Silicon Rust Belt - will we outsource the most important new technology?

I lived overseas for much of the pandemic and thus had to think much more about international tech than I did while I was in the US.

I have written previously about specialization, outsourcing, and what life may be like for American software developers. I have personally been replaced by less expensive workers on three different occasions. Of course this topic is personal, but it extends beyond that to the culture we may want to have.

Looking at the Careers page on Deel’s website, you can see one a possible future emerge. When it comes to sales and service roles, they have plenty of opportunities open for people in North America, but these are mostly in sales and HR.

When it comes to writing code, that is something that is relegated to LATAM and APAC.

This is just one of many companies where I saw this model. There was one geospatial company that I looked into that had all of their sales in the US, but all of their development was done in Poland and Lithuania. Many of the data tasks in a place I worked at were moved to consultants in the UK, who made around 60% of what I was paid as a worker from the US.

I recently had drinks and appetizers with the CTO of Turing. It was an interesting talk, though he was rather defensive for the first half of it. He had some prepared lines for skeptics and critics, such as “democratizing access to AI”, “leveling the playing field”, “making funding go further”.

I couldn’t escape the thought that it is probably a bad idea for the creation and fine tuning of important AI models to be done overseas.

To me, it sounded like moving specialization and core strategy overseas.

So are we going to repeat what we did with manufacturing over the last few decades? Will core components of businesses that sell to Americans move to faraway places? Will we have a situation again like we have had with factories, where a few years of “savings” for leadership resulted in a near complete loss of local skills. Some might think this sounds dramatic, but I urge readers to think about this from this leadership’s point of view. Why hire one person who wants more than $200,000 per year to work from a US city when you can get two of the people doing that same work in Brazil or even three of them in North Africa? With companies like Deel and easy international communications, this is a very real and easy thing.

Oftentimes people suggest those against outsourcing have some sort of animus towards the places where the jobs are moved to, but it is much simpler than that. Anyone would get upset at people who go to your bosses and offer to undercut you. And I am not at all upset with those companies who do it. They are playing the game the best they can and are obligated to their investors to make the best use of the money. And it makes sense for overseas companies and programmers to go after customers who can pay them more, and who can offer them the prestige of having more people impacted by their work. My frustration lies with the policymakers and culture shapers that have enabled this.

I prefer to live in a society of builders, not middlemen, and I don’t think it is culturally healthy to just surrender this nascent industry.

Whether it is by tax, tariff, or other mechanism, I think it is something that policy makers should consider.

We have wisely have restrictions on medical and financial data. Should Americans have a right to know if models that determine their credit score are developed overseas? Should Americans know if their diagnosis came from a model trained somewhere else?

There are many pertinent questions in this area, and I am happy to dive deeper into this topic with anyone who wants to know more.