Wrong Side Of The IT Ecosystem

May 13, 2012

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I find it ridiculous that people are blaming Apple for job creation in China as opposed to in the US. People are also debating how US might in-source some of these manufacturing jobs to compete with China who has sophisticated manufacturing abilities and large skilled labor force supporting these operations. They are all missing the point. This is a wrong debate.
The US lost manufacturing jobs to other countries a long time ago. I find it amusing that people expect the high-tech companies such as Apple to create manufacturing jobs in the US. If Apple were to even consider this option we would not have seen the tremendous success of Apple as a company and its products. What Apple created is an ecosystem of people and companies that are doing amazing things with their platform and their devices. It’s a different kind of ecosystem and America should focus on that innovation as opposed to bringing those manufacturing jobs back.
On one side we are whining about the loss of manufacturing jobs and on the other side we have shortage of skilled IT workforce. Try hiring a good developer in the Silicon Valley and you’ll understand what I mean. And yet as a nation we are behind in retraining our existing workforce, attracting students to engineering majors, and fixing our immigration policy for highly skilled foreign workers to meet the increased demand of IT-driven jobs. And, of course, while we wait, Apple is quadrupling its IT investment in India.
America should not play the manufacturing game with China or for that matter with anyone else. We are at such a loss. Let’s play the game that we know we can win — technology-driven innovation. When I work with customers’ on daily basis I come across so many opportunities that we are not looking at. We can use the technology, that we have built, to our advantage in the industries such as healthcare, agriculture, public sector etc. A combination of cloud and mobility could take us long way.
We’re looking at the wrong side of the IT ecosystem. I don’t expect the hi-tech companies to hire low-tech workers in the US. But I do expect hi-tech companies to create jobs in the US at the other end of the ecosystem via the opportunities to consume their technology and innovate in a different sector. A lot of people are missing this point. I’m talking about an ecosystem where Apple has paid out more than $4 billion to the developers. Why are we not talking about these jobs? Apple has more than $100 billion in cash, but what doesn’t get much discussed is that a large part of this cash is overseas. Given the current US tax laws, Apple can’t/won’t bring this cash back into the US. This might make Apple acquiring or investing overseas. We do have an opportunity to reform the tax laws to deal with such a global situation (that we never encountered before) to encourage the hi-tech companies to invest into R&D in the US and not overseas.
When you look at the big picture, having a job is merely one piece of contributing to good standards of living. What about access to affordable healthcare and college education? There’s a significant opportunity to apply technology built in America to innovate in these areas. We are barely scratching the surface of what’s possible in healthcare as well as in education. We are living in such an antiquated and inefficient system.
Another industry that has seen less than desired technology innovation is agriculture. Take a trip down to central California to see the potential. At 2008 Olympics in China, Michael Phelps winning 8 gold medals was obviously the biggest highlight for us, but people in Watsonville were super excited because China allowed the US to export Watsonville strawberries for the Olymipcs. Recently, India relaxed the laws (that are still being challenged) to allow 100% foreign investment in the retail sector opening up the doors for Wallmarts of the world. Any guess what’s the biggest challenge in retail operations in India? A non-existent cold supply chain and lack of reliable infrastructure. We take a lot of things for granted — nationwide freeways, strong governing bodies such as FDA, and size of the country. We do have an opportunity to excel in certain agriculture areas and employ a lot of Americans. We need to recognize what our real strength is and look forward as opposed to look backwards.
I am a geek and a technology enthusiast, and perhaps a little naive. But, I know for sure, we aren’t pushing the technology envelope as much as we should.
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