Wayne Rosing


Dr. Rosing related that he had posed the following question to four or five friends of around his age who had lost jobs in the dot-com bust: “When was the last time you taught yourself something new—that you really took the trouble to learn a new field?” The initial response, he said, was most frequently “a blank stare,” followed moments later by an answer of 10, 12, or 15 years ago. That many individuals did not stay current was one of the biggest single problems the United States faced, because in a global economy those who do not keep their skills at the cutting edge are inevitably sidelined. What the country needed was a system that created extraordinary incentives for people to take charge of their own careers and their own marketability. Much change would be necessary because there was a lot that did not work well; the colleges, for example, were designed for young, full-time students. Awareness would have to be built, but the situation was not without opportunity.

Kenneth Flamm

University of Texas at Austin

Noting that the day had begun with “lofty questions about ‘What is software?’ ” and concluded with “a somewhat tense discussion” of offshoring, Dr. Flamm proposed to offer four points tracing the route from one to the other. The first harked back to the history of the semiconductor industry, which became one of the United States’ first to go offshore when, in the mid-1960s, virtually every manufacturer moved the unskilled, labor-intensive assembly part of the production process to Hong Kong. A decade later the only assembly that remained in the United States involved relatively short runs of very specialized product that had to be fabricated close to the market. Meanwhile, the commodity production had stayed in Hong Kong only until wages for unskilled labor were bid up there, when it moved to Korea. The same pattern was repeated several times: Production moved on to Taiwan, then to the Philippines, then to Malaysia, each time staying only until wages had gone up. Even in an area in which one could expect a relatively undifferentiated labor input going into the production process, the supply of unskilled labor was not infinitely elastic.

Second, Dr. Flamm maintained that the offshoring of software services in many respects greatly resembled the semiconductor story of the 1960s, the exception being that very skilled labor rather than unskilled labor was now involved. Central to the movement of semiconductor manufacturing abroad had been the growth of the air-traffic and telecommunications infrastructures. Transport costs are very low for the semiconductor because of its small physical size and light weight; and, by the mid-1960s, telecom had developed to the point

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