Recently in this space I’ve written couple of articles about immigration, making reference to the experiences of my grandparents. But the global labor market is now very different than it was a century ago. Although the United States is still a magnet for immigrants, many immigrants later return to their home countries, and some workforce migration even goes in the opposite direction. This week I came across a couple of articles about these phenomena.
One article, “Collaborative Advantage,” by Leonard Lynn and Hal Salzman (written in 2006), was based on a series of interviews the authors conducted with managers of American technology firms. The authors were concerned about the loss of high-tech jobs in the United States and found that offshoring of these jobs has become a bandwagon: Managers often are offshoring jobs to look as if they are cutting costs, without even doing a cost-benefit analysis to determine whether the savings are real or illusory. The trend also snowballs, as managers find that their local capabilities are so diminished that work on new projects must be assigned offshore. And the trend threatens to be self-perpetuating, if corporations cut their funding of domestic universities as they reduce their recruiting from those institutions.
Lynn and Salzman argue that in this environment, the best strategy for the United States is to maximize our potential for international collaborative work. We used to do all the engineering for new products here (although many of the high-tech workers were immigrants). The value we added to the development process was our expertise in STEM (science, technology, engineering, math), and thus we skimmed off the cream of the work tasks and left the lower-paying manufacturing tasks to offshore workers. Now, however, other countries have developed their own cohorts of STEM workers, in numbers that we can’t hope to match.
Given this environment, Lynn and Salzman argue that nowadays our competitive advantage is to skim off the crème de la crème of the work tasks—to accept that offshore STEM workers will do the lower-level engineering work and to focus here on the most creative, collaborative parts of the product-development process. They point to the success of the information technology industry, which creates its innovative products by bringing together experts from widely diverse disciplines, such as linguists, psychologists, and visual artists.
A good example of this kind of collaboration on an international scale (not mentioned in Lynn and Salzman’s article) is the development work that was done for the Boeing 787 Dreamliner, in which key engineering tasks were handed off to suppliers around the world. For example, the wings are manufactured in Japan, the horizontal stabilizers in Italy, the passenger doors in France, and the cargo doors in Sweden. These foreign suppliers have done more than just stamp out parts. They were involved in the design process, using the Global Collaborative Environment, a Web-based system incorporating a computer-assisted design program developed by the Dassault Group in France, plus components developed by Boeing. Boeing also developed a set of standards for the business processes that suppliers would follow as part of the development project.
This kind of collaboration is something we do better than most other countries, so the authors advocate policies to encourage it. One suggestion is the creation of a visa that allows foreign workers to reside here for three to eight months, which is a reasonable amount of time for collaborating on a phase of a project. They also suggest reshaping STEM education to encourage collaborative skills, especially across international borders. Study (or internship) abroad should be as important for engineering majors as it now is for liberal arts majors.
These recommendations connected, in my mind, with an article in The New York Times last week that profiled some American college graduates who are using China as a launch pad for their careers. Faced with few job prospects here in the U.S., these young people are going to China, often with no knowledge of Mandarin but with skills that Chinese employers value, including understanding of Western culture and a willingness to take the initiative. These expats find that they can advance up the career ladder there much faster than they could in the U.S. Those with an entrepreneurial bent are finding that it is much cheaper to fund a startup business in China. The article implies that most of these young people intend to return to the United States, but they are not sure whether American employers will recognize the skills they will have acquired from their experience in China. I think that American businesses should be actively recruiting people with such a background.