Globalization Taking American Hi-Tech Jobs – IBM example

The impact of globalization on the US economy has been mostly cast by the media and politicians in light of the disappearance of many manufacturing jobs and the swarms of cheap products imported to fill our stores. We should not think that just because we invented the internet and most of its prominent toys that hi-tech jobs are immune from the same search for low wages by corporate America.

We need to remodel our thinking about large corporations. We may think of IBM, GE, Google, Apple, and countless other corporate behemoths as American, but if you look at where their sales are and where their sales growth is occurring you really need to cast off this identification and see them as independent of any nation state, truly global in nature.

IBM employees collaborate in a casual work space at its new offices in Bangalore’s Bhartiya Center of Information Technology. Credit Philippe Calia for The New York Times

For example, IBM reports it sales by these geographies:

  • The Americas
  • Europe/Middle East/Africa
  • Asia Pacific.

Total IBM sales in 2016 were $80 billion with $38 billion (48%) from Americas; $25 billion (31%) from Europe/Middle East/ Africa; $17 billion (21%) from Asia Pacific. However, IBM’s employees are deployed quite differently. Of its 380,000 employees 130,000 are in India (more than double the number in 2007) while the US based employees have shrunk from 130,000 in 2007 to under 100,000 today.1

The challenges for the US economy are obvious. Low wage mental work is every bit as compelling for corporations as low wage physical work. The ease with which mental work can be moved about is quite extraordinary. The internet forms the backbone providing extremely flexible and reliable work platforms, storage, and meeting facilities. It is just as easy to hire a software engineer for a company located in Hudson, NY from Troy NY or Lithuania or India and many other locations. One hardly has to be an IBM to participate in offshoring mental work.


Also published on Medium.

<h3>Footnotes</h3>

  1. ”IBM Now Has More Employees in India Than in the U.S.” by Vinod Goel 9/28/2017 NYTimes. https://www.nytimes.com/2017/09/28/technology/ibm-india.html