“3.3 Millions Positions of White Collar Occupations Will Disappear”

The Information Technology professionals in Silicon Valley, the financial analysts of Wall Street …

The U.S. weekly economic magazine, the Business Week, has observed that the above professions might disappear in the United States by the year 2015.

In its recent edition (dated February 3rd), the Business Week reported that 3.3 million positions in various white collar occupations in the United States will disappear, quoting from the Forest Research, a research and study organ. “The flow of the globalization changes the formation of the world’s economy,” the magazine explained. It added, “After the industries of shoes and toys moved to the developing countries about twenty years ago, the simple service fields also has flown out there with the outsourcing business strategy. And recently there has been an international reformation even in the high knowledge based fields in the United States.”

▽ American Company? Indian Company? = The Wepro Company is located in the vicinity of Bangalore Airport in India. Five Indian experts in the department of radiology analyze the CT Scans of the patients from Massachusetts General Hospital. The results of the analysis are sent to Massachusetts Hospital on the same day and the dates for operations get scheduled.

An Indian technician of the semiconductor industry does not need to leave his or her home country or family to go to the United States to be employed by an American Company. Since the interchange of information with the main office in the United States is possible at any time through the internet and the on line Image Meeting, the physical distance is no longer an obstacle.

Netherlands’ household electrical appliance company, Phillips, moved its research center to Shanghai, China where they develop TVs and Audios. Leiman Brothers, a security corporation, has its financial analysts in India. The majority of the accounting and financial operations of P&G, a daily goods company, are carried out in Philippines.

▽ Lower Labor Cost but Competent = The Information and Technology experts in Bangalore region is developing the next generation cellular phone chip for ‘Texas Instrument Company’, an American semiconductor business. The annual salary is about 10,000 dollars. To hire an expert of the same talent in the United States, it will cost 7 times more than hiring an expert in India.

To hire an architectural designer in Philippines is 250 dollars a month, compare to 3,000 dollars in the United States. The monthly wages of a database controller in India is 500 dollars in India but 10,000 dollars in the United States.

The number of the degree holder in the latest technology, foundation science, financial technology, and etc is rapidly increasing in the developing countries, thus their manpower is no longer behind the advanced countries.

▽ The crisis for the White Collars in the Advanced Countries = According to the ‘Joint Venture Silicon Valley’, a nonprofit organization, there has been a 20% reduction in the number of the professional IT positions in Silicon Valley since year 2001.

It has been observed that total of 3.3 million white collar positions, including 75,000 from the law profession and 288,000 from the management force, will disappear by the year 2015. The Labor Union of Boeing, an airplane production company, collided with the management when they reduced the workers in the main office in the United States after strengthening the research center in Russia.

It is predicted that the wages of the white collar occupations in the United States will experience gradual decreases. The major IT profession’s annual salary was 130,000 dollars in year 2000 but recently has fallen down to 100,000 dollars a year.

On the other hand, this kind of trend in the United States has been another opportunity for the developing countries. India is expected to employ 4 million people in IT and service labor export and have a profit of 57 billion dollars in year 2008.

Seung-Jin Kim sarafina@donga.com