Globalization, computing, and their political impact
P ERCHED AS WE are on the crest of the current tech and computing enrollment boom, it is hard to remember the dark days of the early 2000s. The NASDAQ Index peaked on March 10, 2000, declining almost 80% over the next two years. The stock market crash in the U.S. caused the loss of $5 trillion in the market valuations from 2000 to 2002. Computing enrollments in North America went into a steep dive. At the same time, the Internet enabled the globalization of software production giving rise to the phenomenon of offshore outsourcing. There were daily stories in the media describing major shifts in employment that were occurring largely as a result of software off shoring. Combined with the dot com bust, these reports raised concerns about the future of information technology (IT) as a viable field of study and work in developed countries. In response to these concerns, ACM Council commissioned a Task Force in 2004 to " look at the facts behind the rapid globalization of IT and the migration of jobs resulting from out sourcing and offshoring. " The Task Force, co chaired by Frank Mayadas and myself, with the assistance of Wil liam Aspray as Editor, issued its report Globalization and Offshoring of Software in 2006. The report concluded that there is no real reason to believe that IT jobs are migrating away from developed countries. The passing decade has vindicated that conclusion. But while the report conceded that " trade gains may be distributed differentially " meaning some individuals gain and some lose, some localities gain and some lose; it was focused narrowly on the IT industry. Had we looked at the broader impact of globalization on the economy, we might have reached somewhat less sanguine conclusions. Globalization exerted tremendous competitive pressure on manufacturing in developed countries. It is instructive to examine the response to this competitive pressure, taking U.S. manufacturing as an example. To survive in the intensely competitive global economy, U.S. manufacturing had to increase its productivity dramatically, substituting technology for labor. U.S. manufacturing productivity roughly doubled between 1995 and 2015. As a result, while U.S. manufacturing output today is essentially at an all time high, employment peaked around 1980, and has been declining precipitously since 1995. Neoclassical economists argue that when technology destroys jobs " people find other jobs, albeit possibly after a long period of painful adjustment. " They are definitely right about the painful
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