In Neal Stephenson's world of Snow Crash, the US has had to give up all all value in the economy - all the drive and value has been taken up in what was the developing world.
Imagine millions of well educated Indians and Chinese will graduate every year. They come from cultures where working hard, and being well educated are important. If we think that bumbling along will save us - we are stupid.
Thomas Friedman warns us of this in his new book The World is Flat
John Robb links to this -
The Knowledge Worker Gap
Fortune has an interesting article on the competition between the US and China. This, in particular, caught my attention:
China will produce about 3.3 million college graduates this year, India 3.1 million (all of them English-speaking), the U.S. just 1.3 million.
Which leads them to conclude that a large percentage of the 76% of US service jobs can be outsourced. This is followed by a citation of a new McKinsey study:
A massive new study from the McKinsey Global Institute predicts that some industries could be changed beyond recognition. In packaged software worldwide, 49% of jobs could in theory be outsourced to low-wage countries; in infotech services, 44%. In other industries the potential job shifts are smaller but still so large they’d create major dislocations: Some 25% of worldwide banking jobs could be sent offshore, 19% of insurance jobs, 13% of pharmaceutical jobs. Looking at occupations rather than industries, some fields will never be the same. McKinsey figures that 52% of engineering jobs are amenable to offshoring, as are 31% of accounting jobs. Adding up all the numbers, McKinsey calculates that some 9.6 million U.S. service jobs could theoretically be sent offshore today.
They imply that even if a small number of this potential moves offshore, its effects will ripple through the economy in the form of lower wages/salaries. Some even expect that US salaries will remain at zero growth for some time to come.
