Small Business

Grasping, Greedy, Unpatriotic? Not Me


By Christopher Kenton

I'd spent the previous two years watching my business go down the economy, watching my assets disappear, and watching my future crumble. But I was tired of lying awake and staring at the ceiling. I was tired of agonizing over what would happen to me. I was tired of railing against the big companies that found ways to do well in an environment that was crushing me and my employees. As far as I was concerned, I needed to adapt to the new economic environment, to understand what it would take to survive and rebuild my business.

What I found most interesting in the letters from readers was the implied argument that, somehow, U.S. technology jobs should be protected. Anything else would ensure the destruction of our technical markets, writers insisted, if not our economy at large. The most compelling argument in this camp came from an unemployed engineer who pointed out that he could no longer afford to buy a new car, dine out, or go on vacation. He even itemized the products and services he would no longer buy to illustrate the recent layoffs' rippling effect on the economy. When you multiply that by the millions of people currently out of work, it is indeed troubling.

WAY OF THE MARKET. In the long run, however, even the best plans for protecting U.S. jobs strike me a recipe for disaster. If I don't have to worry about my job, I don't need to be the best I can be. I don't need to waste time learning new skills. I don't need to work harder to make my company succeed. In short, I don't need to compete. Not only is this the antithesis of American capitalism, but how long would it take for the quality of U.S. products and services to fall behind other nations that are compelled to try harder in order to survive? India, China, and many other advancing Asian nations are able to compete for our technology jobs because of the enormous strides they are making in technical capabilities -- and they aren't likely to slow down.

The bottom line, literally, is that free markets rapidly migrate to cheaper sources of raw materials and labor. Anyone who shops for lower prices puts this principle in motion. To try and hold back the tide is to ignore a law of economic physics.

Does that mean I'm a cynical advocate of globalism, as some readers claimed? No. I simply believe we're at a point of major disruption in our economic system -- one that is painful for a lot of people, including myself -- as skills and technologies become more universally available. But as a student of Systems Theory I see chaos as a natural part of the cycle in any system. Every revolutionary step in the evolution of a system is accompanied by disorganization. That means that immediately following the pain, there is opportunity for those who are willing to find it.

CREATIVE DESTRUCTION. That means continuing to lament my fate at the hands of a ruthless economy, or trying to figure out how to reorganize my business and prepare for the next wave. Exploring the potential for cheaper offshore labor certainly does threaten the jobs of my technical employees. But if I'm successful, it will open up opportunities for new employees to manage the fresh load of projects I will be able to bring in with cheaper prices. If I had to put a stake in the ground and predict a trend, it would be precisely this: Technology production jobs will move overseas while technology research, design, and management jobs will grow at home.

In my next column I plan to address the related question: How did we get here? While many blame the displacement of American jobs for our economic woes, I have a different point of view based on my experience in Silicon Valley. In the meantime, I'm interested in hearing your perspectives. I learned last week that many of the most angry letters conceal the most compelling stories, and I'll continue to try and bring those perspectives to the table.

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