Protests, riots and flash mobs are popping up all over the world from Greece to London and Israel to the US. This past week we even saw a global stock market sell-off due to a Paris-based bank’s alleged financial problems – thankfully though the French people are still enjoying their 6+ week vacations and have no plan to strike until they return.
But seriously – what the heck is happening in the world? The answer is quite simple really, technology is continuing to make the world a better place for the “have nots” – at the expense of the “haves”. Third-world countries are "exporting" their poverty to developed nations.
Consider that my company TMC has been covering the call center space since the early 1980s and in the middle part of the decade, I noticed these centers realized they could locate anywhere and started to pick Omaha, Nebraska and Iowa as ideal locations because Midwesterners had minimal accents, costs in these areas were dirt cheap and telecommunications lines were plentiful.
Moreover, economic development authorities in the US started to court contact centers as agents didn’t need extensive training and unlike manufacturing jobs you didn’t need massive amounts of power and water access in order start hiring. Basically, any location – as long as it had telecom lines and minimal electricity could support the hiring of thousands of workers. Moreover, you could build and populate a call center employing these numbers in months if needed.
And yes, over time, call centers went from the expensive parts of the US to the less expensive parts and then countries like Ireland got into the picture in the late eighties and early nineties – exploiting their plentiful fiber capacity to ensure low priced phone calls and rapid call center growth.
In the early nineties, voice over frame relay was used as an alternative to the PSTN and while it was cheaper , it was still quite expensive compared to VoIP which made it even cheaper to make phone calls. Once the Internet started become reliable and cheap enough it became possible to hire agents directly throughout the world without the need to even set up an office in Dublin or anywhere else. As a result of these changes, many jobs could be done in low-cost areas and we see today that China and India are seeing the standard of living of their citizens absolutely skyrocket.
And when you consider consider that two billion Asians became part of the global workforce in the past 20 years you realize how big the problem is. You have a staggering population who lived in abject poverty and they are now competing with poor people in western nations who by comparison, without the need to do menial jobs have have access to free food via government subsidies, free housing, healthcare and money for living expenses through hundreds of state and federal assistance programs.
If you had to handicap this competition, who do you think would win?
Ask anyone who hires and manages immigrants in day-labor or similar positions how US-born citizens compare in terms of work ethic and you hear comments like “I wouldn’t hire any of them.”
You see, the west has become a victim of the “me generation” phenomenon where they feel a sense of entitlement. They think the world “owes them.”
The irony here is it is the very technology which allows the poor to live comfortably without working while having access to cable TV, air conditioning and other amenities has now turned on them to make their world more competitive.
And consider this statistic – that US employment when underemployment is factored in is almost at Great Depression levels and still, those with a college education are nearly fully employed. So even with all this global competition, at least in the US, there is a shortage of skilled workers – leading to what many call a skills mismatch.
And yet the wealthier continue to become wealthier because in part they are able to leverage the availability of lower cost workers. Moreover, many in the tech space have skills which are at dotcom levels of demand. In some cases more so.
Thankfully, the solution to the problem is simple to articulate but complex to put into practice.
In the sixties the rock stars (not including the Beatles, Elvis, Rolling Stones, etc.) were the astronauts and NASA scientists looking to put men on the moon. The nation rallied around scientific pursuits and rather than watching Snookie for hours at a time, the nation watched and discussed Neil Armstrong and how he seemed to be floating as he walked upon the lunar surface.
This resulted in a massive amount of interest in science and technology in the US. It became a game, a competition – something fun you wanted to be part of.
Take a flip through your cable TV channels and you’ll see TV programs glorifying single parenthood – without ever telling the audience that children who have a single parent are six times as likely to live in poverty. Then you’ll see stations glorifying pop stars, Hollywood and other programs which glorify the fantasy of getting rich quick. Sure, you can get rich quick but for every person who does, millions others will have to work their rears off with massive levels of perseverance to be able to have a comfortable retirement.
And the irony is that so many of the people protesting could be doing really well if they had the technical training and desire to be programmers, web designers and other technical professions which have thousands of openings with few qualified applicants.
Is this an immediate fix? No – but the world is filled with people who were once hopeless in their poverty becoming obscenely wealthy and bringing thousands along with them as they achieve newfound success. I am convinced some of these protesters and others out of work will be the Mark Zuckerberg or Bill Gates of tomorrow.
So yes, we have a problem – a major one but we can make a dent in it if some of the richest techies in our midst will take to the airwaves and try to get kids to become the next them. People would give their left arms for an iPad or iPhone – I have to imagine they would be interested in learning how they too can potentially invent something which is in such demand.
The young protesters around the globe are generally the exact viewers of CGI-based movies and video game players who should be encouraged to not only consume but learn how to create games and movies of their own.
In other words, we are in a consumer electronics revolution yet outside of China, India and a few other countries, the desire to become an engineer and contribute to the next generation of gadgets seems to have been replaced by the desire to see how tired Kim Kardashian is at the moment.
And until this changes, the west is in a lot of trouble.
Yes, global unrest is tech’s fault but it is also the answer to many of the world’s problems. Moreover, the opportunity for anyone with the desire to succeed has never been greater – precisely because universal access to technology makes it easier to implement good ideas, find customers and get funding.
Now we just have to find a way to make kids more impressed with the term “successful entrepreneur“ than they are with “single parent,” “movie star” and “pop artist.”
Sadly I am not too confident this will happen at any point soon and if it doesn't, the only other solution is to wait for the standard of living of the billions in Asia to approach something much closer to that of the west. And at that point, we will see more unskilled jobs staying in their countries of origin.
In a recent video interview with Dan Boehm, VP of Sales & Marketing at Spectrum Corp he told me Indian contact center costs are skyrocketing and attrition is very high. He just returned from the country before our interview and quoted attrition rates as high as 60% and wage inflation on a yearly basis as high as 20%.
In a video interview with Mary Murcott, CEO of Novo 1 Contact Centers, a call center outsourcer with 1,600 US based agents – she said her business is to bring outsourced jobs from other countries back to the US with a claimed cost savings of 15% over India or the Philippines. Murcott says she has seen attrition rates of 140-150% as agents would go across the street for a dime more as she says.
Thomas Friedman details how optical fibers have flattened the world and moreover - that Americans are not ready for the ensuing competition