In a nutshell, we have reached a crucial juncture in our economic history: gone are the days we can borrow whatever we want to subsidize ambitious business ideas, buy houses we cannot really afford, or fritter money away on expensive holidays. Walking down Boyslton Street at 7.30pm on Friday night – one of Boston's prime restaurant areas – every restaurant had vacant tables and was taking walk-ins. It really hit home to me that things have finally changed. Years of over-spending have finally caught up with us and we're now feeling the pinch. But whether this was to be a rapid banking meltdown, or a long painful slowdown, this had to happen eventually.
I recall sitting on a panel at at outsourcing conference in New York City back in 2004
, and there were protesters outside, demonstrating their frustration about US jobs "moving offshore". In response, a sourcing attorney declared, "outsourcing provides a great opportunity for the US – we can offload low-value jobs and focus on higher-value, more innovative work". I recall thinking to myself, even then, that that argument didn't quite add up.
While it sounds like a nirvana, the reality is we're competing globally for labor, for making cheaper, better cars, for delivering good quality IT services, for delivering quality finance, HR and supply chain support. If the US is to truly deliver "higher-value", the government needs to invest in education programs that develop this talent. The reality is that the rest of the world caught up. People in Chennai, Manila, Bucharest, Guatemala City, Guangzhou etc are being trained to compete with American, British, French and German workers, and the Internet and new technology have been a huge enabler to make this happen. A good friend who works for one of the leading India-based BPOs confided in me recently, "we should bring over the training leaders from the top Indian outsourcers and have them work with US businesses to get their act together".
What continues to irk me, is the fact that industry has become so focused on making its quarterly numbers that it has taken its eye off the long-term picture. We saw this financial meltdown coming – and did nothing (wasn't the Asian crisis of the '90s warning enough?). We are seeing further deterioration of the environment – and still do little. We saw the US automotive industry grind down to its current predicament – and have done nothing. And we are seeing the IT and BPO industry rapidly develop across the globe – and have blissfully ignored it to meet these cost-containment targets.
And how to we respond? Bailouts. We're now talking about bailing out the flagging automotive industry. How did it come to this? Years of greed, a deterioration of our work-ethics, and eager developing nations determined to get a taste of what we have. It's as if we had a major cardiac arrest and are now hoping we can recover fully from open-heart surgery.
And this time when we do recover (and we will), we simply have to make sure this never happens again. Some will argue this is all about natural economics of globalization and a free market – and they are probably right. However, this time we have truly reached an inflection point.
It's about accepting we now operate in a global economy and that we are competing at a level where we need to work as hard, and as smart, as the next nation. I hope President-Elect Obama can help instill a new work culture in the US. The US people have spoken that they want change, and they have voted in a President promising change. The core question now is whether they are really prepared to change.