I have taken the liberty of forwarding this post to another list on the
Future of Work... futurework <[EMAIL PROTECTED]>
regs
Mike Gurstein
/On Tue, 30 Jun 1998, James Schoening wrote:
> I Chair the IEEE Learning Technology Standards Committee, which is
> helping to develop the technical infrastructure for internet-based learning
> AND WORKING. Part of my motivation is to help plug 3rd world workers, via
> telecommunications, into the global information economy.
>
> How big could global ICT outsourcing get? The below "Teratrend
> Theory," which I developed some years ago (but shelved for more concrete
> endeavors), claims the U.S. economy will eventually be importing $1 trillion
> in information-based productivity. It also explains that trade will be
> balanced by exporting an equal amount of high-tech manufactured products.
>
> A few disclaimers: It needs to be rewritten from the current "U.S.
> perspective" to a more global one. I do not claim to be an economist, so I'm
> seeking feedback from those of you who are. It might at first sound scary,
> but it is actually quite rosy if you take the time to grasp the big picture.
>
> James R. Schoening
> U.S. Army Communications Electronics Command
> Chair, IEEE Learning Technology Standards Committee
> http://www.manta.ieee.org/P1484
> Founder, Learning Corps http://x3.ieee.org/LC
> [EMAIL PROTECTED]
> ========================================
>
> Teratrend -- An Economic Theory
>
> This theory states that First World imports of 'electronic productivity' will
> steadily grow until it exceeds all other imports, and eventually exceed $1
> trillion per year in the U.S. (hence 'Tera'-trend) and a proportional amount
> in other First World nations. The impact on First, Second, and Third World
> economies will be dramatic and overwhelmingly positive.
>
> Today, large software projects are being completed in India. Labor-intensive
> CAD work is being completed in China, and then manufactured in the U.S.
> Telephone operators are being located in Jamaica and serving the U.S. The
> trend has already begun.
>
> The Teratrend Theory predicts that many forms of 'labor-intensive
> computer-based work,' tasks that can be completed on a computer and
> transmitted back to First World countries, will eventually go overseas, just
> as labor-intensive industries such as electronics and clothing have gone in
> the past. This will result in the creation of better jobs in First World
> countries to replace those that go overseas.
>
> A few examples of the types of information that could be imported include
> data entry, software development, bookkeeping, insurance processing, CAD
> work, multimedia development, and many forms of recordkeeping. Very little
> job loss will result from this type of outsourcing, since in most cases,
> employees will move up to higher-value positions. Entire companies or plants
> will not shut down based on this form of importation, as often happens when
> manufacturing moves offshore. Also, the savings at First World companies
> will lead to corporate growth, which will create better jobs within those
> companies and the economy as a whole.
>
> An intriguing aspect of this trend is that it will actually increase the
> number of manufacturing jobs in First World countries. With the predicted
> huge increase in imports, exports will have to increase by about the same
> amount to maintain a rough balance of trade. New and better paying jobs will
> be created in First World export industries. These will be better paying jobs
> than those positions lost in the domestic information sector of the economy,
> which is a fundamental premise of free trade.
>
> Adam Smith wrote, in 'The Wealth of Nations,' over 200 years ago, "If a
> foreign country can supply us with a commodity cheaper than we ourselves can
> make it, better buy it of them with some part of our own industry, employed
> in a way in which we have some advantage.
>
> Teratrend will also alter the process by which a Third World economy can
> progress to Second and First World status. 'Individuals' will make the
> transition, by plugging themselves (via the Internet) into First World
> economies. They will gain, through the Internet, First World knowledge and
> skills and will be able to perform productive computer-based work, all
> without leaving their home locations. This income will filter throughout
> their countries to create better jobs for all. Also, unlike many assembly
> line jobs that offer little opportunity for growth, information jobs do offer
> individuals the chance to enhance their skills and advance to better jobs.
> The keys for Third World participation in this trend are fluency in First
> World languages, computer literacy, barrier-free commerce, and affordable
> connections to the Internet.
>
> Third World countries will no longer be required to build their economies
> from the ground up, either by themselves or through heavy external debt.
> They will be able to raise their GDP by effectively plugging into the world
> economy. It would be almost the same as Third World workers "electronically
> commuting" to First World countries to work, but returning to their home
> countries to live and spend their income.
>
> Second World economies will also gain. They will be able to take advantage
> of the wage differences between both Third and First World economies. They
> will also gain from worldwide increases in productivity.
>
> One major problem with Teratrend will be its impact on the global
> environment. A growing Third World will want to burn an increasing amount of
> fossil fuels and consume their fair share of nonrenewable resources. It is
> proposed this theory fully address environmental as well as economic issues.
>
> The U.S. is one country in an excellent position to gain from this trend.
> 1) English is universal language of information sector
> 2) Leader in software development
> 3) Large information sector that can be partially outsourced
> 4) Strong manufacturing sector that can grow to offset outsourcing
> 5) Leader in telecommunications and Internet
> 6) Supportive of free-trade
> However, since free trade is a win-win proposition, any and all countries
> could gain from this trend. The only losers will be those countries that
> restrict the trend.
>
> In summation, Teratrend holds the key to major and sustained growth in any
> country that permits and encourages it. This trend has already begun and
> will certainly grow on its own; however, any country could accelerate its
> pace and seek leadership in the trend by recognizing it, asserting its
> positive potential, removing barriers, and coaxing it along. Efforts could
> also be made by First World countries to encourage potential Third World
> trading partners to remove barriers, install telecommunications, and start
> teaching compatible languages.
>
>
> James Schoening
>
>
>
Michael Gurstein, Ph.D.
ECBC/NSERC/SSHRC Associate Chair in the Management of Technological Change
Director: Centre for Community and Enterprise Networking (C\CEN)
University College of Cape Breton, POBox 5300, Sydney, NS, CANADA B1P 6L2
Tel. 902-563-1369 (o) 902-562-1055 (h) 902-563-1336 (fax)
[EMAIL PROTECTED] Http://ccen.uccb.ns.ca ICQ: 7388855
