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You are arguing that distorting the market to increase pay for developers is a good thing for you. Some work can be easily moved around the world. Some can't.

by shubb 13y ago

You are arguing that distorting the market to increase pay for developers is a good thing for you. Some work can be easily moved around the world. Some can't. For instance, workers on your local railway can for up wages because the railway can't move, and local people need it. Software can be written anywhere, so if US wages are high, it will be written elsewhere. And you do see this. US wages, and Japanese wages, are higher than in Europe for developers. Here in the UK, a lot of engineering is essentially R&D outsourced from the US to a place with cheaper STEM workers. At the same time, I feel wages can be at current levels because developers don't realize how much they are worth. A big part of this is because it's hard to link revenues, even at a software company, to an individual developers achievement. If profit is a pie(chart) carved up between different workers and the share holders, then the worker who has best visibility how the money gets there, and how they contributed, will do best. Hence sales/marketing, management, and finance, all tend to do better, because they get to see the budget.

Retric 13y ago
Dispite what you have heard you can't cheaply outsource most development work, many projects outsourced to India actually end up costing more than they did when they where in the US. Granted the developers cost a lost less, but communication barriers often drive external costs through the roof.
- shubb 13y ago
  I'd draw a distinction between outsourcing, where you buy programming as a service from a third company, and relocation of a department, which is common in large companies. So for instance, in Basingstoke, an area where land is cheap just outside London, Sony, Huawei, and ST Ericcson (semiconductor major), all do high grade R&D work. Friends that work for those companies tell me that the work is run from a head office in America, Japan, or China, but done in the UK because of good IP laws, and lower cost workers than in Japan or America. Similarly, AMD have a huge R&D presence in India, and a lot of foreign talent is willing to relocate there because although wages are lower than in the US, they can enjoy a very high standard of living. I think the outsourcing you are talking about (small, non IT business buys a custom warehouse management system, programmed as s service), has little resemblance to the actual movement of jobs within large companies that I discuss. This (movement for whatever reason) has happened to whole industries. The UK used to be a center for semiconductor manufacture, but lost that status for 2 reasons. One was a series of catastrophic strategic decisions at UK semiconductor companies. But the other was that the UK government stopped giving tax breaks to the same extent, and were outbid by Singapore, which was willing to provide tax breaks, infrastructure, and an easy ride through city planning. The reason semiconductors moved was that the industry involve huge capital investments, and would make them where the deal was best (otherwise they would be outcompeted by a company that got a better deal). In software, the primary cost is definitely wages, so I'd presume large companies will be very sensitive to wage prices, and go the place the trade off is best.

by shubb 13y ago

Retric 13y ago

Dispite what you have heard you can't cheaply outsource most development work, many projects outsourced to India actually end up costing more than they did when they where in the US. Granted the developers cost a lost less, but communication barriers often drive external costs through the roof.

shubb 13y ago
I'd draw a distinction between outsourcing, where you buy programming as a service from a third company, and relocation of a department, which is common in large companies. So for instance, in Basingstoke, an area where land is cheap just outside London, Sony, Huawei, and ST Ericcson (semiconductor major), all do high grade R&D work. Friends that work for those companies tell me that the work is run from a head office in America, Japan, or China, but done in the UK because of good IP laws, and lower cost workers than in Japan or America. Similarly, AMD have a huge R&D presence in India, and a lot of foreign talent is willing to relocate there because although wages are lower than in the US, they can enjoy a very high standard of living. I think the outsourcing you are talking about (small, non IT business buys a custom warehouse management system, programmed as s service), has little resemblance to the actual movement of jobs within large companies that I discuss. This (movement for whatever reason) has happened to whole industries. The UK used to be a center for semiconductor manufacture, but lost that status for 2 reasons. One was a series of catastrophic strategic decisions at UK semiconductor companies. But the other was that the UK government stopped giving tax breaks to the same extent, and were outbid by Singapore, which was willing to provide tax breaks, infrastructure, and an easy ride through city planning. The reason semiconductors moved was that the industry involve huge capital investments, and would make them where the deal was best (otherwise they would be outcompeted by a company that got a better deal). In software, the primary cost is definitely wages, so I'd presume large companies will be very sensitive to wage prices, and go the place the trade off is best.