Some stuff clearly can’t be outsourced. Barbers and construction workers kinda have to be on-site, y’know? Almost everyone else - CPAs, MBAs, and CFAs are no exception - could have their jobs done by a guy in southeast asia. So yes, theoretically my job (small and micro cap research for a small mutual fund) could be outsourced. Do I see it happening? No, or at least not for some time. I suppose it’s possible we’ll see it in my lifetime, but the control that you give up in outsourcing work and the perceived lesser quality of foreign competition in some fields are tough tradeoffs to swallow. The main driver for outsourcing is to reduce cost - not to get an improved product. In an industry as lucrative and as competitive as money management, I’d be surprised if cost competition got so fierce that outsourcing became the norm, but you never know.
ManMythLegend Wrote: ------------------------------------------------------- > king_kong Wrote: > -------------------------------------------------- > ----- > > What about exotic dancers? > > You could put them on video live from Mumbai. A lapdance wouldn’t be quite the same.
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Right now things are moving towards equilibrium. I can tell you that in many ways labor is quite expensive over here in India if you are referring to someone that is pretty well educated and competent in communication. There are unemployed college grads in the US that would probably love to earn what some people are making here if you were to adjust for living expenses. As this equilibrium sets in it will become less and less efficient to outsource your operation overseas. In fact, I do not think we should outsource cheap labor. I think we should bring it in to the United States legally on a temporary no citizens benefits basis the way that Dubai does. I think its a massive deadweight loss to hire college graduates to wait tables and wash dishes. We should have guys from Uttar Pradesh doing that for us and use the saved money to subsidize higher level education for American citizens. I see this in India amongst “elite” indians. No wonder these guys get into top schools. They have literally teams of people coaching them, preparing their essays, doing just about everything they can to make them into solid Ivy League candidates. Imagine how much better you could be if an army of people took care of your errands, tutored you, and coached you in everything you did? The whole comparative advantage thing works really well for us if we train for the higher level jobs while others do the low level jobs for us.
ChickenTikka Wrote: ------------------------------------------------------- > Well, this training of people in rich countries for high end jobs is sort of happening, right? Most US people don’t have teams of people coaching them to do well in life. However, compared to people in poor countries, US people do have access to superior education, guidance counseling, computers, and money to invest in extra-curricular activities. As a result, US people are more likely to have cushy “high level” jobs compared to people in poor countries. And as you probably have noticed, US people *are* using poor immigrants to wash dishes or to do other menial jobs. If you live in a place like California, this is very apparent. There are a multitude of other things to consider also: people in high wealth countries have resources to invest in mechanical conveniences - how many people in India have washer/dryers? Compared to the US, how many kids in India have to work in family businesses to help their parents get by? All these factors allow US people to focus on productivity, rather than running errands. TLDR version: The stuff you are talking about is happening, just in different ways, and not to the extreme that you are describing.
Part of the problem is that the high end jobs don’t require a few months of retraining - they take YEARS of training. The answer to structural adjustment problems in developing countries in the 1990s was “invest in education so that you have a more flexible labor force.” So that people who sold groceries could learn to do inventory management or something marginally higher on the skilled scale. But as you get to higher end jobs, it takes substantially more education to change from being, say, an equity analyst on healthcare, to being a doctor, or even a pharmacist. And if these jobs get outsourced, or internetted, or your clients decide they can’t afford to have a high end service anymore, then you’ve invested both dollars and years into a profession that now doesn’t exist, and whose skills don’t actually transfer very well. Heck, even in finance, you find people who say, “I’m sorry, you’re a financials analyst, clearly you have no transferrable skills for analyzing the healthcare sector.” The real worry that’s been on my mind for over a decade is “What if education isn’t enough?” Yes, it’s important to have a labor force that is smart enough to learn a new skill, but I’m very worried that we are overhyping the value of education for labor mobility.
bchadwick Wrote: ------------------------------------------------------- > Part of the problem is that the high end jobs > don’t require a few months of retraining - they > take YEARS of training. > … > The real worry that’s been on my mind for over a > decade is “What if education isn’t enough?” Yes, > it’s important to have a labor force that is smart > enough to learn a new skill, but I’m very worried > that we are overhyping the value of education for > labor mobility. Are you answering your own question? Education is likely not enough. Where I am at the experience, the people you know and the people that trust your skills are the ingredients that matter. The CFA + a PhD get you to the point where people say: “Well, he probably is not stupid.” The trade off? People have been outsourcing a lot, so it’s harder for locals to acquire the experience, and the network that comes with it. I know of entire job families for which we recruit from other countries because we lack experienced locals, and these countries include India. I Don’t think my position can be outsourced, people trust my advice, skill and leadership. However, there is always competition. I still think every manager, even sales functions get competition from people that perform equally at lower cost. And that’s not changing if you run your own service business.
My position can’t be outsourced because I handle millions in cash sometimes.
ManMythLegend Wrote: ------------------------------------------------------- > mo34 Wrote: > -------------------------------------------------- > ----- > > Over the long term (after I’m gone) , the only > > jobs that will be left in the US will be in > sales. > > Everything will be gone. > > What about ride operators at theme parks? Would > be difficult to outsource that responsibility to > India. That will be computerized off-course. The guy just pushes a button now anyway.
ChickenTikka Wrote: ------------------------------------------------------- > My position can’t be outsourced because I handle > millions in cash sometimes. By definition, you have already been outsourced.
I am an Indian myself, so I am trying to look at this debate from both sides. The client in particular, which spured my post, typically hired CFA/CPA’s with MBA from the likes of Columbia and Chicago. I had an interesting conversation as well from a fundamental equity analyst at a small mutual fund who was telling me that the amount of pressure coming from ETFs to provide alpha was incredible. Their clients (both retail and institutional) are pushing hard for that alpha generation and if they don’t deliver it, they’ll quickly move to the index. They don’t cut much for slack. The indexing management can very easily move to India, Singapore, or Poland.
higgmond Wrote: ------------------------------------------------------- > ManMythLegend Wrote: > -------------------------------------------------- > ----- > > king_kong Wrote: > > > -------------------------------------------------- > > > ----- > > > What about exotic dancers? > > > > You could put them on video live from Mumbai. > > > A lapdance wouldn’t be quite the same. If you mean you wouldn’t have to smell “raunchy” poon, then I agree.
I got a buddy that runs his own hedge fund out of his basement. He’s got about 200 Mill AUM and has no full time employees. He pays an Indian firm 50k a year to make models for him and takes the 2 percent plus 20 all for himself. Classy.
ChickenTikka Wrote: ------------------------------------------------------- > I got a buddy that runs his own hedge fund out of > his basement. He’s got about 200 Mill AUM and has > no full time employees. > > He pays an Indian firm 50k a year to make models > for him and takes the 2 percent plus 20 all for > himself. Classy. He manages 200M by himself? Is that a joke? Why?
supersadface Wrote: ------------------------------------------------------- > Some stuff clearly can’t be outsourced. Barbers > and construction workers kinda have to be on-site, > y’know? Nurses, teachers, cops and firemen too.
Forgot CFA procters too.
king_kong Wrote: ------------------------------------------------------- > What about exotic dancers? I would not want to see that outsourced to India :S
Exotic Dancers/Hookers are one of the few things Indians import. Anytime you go to a highclass bar you will always see some wealthy guy’s son and his possé with their ukrainian hookers. Classy. ManMythLegend - Not sure what you mean? Is 200 mill that much for 1 guy to handle? He outsources all the admin stuff.
Become a private wealth adviser - zero chance of your job ever being shipped offshore
Really? Looks to me like the entire swiss private banking industry is being outsourced to singapore these days.