Editor’s note: This is the last in a four-part series on the history, current state, and moral implications of outsourcing for tech companies. In the first part, we looked at the history of outsourcing. In the second, we explained why tech companies are hiring so much internationally – and where. In the third, we covered what business leaders need to keep in mind to hire overseas ethically. Read them first.
Although less than two dozen employees, the company played an outsized role that benefited other companies that hired technical talent in the area. For years, if someone had to buy the pizza for a local tech meetup, SmartLogic would step in. In 2012, they counted nearly 3,200 slices of pizza eaten at tech meetups they sponsored.
The following year, Flicker argued “objective” reasons why it made sense for Baltimore companies to use Baltimore-based software developers.
Policymakers and civic leaders popularized the “ecosystem” metaphor to champion this logic across the country at the time. Large companies should hire local technical talent and outsource to nearby software vendors, as this investment would benefit them and the wider community over time. A healthy “ecosystem” requires many species filling different niches in some sort of harmony.
With local tech hubs, experienced technologists and entrepreneurs became sharper and they were more accessible to those aspiring to follow their economically productive career path.
In a way, it was an old idea, once called “labour market pooling”. In the early 2000s, the concept was popularized as “clustering effects” by Harvard economist Ed Glaeser and others as an academic term that underlies most urban economic development strategies. Gather enough smart people together for long enough, and together they will invent wonderful things. The largest share of patents comes from university centers and suburban business parks, and the most breakthrough innovations come from cities, according to a 2017 study. Professional networking is following suit.
In the 2010s, pizza-fueled tech meetups flourished as a meeting place for technologists and entrepreneurs. They exposed themselves to new ideas and challenged themselves to sharpen their skills. It was at this time that we Technically started, informing and connecting a cohesive and identifiable community of people who share both geographical and professional interests. This was doubly helpful: experienced technologists and entrepreneurs became sharper, and they were more accessible to those aspiring to follow their economically productive career path.
It came from Silicon Valley, so other major cities in the United States were the first waves, but other international cities soon followed. Then, technologists from all over the world began to engage in American technological work in a different way.
“Starting around 2018, I started to hear more and more startups and small tech CEOs talking about their first international hires or hiring an outsourced company, for example in Eastern Europe,” I said. said a CEO. “COVID and remote work and crazy salaries have made this commonplace.”
The Gains and Losses of the Shift to Globalization
No one I’ve spoken to is worried about the more experienced technologists and contractors. In many ways, they are already the economic winners of this era. What is happening to the places these people once called home?
On the one hand, as if we needed more reasoning, the local economic development strategy should prioritize people, not businesses. Don’t start with “How can we attract or retain this business?” and instead ask, “How can we attract or retain the people who could fuel a given business?”
I fear that the powerful economic coalition of the past 20 years is cracking.
Last year, SmartLogic, the Baltimore-founded company that helped spur that city’s tech dating boom, announced it was going entirely remote. At the time, CEO Flicker told me that didn’t necessarily mean they would never have an office again, but that it was the right move for the time. But in the short term, I think Baltimore is worse off if it doesn’t buy pizza.
When I asked Brian Berkeyprofessor of business ethics at Wharton School of the University of Pennsylvaniahow philosophers might think about prioritizing economic gains, he shared the approach taken by the philosophical tradition he most identifies with, called cosmopolitanism.
“Just hiring people who live in poorer countries doesn’t necessarily do anything morally.”
Prioritizing the best, Berkey’s peers would say we should give more weight to the “absolute degree of improvement” of those in a worse position. In other words, if a job helps someone move from a well-being level of 5 to a well-being level of 10, it is worth much more than if a job helps someone move from 80 to 85 on a scale of 100.
Berkey’s own writings focus on how often we ignore the ripple effects of our moral decisions – how much more does hiring someone help those around them than someone else? I asked him the question: is a hypothetical doctorate. in Poland need help more than a high school dropout in West Baltimore?
“Just hiring people who live in poorer countries doesn’t necessarily do anything morally,” he told me. “What is the right theory of well-being? What makes a person’s life good and how do you compare the quality of life of two people? »
“That’s a lot to consider for a tech company,” he added.
Back to the rational interest of so-called agglomeration effects. The reason cities have endured so many predictions of their decline is because humans’ true superpower only comes when we’re together. Geographical proximity has always facilitated this.
That technological shifts and cultural shifts eventually conspired to make this no longer the case is the big bet companies are making right now.
Businesses are just stories we tell ourselves as an organizing principle. People are what matters. I don’t have a prediction as to whether all software-powered companies will eventually move away completely within a generation or whether physical proximity for work will endure. I know the way we will answer this question is for all of us to make our own progressive decisions. If we make them more thoughtfully, we’ll end up in a better place. This is the purpose of this story.
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This summer, I moderated a panel of business leaders who were building technology teams in Lithuania — itself a budding tech hub. I asked if talking so intensely about a geographic hub for hiring technologists was already outdated. One CEO said terminology will change, but tech communities will still be important because even though we’re all working remotely for an endless number of companies, “we’ll always need someone to have a beer with.”
“The world doesn’t have enough tech talent, period. No country, company or strategy is going to fix that,” he said. “Do the best you can for your business. has in your heart.
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