---------- Forwarded message ----------
Date: Tue, 30 Jun 1998 16:06:37 -0400
From: James Schoening <[EMAIL PROTECTED]>
Reply-To: [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Subject: (ICT-JOBS): The Mega-Mega Impact of ICT
I Chair the IEEE Learning Technology Standards Committee, which is
helping to develop the technical infrastructure for internet-based learning
AND WORKING. Part of my motivation is to help plug 3rd world workers, via
telecommunications, into the global information economy.
How big could global ICT outsourcing get? The below "Teratrend
Theory," which I developed some years ago (but shelved for more concrete
endeavors), claims the U.S. economy will eventually be importing $1 trillion
in information-based productivity. It also explains that trade will be
balanced by exporting an equal amount of high-tech manufactured products.
A few disclaimers: It needs to be rewritten from the current "U.S.
perspective" to a more global one. I do not claim to be an economist, so I'm
seeking feedback from those of you who are. It might at first sound scary,
but it is actually quite rosy if you take the time to grasp the big picture.
James R. Schoening
U.S. Army Communications Electronics Command
Chair, IEEE Learning Technology Standards Committee
http://www.manta.ieee.org/P1484
Founder, Learning Corps http://x3.ieee.org/LC
[EMAIL PROTECTED]
========================================
Teratrend -- An Economic Theory
This theory states that First World imports of 'electronic productivity' will
steadily grow until it exceeds all other imports, and eventually exceed $1
trillion per year in the U.S. (hence 'Tera'-trend) and a proportional amount
in other First World nations. The impact on First, Second, and Third World
economies will be dramatic and overwhelmingly positive.
Today, large software projects are being completed in India. Labor-intensive
CAD work is being completed in China, and then manufactured in the U.S.
Telephone operators are being located in Jamaica and serving the U.S. The
trend has already begun.
The Teratrend Theory predicts that many forms of 'labor-intensive
computer-based work,' tasks that can be completed on a computer and
transmitted back to First World countries, will eventually go overseas, just
as labor-intensive industries such as electronics and clothing have gone in
the past. This will result in the creation of better jobs in First World
countries to replace those that go overseas.
A few examples of the types of information that could be imported include
data entry, software development, bookkeeping, insurance processing, CAD
work, multimedia development, and many forms of recordkeeping. Very little
job loss will result from this type of outsourcing, since in most cases,
employees will move up to higher-value positions. Entire companies or plants
will not shut down based on this form of importation, as often happens when
manufacturing moves offshore. Also, the savings at First World companies
will lead to corporate growth, which will create better jobs within those
companies and the economy as a whole.
An intriguing aspect of this trend is that it will actually increase the
number of manufacturing jobs in First World countries. With the predicted
huge increase in imports, exports will have to increase by about the same
amount to maintain a rough balance of trade. New and better paying jobs will
be created in First World export industries. These will be better paying jobs
than those positions lost in the domestic information sector of the economy,
which is a fundamental premise of free trade.
Adam Smith wrote, in 'The Wealth of Nations,' over 200 years ago, "If a
foreign country can supply us with a commodity cheaper than we ourselves can
make it, better buy it of them with some part of our own industry, employed
in a way in which we have some advantage.
Teratrend will also alter the process by which a Third World economy can
progress to Second and First World status. 'Individuals' will make the
transition, by plugging themselves (via the Internet) into First World
economies. They will gain, through the Internet, First World knowledge and
skills and will be able to perform productive computer-based work, all
without leaving their home locations. This income will filter throughout
their countries to create better jobs for all. Also, unlike many assembly
line jobs that offer little opportunity for growth, information jobs do offer
individuals the chance to enhance their skills and advance to better jobs.
The keys for Third World participation in this trend are fluency in First
World languages, computer literacy, barrier-free commerce, and affordable
connections to the Internet.
Third World countries will no longer be required to build their economies
from the ground up, either by themselves or through heavy external debt.
They will be able to raise their GDP by effectively plugging into the world
economy. It would be almost the same as Third World workers "electronically
commuting" to First World countries to work, but returning to their home
countries to live and spend their income.
Second World economies will also gain. They will be able to take advantage
of the wage differences between both Third and First World economies. They
will also gain from worldwide increases in productivity.
One major problem with Teratrend will be its impact on the global
environment. A growing Third World will want to burn an increasing amount of
fossil fuels and consume their fair share of nonrenewable resources. It is
proposed this theory fully address environmental as well as economic issues.
The U.S. is one country in an excellent position to gain from this trend.
1) English is universal language of information sector
2) Leader in software development
3) Large information sector that can be partially outsourced
4) Strong manufacturing sector that can grow to offset outsourcing
5) Leader in telecommunications and Internet
6) Supportive of free-trade
However, since free trade is a win-win proposition, any and all countries
could gain from this trend. The only losers will be those countries that
restrict the trend.
In summation, Teratrend holds the key to major and sustained growth in any
country that permits and encourages it. This trend has already begun and
will certainly grow on its own; however, any country could accelerate its
pace and seek leadership in the trend by recognizing it, asserting its
positive potential, removing barriers, and coaxing it along. Efforts could
also be made by First World countries to encourage potential Third World
trading partners to remove barriers, install telecommunications, and start
teaching compatible languages.
James Schoening
