A Case for Outsourcing

I love airport business lounges. Aside from the usual perk of getting free food and waiting in an area more serene and quiet, I find them a great people watching area. Airports in general are great for people watching. The business lounge, though, gives me a reflection of the country’s society.

Here I sit in one of Tokyo airport’s lounges and I see many Japanese, a smattering of foreigners. The subservient culture of service providers is evident in the scattering and ducking female attendants. But what struck me the most is the sheer volume of Apple notebooks, iPods, and iPhones used by the Japanese clientele. We’re talking about a nation that exemplifies the example of a tech gizmo crazy customer base. Japanese electronics are flooding and taking over the American market. Just look at our living rooms. Here, we have the Japanese toting Apple gadgets, wearing jeans, carrying laptop backpacks. Oh, the classical staid formal black-suited Japanese businessmen were present, but even their styles are beginning to loosen up with corduroy slacks, jeans, or *gasp* a gortex jacket.

This isn’t just a case of Apple’s success but, to me, an example that, despite the economical woes we are riding through right now, American ingenuity still trumps all the fast growing emerging economies. The difference is we are no longer a major exporter of products and materials. Face it. The days of Ford manufacturing power are very simply over.

That brings us to the thorny issue of outsourcing. As American standard of living went up, so did the cost of labor. You can’t expect the American factory beltline worker to live off $3/hour when a gallon of gas is more than $3. But how many of us can afford a $300 pair of sneakers for our kid just to be able to participate in physical education class in school? That would be my guesstimate of how much sneakers would cost if they were made by the American workforce. For me, $100 is already expensive for my regular running shoes.

Outsourcing is painful as we learnt the past ten years. But necessary. It is a business being efficient in leveraging a global market. If we export our brands, we have the same capability to export our labor distribution. Companies are learning to cut costs and utilize a whole new scope of resources opened to them. That’s smart business. The union Joe and Jane might have been hurt in the paycheck, but the overall American consumer benefited.

Back to my airport lounge. What we continue to underestimate is what we do export. Our image and our standard of living. Countries in East Asia are adopting American styles, in dress, in fashion, but indirectly also in thinking. Fifteen years ago, the stereotypical Japanese businessmen couldn’t be any more starched and proper in appearances than if they came out of a bronze cast. Today, the younger generation of Japanese business travelers are relaxed and electrically lit up as any Manhattan yuppie.

Nor is Japan alone. China has a huge domestic market of material consumerism. While they don’t buy American brands, there is no doubt the Western styles hugely inspire the domestic brands. Everywhere I go, people are fascinated to find out that I am an American and constantly pepper me with “is it true that Americans have…” questions. We clearly still maintain the bar of a good life in many foreigners’ eyes.

As long as major names such as Facebook, Google, Apple, Twitter, Palm are forefront everywhere we go from providing Egyptians a means for a grassroots protest to being the primary business tool for business, we prove that we also maintain the bar in innovation.

We’re not perfect by any means. We’re also stuck on the notion of being a manufacturing powerhouse. We base our comparison on the post World War II success and accession to global power. We are less of those images today than we used to be and we keep bemoaning the loss of “the golden years.”

Times change. Countries change. We are no exception but we can’t seem to collectively understand that.

As long as we cling onto the image of being an exporter of the 1950s, we loose our objectivity in planning for the future. Archaic and misplaced notions make us less adaptable to the change we actually face. Outsourcing is good for our companies.. and our workforce has not picked up on that as quickly as the firms.  Admit it. Union Joe is not the foundation of our future economy. He’s of the past. We will continue to rock in the unpredictable economy until we realize that to maintain our footing and launch on, we have to establish a different idea of what American productivity looks like.

And we will. It just may take some adjustment. We need to take our frame of reference away from the mold of the Henry Ford example. Those who do work in manufacturing will take a hit and some of them will take a long time finding an alternative, if ever. The context of a successful American workforce is different from what we are familiar to think of it. Fortunately, for us, we still have the the Jobs, Levis, and Zukerberg who are willing to be creative, pursue their personal ideal. Whether or not an individual achieves their levels of fame and credibility, anyone who aspires to achieve on his or her own individual way as they had ultimately help us maintain our edge in the global economy. And that ambition is exactly what it means to be American.

As I wrap up here in the lounge, the guy sitting next to me has a phone going off. And the ring tone? Lady Gaga’s Telephone.

So, how can I not think  that we’ll make it out OK?

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