
Urban Onshoring: The Movement to Bring Tech Jobs Back to America - e15ctr0n
http://www.wired.com/2014/11/urban-onshoring/
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SixSigma
"Reshoring" is on the rise.

The labour costs are rising and those that have survived by expanding market
share on the back of the offshoring wave are finding that the other
transaction costs are beginning to dominate.

In manufacturing, the economic conditions are such that retailers are holding
even less inventory meaning that the order size required to make purchasing in
China viable is no longer optimal, especially with such a long lead time.

Having local control is proving to be more valuable than cheap labour.

[http://www.sciencedirect.com/science/article/pii/S1478409214...](http://www.sciencedirect.com/science/article/pii/S147840921400048X)

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hemantv
This would be awesome for India too, as most of the value created in India
right now is getting outsourced.

This will force companies to create value and capture value inside India.
Initially that would be tough but over long term this can be game changing.

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_random_
Moving IT jobs to Europe should be easy. Salaries are stagnant which is surely
a sign of oversupply of workforce.

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yummyfajitas
I'll stick to India. Indians have a better work ethic ("36 hours/week? sacreu
blue!"), cost less, and the regulatory environment is vastly better. Someone
isn't working out or demand has gone done? Pay them a month or two of
transition, they move on, and everything is finished. No real risk of lawsuits
or regulators coming to bother you.

(The same is not true in the UK, for example, which I'm told is one of the
most relaxed Euro nations. I know someone who managed the RBS shrinkage
process, I couldn't deal with that sort of stress.)

Additionally, your competition for work is reduced since a lot of Indian shops
are simply terrible places to work. If you pay people well and treat your
employees well, they will love you forever.

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thisGuysAccount
What makes so many Indian shops terrible places to work?

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JoeAltmaier
Many folks in India are used to working far harder than Westerners. So we call
it a sweatshop; they call it a day at the office.

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king_magic
Good. Offshoring was and is a terrible idea.

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wyclif
It may have been a terrible idea, but it's hard for tech firms to argue with
"dirt cheap" Filipino labour.

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pjmlp
You mean for the management board, because those of us cleaning the code
during the integrations think otherwise about the real meaning of "cheap".

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JoeAltmaier
Agreed. That promise of something for nothing has led many a team down the
garden path. In the end, its harder to clean up after, than to have done it
yourself.

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amalag
There is also a move to reshore to lower cost areas in the US, not necessarily
urban.

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Pxtl
Absolutely. There are many parts of the USA/Canada that have _enough_
population density and local universities to have a decent talent pool but
aren't SF or NYC.

I'm a big urbanist so my immediate thought is smaller post-industrial cities
with lots of cheap building stock and old universities around like Buffalo and
Pittsburgh, but you could do the same thing in well-gridded suburban sprawl
areas, as long as they haven't hit full-bore gridlock yet (Boston or Toronto
suburbs are _right out_ ).

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santaclaus
> Toronto suburbs are right out

Waterloo seems to have done alright for itself. Well, until RIM imploded.

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Pxtl
Waterloo is far-enough to be considered its own place and not part of Toronto
sprawl.

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Animats
They have people working as game testers. That's a job that's usually
outsourced to low-paid people, but not offshored. As a job, it sucks. Read
"The Trenches" \- [http://trenchescomic.com](http://trenchescomic.com) The
number of game testers isn't that large.

Manufacturing jobs are coming back to the US, though. It turns out that there
has to be about a 4:1 labor cost advantage to justify outsourcing to Asia. US
vs. Shentzen is now about 5:1. The headaches of controlling the work, quality
control, and shipping delays add up. General Electric brought washing machine
manufacturing back to the US.

It only added 200 jobs, though; the new plant is highly automated. The peak
year for US manufacturing employment was 1979. Production is way up since
then. Employment is not.

It's hard to think of anything that really needs a large number of low-wage
employees in a single location any more. Even Foxconn is planning to automate
phone production and cut their workforce way down.

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HeyLaughingBoy
_It only added 200 jobs, though; the new plant is highly automated. The peak
year for US manufacturing employment was 1979. Production is way up since
then. Employment is not._

This. This is the point that people frustratingly ignore when they say "the US
doesn't have manufacturing." We are cranking out stuff like no tomorrow. We're
just doing it with far fewer people.

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mkaziz
Is this something tech people tell ourselves to make us feel better?

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danielweber
You know that the auto industry went through something similar a generation
ago? They thought moving off-shore would work, but it didn't for various
reasons, so they returned, albeit to different locations in the US.

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maxerickson
Ford seems to build where they sell:

[http://corporate.ford.com/our-company/operations-
worldwide/g...](http://corporate.ford.com/our-company/operations-
worldwide/global-operations-list)

I guess some vehicles sold in the U.S. are made in Mexico/Canada, but the
combined manufacturing workforce in those two countries is ~20% of the US
workforce. I guess that list also doesn't do much to capture where subsystems
are being made.

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shitehawk
For the sake of your users, your sanity and eventually your bottom line, good
riddens.

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smaps
So you know for the future, it's 'good riddance'.

