Who loses in Automation and Outsourcing? (A story with a twist)

Yesterday I had a weekly Zoom call with an old colleague of mine. We often reminisce about working together in a tech company in SF after the boom of 1998 and before the crash of ’08. “He did a screen share of one of the Boston Dynamics robots doing a somersault and hopping onto a wooden crate. “Yep. Looks like those robots could easily be our next police force, factory technicians, replacing a large portion of our industrial workforce”, I replied. The list of entire industries upended by robotic automation is endless. But the common assumption is that there are patterns to this trend. We tend to think that all labor intensive and manual jobs will eventually be obsolete — it’s just a matter of time before the robot apocalypse has been fully realized.

My colleague then laughed and shared a different twist which involved a young women who was an engineer and created mobile apps for our previous employer. Her job was to create apps for the company website which runs on all mobile devices. This Stanford graduate living in North Beach, San Francisco became so good that she wrote a program which enabled her to outsource the development to a programmer in India, who would feed scripts into their server enabling the company to continually develop and debug their mobile apps. This allowed her to sit at her desk and fulfill her passion for gaming, ALL DAY. After a few months the company was doing an audit on their bandwidth and discovered huge amounts of data flowing into the company from India. They traced the flow of data back to her computer and discovered that she had outsourced the development work of her whole team to a single competent and solo programmer in Mumbai. Thus ended her subsidized gaming gig…

As we look at the pitfalls of automation and outsourcing, we don’t only risk our laborers and industrial engineers, car manufacturers and sim card installers, we also risk our whole labor force of tech engineers and creators. With rents in major tech hubs like San Francisco and New York, what happens when we master outsourcing innovation?