Software Outsourcing Skepticism

Friends know that for a while I have been skeptical about the whole software outsourcing to India story. The real value in software is the connection with the customer/user and that can’t be outsourced. Now Half Sigma does a really good job of generalizing the point:

But what is left for the United States to do if both manufacturing and information jobs are moved overseas? The answer is marketing. Marketing is the craft of linking producers of goods and services with customers. And the customers exist in the United States because we are the world’s richest nation.

Only Americans know what other Americans want to buy. Only Americans know how to create the perception of value where none actually exists. Two days ago I wrote about an $88 t-shirt. The Chinese can manufacture a t-shirt for $1, but they will never be able to figure out how to get Americans to pay 88 times what it costs to manufacture.


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