Outsourcing creativity

Submitted by Ed Morrison on Sat, 12/04/2004 - 12:01.

One NEO software executive commented last spring at a NEOSA event: We have a tendency to over-estimate the short term effects of outsourcing and to under-estimate its long term implications.

He appears to be right. Forget about outsourcing call centers. Fast Company points us to the real competition ahead: creativity and innovation. "As new funding fuels innovation, Silicon Valley insiders see India and China ultimately eclipsing America as technology markets -- with local companies dominating." Read more.

Our civic leadership in NEO lacks a sense of urgency. I'm not sure what explains it. But if you go to China frequently, as I have done over the past fifteen years, you see how quickly the global economy is shifting. Here's one story to illustrate.

In 1993, the United Nations Development program sent me to Shenyang, in northern China's Liaoning Province, near North Korea. Shenyang happened to be the site of General Motors' first joint venture in China, GM Jinbei. The project involved assembling knock-down kits of light duty pick-up trucks.

As I toured the facility, I heard the story of repeated failure. The product was wrong for the market. The labor force for the joint venture was inflexible and unable to respond to Western management. The three GM executives running the joint venture were hopelessly out of touch.

Now fast forward eleven years. This fall, I was driving around Beijing in a Shanghai Buick Regal, a mid-sized sedan with the fit and finish of a U.S. luxury car.

Meanwhile, back in Shenyang, GM's joint venture introduced Chevy Blazers in 2000. Read more. Last spring, GM announced that the Shenyang joint venture was being restructured with a new product portfolio.

The biggest mistake we are making in NEO is that we think we have time.

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