Friday, October 31, 2003

Your Job May Be Safe After All

Martin Geddes argues that longer term - after the cyclical surge to offshore is over - your job may be safe after all.

As a product developer in the USA, I need to have empathy with the needs of the natives to be able to ideate good product solutions to the communications problems they face in their everyday lives. The marketing department needs to communicate to those customers and use social cues (sports teams, historical events, entertainment personalities) that they know will resonate with their audience.

Martin is highlighting the fact that lean suppliers that generate “pull” demand from the market add most of the value (in the value stream) at the last step in that stream. Hence, the local supplier who is intimate with the customer is ultimately going to win in the market. I’ve called the logical conclusion of this “supply chain software development”. The notion that platforms, technologies, components and middleware may ultimately get developed in low cost economies but the finishing will be done in local markets. Just like production manufacturing assembly - components will be commodities which will fetch low prices but be sold broadly. Finished products will be tailored to markets and will sell in low volume but at high prices (relative to the total sustainable market price). I’m talking here about geographically dispersed re-use of software. It might take 15 years for this to play out in full. What we are seeing now is just the beginning of a change. In the short term, there will be pain. In the long term jobs will come back but only to smarter, leaner, software firms who can deliver valuable software on-demand.