|Ali Hussein, writing in ZDNet News, has some insightful observations regarding the global search for human capital. He says that: "In the heated debate about globalization, 'outsourcing' in particular, something critical has been overlooked: It's not always about low labor and operations costs as opponents would like to argue. Sometimes, it's simply about finding talent, wherever, whenever, 24/7.
Although the global market is ever expanding, its breadth and scope seems ever shrinking, thanks to the interconnectedness and instantaneous communication enabled by the Internet. We hear frequently about how the Internet has transformed retail, supply chain and other business processes. It's the new marketplace for goods and services. It's about collaboration. The Internet is, fundamentally, a democratizing force.
The Internet has been used to successfully change the way goods and services are traded. How about intellectual capital and knowledge?
Nowhere are we seeing this more evident than in the huge research and development field, where a shortage of talent can increasingly become a competitive liability. The fact is, fewer and fewer Americans are graduating with degrees in the fields that fuel R&D - science and engineering. According to the US National Science Foundation, while the number of Americans studying science and engineering has declined over the last 10 years, Europeans (Britain, Germany and France) have continued to widen their lead and Asians (India, China, Japan and Korea) have now caught up and exceeded the West.
The United States continues to lead the world in the amount of funding that goes into research, particularly academia. But students in American institutions studying the sciences and engineering fields are increasingly non-Americans who are increasingly publishing more academic papers, applying for US patents, and, at the end of their academic training, returning to their home countries. In effect, the American pie in the global science and engineering community is shrinking. This is a problem R&D-driven companies in the United States cannot afford to have.
What will really hurt America and its ability to compete in the global market is not the loss of support, telemarketing or other call center jobs overseas. It is the loss of talent, pure and simple. Be it through a declining interest among young Americans in the sciences and engineering fields, the reverse trend of their counterparts in other countries or the restrictions of a post-9/11 bureaucracy that make it that much harder for foreign students to study in the US - R&D companies need continuous access to talent.
With the Internet, R&D companies can now 'outsource' for talent in a way that was simply not possible before. This is especially critical for R&D organizations where budgets have been slashed, even as competition continues to heat up. All the while, the cost to bring new, innovative drugs or products to market continues to skyrocket into the billions. It also takes time - sometimes years. At the onset, no one knows for sure where the R&D process will lead; most projects never get beyond the R&D stage. Instead of expending unforeseeable cycles and money on a particularly involved scientific hurdle, R&D teams now have a low-cost alternative: leverage the democratizing force of the Internet to reach some of the top scientific minds in the world - many affiliated with leading universities and institutions worldwide.
The Allure of China
In China, for example, a growing cadre of technocrats is emerging. There is no doubt in anyone's mind that China is the world's largest market. To solidify its place and role on the global stage, China is churning out a nation of extremely talented scientists and engineers whose sheer numbers are dwarfing those in the West. While some Western companies have begun opening R&D facilities in China, many still remain on the outside, strategizing ways in which they can enter this market - and more specifically, capitalize on the wealth of human capital available.
This thriving scientific community - and many more like it in India, Korea, Russia and many other countries around the world - is abundant and ready to participate in the innovation process that fuels the global economy. With R&D opportunities limited in their own countries, their best chance to effect a difference is through access into the laboratories, virtual, if you will, of major companies like Eli Lilly, Proctor & Gamble, Dupont and Boeing.
The Internet has already begun to make this possible. Instead of shipping R&D jobs overseas, some of America's largest companies are using the Internet to supplement their critical R&D process. Instead of giving up on projects, R&D teams can now solicit solutions from thousands of scientists and engineers worldwide. Organizations can substantially free up bottlenecks in the R&D process by turning over their most pressing scientific challenges to the greater global scientific community.
The Internet gave rise to the exchange of goods and services. Using the Internet to exchange knowledge is the next logical step in its evolution. The Internet is pervasive, and we've accepted all the ways it has fundamentally changed traditional business models. Trading on intellectual capital and scientific knowledge is a business waiting to happen. You never know where solutions can come from, and sometimes, it can come from the least likely of individuals, including a petroleum engineer in Kazahkstan, a patent attorney in North Carolina, or a doctoral researcher in Poland. Some challenges, which have been in research for months, can bring in a solution in days.
Innovation is the engine that has fueled America's economic growth. We should embrace all the ways we have to keep innovation alive, even if it means 'insourcing' talent from anywhere in the world."
('It's all About Talent 24/7' by Ali Hussein, Vice President of Marketing of InnoCentive. ZDNet News,, April 21, 2005. Copyright CNET Networks, Inc.)