Bacon Bytes

James A. Bacon

Reason #1 to Lose Sleep at Night

We're competing against India, a country with four million people of genius-level I.Q.s who speak fluent English and work for a fraction of what we do.

have mercy!

Four weeks ago in “Nowhere to Run,” I cited the success of Fairfax-based Techbook’s “ Delhi strategy” of out-sourcing labor-intensive IT work. I warned that regional economic development strategies aimed at recruiting back-office operations, fulfillment centers and other operations employing semi-skilled IT labor could be built on quicksand. Well, folks, the situation is going to get a whole lot worse before it gets better.

India’s $10 billion information-technology industry grew 20 percent between 2000 and 2001 -- driven by a 29 percent increase in exports. The surge took place in face of a slowdown in the U.S. economy accounting for two-thirds of India’s market. According to NASSCOM, an Indian IT trade association, the future looks bright. More than 270 Indian companies have set up subsidiaries, offices or marketing alliances in the U.S. For more information click here.

Think of it: India, a land of more than one billion people, is home to more speakers of English as a first language than even Great Britain. Individuals with an I.Q. of 140 or higher account for 0.4 percent of the population. Therefore, India is home to roughly 4 million geniuses. If the Indians can identify these talented citizens, provide them with college-level educations, teach all of them English, and move them into the nation’s most vibrant economic sector – information technology – what chance do you give Virginians of ordinary intelligence and a couple of years of community college under their belt?

Reason #2 to Lose Sleep at Night

We're competing against China, a country with five million people of genius-level I.Q.s whose English isn't so good but who are getting connected to the Internet in a big hurry.

While we’re on the subject of India, it can’t hurt to obsess about China. The Middle Kingdom is fast becoming the workshop of the world, building its manufacturing sector on a base of an inexpensive but increasingly competent workforce. Americans have generally reassured themselves that while the Chinese enjoy considerable advantages in labor-intensive manufacturing, they are no match in products requiring sophisticated technology and processes.

Now comes an e-mail demonstrating that the mainland Chinese are no more satisfied in the 2000s to settle for low value-added work than the Japanese were in the 1950s and the Taiwanese and Koreans were in the 1970s. The difference is there are roughly 1.3 billion Chinese compared to less than 200 million Japanese, Koreans and Taiwanese combined.

“Are you seeking partners in China? … Panfine Group is very suitable for customers who want a partner familiar with China's resource service and production! For more information, please visit our web-site: www.iampanfine.com.”

Panfine, which has corporate offices in Tapei and Shanghai, is branching out from its manufacturing base into distribution. And through its e-mail marketing, it’s taking the initiative in identifying new partners. Here’s what the company offers:

1. “Assembling & Production: Educated labor and modernized plant; it will be advantaged in assembling and production for all kind of products.

2. “Distribution: We have strong selling channel that help customers who intend to distribute their products in China.  Furthermore, helping customers to distribute the finished goods to worldwide channel.

3. “Warehousing: We coordinate customers’ “Zero-Stock” policy and manage the material and products in our warehouse for them.”

I might add that, based on a population of 1.3 billion, China has close to 5 million inhabitants with genius I.Q. If it makes you feel any safer, Panfine’s web masters could polish up their English. And their naïve use of spam to contact obviously inappropriate businesses like Bacon’s Rebellion suggests they have a long climb up the learning curve.

But watch out! According to the Neilsen Ratings people, China has just surpassed Japan in the number of people connected to the Internet. (More info.)

-- August 19, 2002