Back in the 1970s, the term “brain drain” referred to top talent leaving their native Third World countries to attend prestigious First World schools and then never returning -- depriving developing nations of crucial human capital. These days, however, the flow of international talent isn’t so simple. You don’t always need to relocate to find high-paying work -- the work can come to you, whether you reside in New Zealand, China, India, or South Africa. Maybe “work drain” is a better term for what’s going on now -- the work rather than the people is flowing around the globe.
According to a recent Gartner study, in fact, U.S. spending on offshore IT services will reach $50 billion by 2007. India currently gets the lion’s share (more than 80 percent) of that, Gartner says, because of its “majority of essential resources and sufficiently robust technology infrastructure.”
Essential resources? That’s people. People are the only sustainable advantage in business -- I recently heard the COO of Ameritrade say that everything else (technology, money, caffeinated drinks) are commodities.
So what should the United States do to maintain its technology leadership and stop the work drain? It should invest whatever is necessary to ensure that it has the best, biggest, and hardest working pool of technology talent to compete globally.
Instead of cutting back on H-1B visas to “protect” American jobs, we should be granting immediate U.S. citizenship to anyone who can code. We should be running ads during the Super Bowl that glorify engineering careers, while subsidizing mid-career transitions for lawyers and investment bankers who want to become technology project managers. America is great today because it attracted our parents and grandparents -- the fearless, innovative risk-takers who got on the boat to find a better life and then worked their butts off to make it happen. That DNA and spirit should still be a competitive advantage, even though the playing field is more level.
Meanwhile in Southeast Asia: According to a recent study by the McKinsey Global Institute (MGI), the Philippines is lagging behind India and other offshoring locations despite recent success in attracting work in shared services, data entry, medical transcription, and even animation. Although the country boasts low costs and a population with great English skills, MGI says, it compares unfavorably on risk (meaning political instability), infrastructure, the availability of vendors, and has “a paucity of skilled middle managers.”
Of course, nobody’s perfect. This global-work thing is complicated, and we’re still in the early innings.