's a 90 minute flight. Why wouldn't they take it?

wallon_brux 3y ago
I get your point, but you actually need a work permit for both london and switzerland
- t8sr 3y ago
  You're right about London, although I explored it not long ago, and having an EU/EFTA passport and a job in tech seemed to basically guarantee it. As for Switzerland, you don't need it. As the Swiss government itself says: "Thanks to freedom of movement, citizens of EU/EFTA member states can enter, live and work in Switzerland.". [1]: https://www.ch.ch/en/foreign-nationals-in-switzerland/working-in-switzerland/#citizens-of-euefta-member-states https://www.ch.ch/en/foreign-nationals-in-switzerland/workin...
berdario 3y ago
> To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit They actually need a work permit for London (it's not EU anymore). I believe that for Switzerland there might also be requirements for the employer to state that they couldn't find talent in the country, before extending an offer to foreign nationals (including EU: Switzerland is not EU, though it's part of Schengen... And thus EU citizens have freedom of movement) But your point stands... I think that fiefdom building, and needing teams close to where the execs (and/or investors) work and live is the other big reason why companies hire in high COL areas

irrational 3y ago

Time zones. The business people don’t want to have meetings very early in the morning or very late at night. And they need more than one meeting a day and those meetings are taking place during nighttime in most of the rest of the world. The reasoning is different for Latin America - there the issue is more of a language barrier. While a great many people in Asia and Europe already know or seek to learn English, the same isn’t as true in Latin America.

monocasa 3y ago
Pretty much all devs in Latin America speak English. It's the lingua franca of software dev.
- clbrmbr 3y ago
  The level of English varies, and salaries usually correlate with English proficiency just as well as with technical ability. I believe this is because devs with strong English can compete as remote workers on the global market, whereas those who are not professionally competent in English are relegated to work in firms that speak their language, or at least to have a bilingual management layer above them.
aworks 3y ago
I regularly had 7am PST calls with Europe and Russia and 7pm PST calls with China and Taiwan. Calls with both at the same time were particularly difficult to schedule.
- irrational 3y ago
  Like I said, way early and way late. 7am I am still getting my kids up and ready for school. 7pm we are cleaning up dinner and getting kids ready for bed.
Teever 3y ago
Now do Canada.

aprilthird2021 3y ago

The best and brightest of Asia and Europe move to the US because of the salaries. Thus, the talent pool in the US becomes far stronger than the talent pool in other regions. But it's also true that FAANG all have global offices and teams fully in places with lower salaries. They are aware of the pay differences and take advantage of them. But they can't completely have all development done in a separate time zone or even same time zone separate region (like LATAM). That slows down dev cycles, invites gaps in product understanding, and allows you to miss out on top talent who will move to get paid top dollar.

aworks 3y ago

I was a sofware director at a Fortune 500 company. I had engineers in Silicon Valley, Santa Cruz, Canada, the Netherlands, Russia, UK, Taiwan, and Wuhan (!) China. I also had individual engineers in Romania, Ireland, Portugal and Germany. Since it was already a global company, it was feasible to hire wherever we could find talent. Some of the Russia team moved to Armenia last year when the office in St. Petersburg was closed. We considered other countries like Vietnam since we had Vietnamese-American engineers but this is where we ended up. Cost was one of multiple variables determining which site we hired at. At the extremes, it was a 10x difference. The higher the salary, the more senior the team. The competition to hire and retain software engineers caused salaries to go up everywhere, but at a faster rate in the low-cost countries. And low-cost countries were our go-to source for new grads. The profiles of say Russia and China universities varied significantly e.g. experience with open source, mathematical rigor, English skills, credentials, initiative, teamwork, and relevant courses. The core product develpoment was done in the US but over time, other sites took on more product responsibility. In some of the countries, we also wanted to be closer to our customers, in expanding markets. It's hard to measure quality, productivity and contribution on an individual basis but it was reasonably correlated with salary. There were outliers though. So geographically-based staffing was complicated.

orzig 3y ago
As a senior IC formerly in a similar situation, I’ll affirm this is brilliantly written and even deeper than it looks. I’ll add: Many of the Indian ICs I worked with were fine, but there was at least one manager who was an absolute disaster and the American executives had very little ability to fix the situation. Given that financial capital is here, executives will be here, and so some part of the org chart has to bridge across cultures, which is going to be a slight friction that compounds over the years of the project.
moneywoes 3y ago
ultimately, are the days of a blue collar engineer in the west limited? you mentioned the new grad pipelines have already moved what advice would you give to a engineer in the west hcol, pivot to product?

maxwell 3y ago

Because they earn enough per head to hire on-site in expensive locations. "Remote" seems to usually just mean not doing that, i.e. avoiding the costs of North American metro areas, seemingly usually out of financial necessity.

foolfoolz 3y ago

there’s not enough good engineers to sustain a business the size of apple in any one geo location. this will change in the next 25 years

pdpi 3y ago

There's competition for high-end engineers everywhere, and you can't really afford to lock yourself out of the markets where those engineers congregate.

jandrewrogers 3y ago

An important element of this is that there is strong and self-reinforcing geographical clustering effects around high-value skills. Engineers do not generically make $300k-$1M, it is engineers with specific domain expertise. I've had teams all over the world, the market is more efficient than I think some people expect. Focusing on wage arbitrage ignores that companies are optimizing for ROI, not cost per se. I think it is also important to recognize that the engineers top American tech companies hire are often not American, they just happen to be in America. It is a geographical bias, not an American-as-nationality bias. Engineers with unusually high skill in any particular area are geographically diffuse. You can't hire a "team" in some distant inexpensive country, there might only be one or two such engineers in the entire country and they are difficult to find. The moment a company invests in creating a concentration of domain skill where none really exists, that clustering of expertise has a natural gravity not only for engineers with those skills but for other companies that want to hire those skills. Why search for a particular engineering expertise in Bolivia when you know there are a hundred top engineers in some specific city? Even if the wages are higher, the risk is lower, hiring velocity higher, and the engineers more experienced, which has a large real ROI on its own. So people with those skills gravitate toward that concentration because that is where the money and jobs are. Wash, rinse, repeat. There are many large cities in the world with a reputation for having a proper tech presence, albeit on a lower tier, where it is nearly impossible to hire certain expertise and experience even for Silicon Valley money. You see the effects of this throughout tech, and not just software, where specific skill sets are oddly concentrated in one or two regions, including ones that are not particularly known for being tech or where the company that originally created the concentration became irrelevant decades ago. This expertise flywheel is how new globally leading tech hubs are created in practice e.g. Taiwan for silicon fabrication or Seattle for cloud. This is the tech hub bootstrapping problem. You have to heavily invest in a valuable technical domain that is currently being ignored by existing tech hubs. Taking advantage of these opportunities requires vision and an appetite for risk, since it is a contrarian position almost by definition. I think this explains much in the European context, where you have large concentrations of excellent engineers but minimal investment in genuinely bold visions.

t8sr 3y ago
Well put. It's a shame that the domain a lot of European countries decided to bootstrap tech hubs around was crypto and not AI.

poisonborz 3y ago

The same reason why middle and upper management is not outsourced. Communication and effective control over continents is hard. Core engineer salary costs are a drop in the bucket for global companies. And anything that is not core product, they do outsource.

FredPret 3y ago

Some companies do love the race to the bottom, but these don’t last long. Others seek instead to make remarkable things, and for these it makes sense to throw money at the best talent. What does it matter if an engineer costs 1m/yr if they make something worth 100m - 1000m? In fact, it’s a bargain. This phenomenon doesn’t exclusively exist in America, but the environment there is more conducive to entrepreneurs swinging for the fences than most other countries. They’ve also been playing at a high level for much longer than most, so investors there have lots of wealth to fund startups. So that’s where you find the big salaries as well.

MuffinFlavored 3y ago
> What does it matter if an engineer costs 1m/yr if they make something worth 100m - 1000m? I think it would be very difficult to take the ~100 or some engineers who do make $1m/yr at Google and draw the direct line to "this specific engineer is responsible for $1,000,001 worth of profit (aka paying for himself/herself/themself + some)", let alone $10m, $100m, etc.

deleted 3y ago

[deleted]

badpun 3y ago

The engineering is their core competency and the source of competetive advantage. Given that it currently works well, and those companies are massively profitable - they see little point in doing risky cost-cutting.

opportune 3y ago

This might be a controversial opinion here and I don't mean to offend anybody, but the distribution of engineers' effectiveness is not the same around the globe. Thought exercise: what kind of profile would you expect of someone going into software engineering in a country where the good jobs pay 5x median wage (and ~25x global median wage) vs a country where the good jobs pay 2x median wage (and ~6x global median)? Thought exercise: what kind of skills and experience would you expect of a 90%ile senior engineer in a country that gets lowest-bidder outsourced contract development work, vs a country that is directly employing engineers in "cutting-edge" development?

deleted 3y ago

[deleted]

deleted 3y ago

[deleted]