Not Made in the USA

Software Development jobs offer decent pay in the United States, but this will not last. Global competitors pay much less for equivalent labor, putting U.S. software vendors at a disadvantage in an increasingly global market. The cost of software development in India, for example, is roughly a tenth of what it would cost in the United States. The consequence is that a video game, sold online to a global audience at the flat rate of $60 USD, is far more profitable when produced at the costs of India than at those of the United States. A similar trend happened in the textiles industry--very little of what is worn in the United States is produced anymore within its borders. The United States is so ill-fit to compete in the textiles market that it is cheaper for one to import these goods from halfway around the world than it is to pay someone to produce it locally. The United States will be even easier deprived of its holds on software production, where geography poses no obstacle as it did to the shipment of clothing--one downloads their product from across the globe, just moments after purchasing it. The United States cannot sustain this discrepancy between the cost of its own labor and that of its competitors indefinitely. Unless that gap closes, the United States will inevitably become excluded from the world's software production chains, and software will be another primarily-imported good.

Comments

  1. The Computing Experience by Maycol FormentonNovember 22, 2020 at 8:38 PM

    I was unaware of this, very interesting and important to be aware of. Hopefully we can close the gap!

    ReplyDelete
  2. Charlie SilvaNovember 24, 2020 at 9:47 AM

    I think the reason software development will be more resistant to outsourcing than other industries is that a large amount of development is working with product managers who know the customer base very well, and when your customer base is largely in the US your product managers have to be from the US. As a result, the developers will likely also live in the same area so that they can communicate quickly with PMs. Online communication technologies have improved a lot, but they still can't beat having face-to-face communication.

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