Reflections on a Wandering Life.....

Wednesday, January 19, 2005

Had dinner this evening with the dean of the University of Limerick. The Software College here is attempting to set up a cooperative degree program with that institution. Ireland is one of the largest exporters of software in the world, and the Irish are now very interested in outsourcing software development to China. I first became aware of Ireland's ranking as a major producer of software several years ago when I went to work for an Irish software company in Scottsdale, Arizona. But now, even Ireland is looking to move much of its software production offshore, and China is a major candidate for much of this business.

Outsourcing is a big part of China's future. In the last several years, thousands of jobs have moved to China. Many of these jobs are in manufacturing. More and more companies are contracting with factories throughout the Pearl River Delta to manufacture their stuff for a fraction of what they could get the job done for in the United States. This trend has drastically altered many traditional manufacturing communities, especially along the East Coast of the United States. For example, as far as I know, there are no shoes manufactured in the United States. Moving an entire production process to China is a major undertaking. But software can be produced anywhere. It is so much easier to outsource software production. There are issues, of course--chief among them being language. But computer code is very easy to move back and forth from the US to China. Right now, the lion's share of the software outsourcing business is going to India, because English is one of the official languages of India. But China has been very aggresive in bidding for some of this business. And they are getting it, both from the United States, and from Japan, which is not interested at all in going to India. People in India don't speak Japanese.

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