[HN Gopher] How Tech Loses Out ___________________________________________________________________ How Tech Loses Out Author : teddyh Score : 87 points Date : 2021-05-02 13:56 UTC (9 hours ago) (HTM) web link (berthub.eu) (TXT) w3m dump (berthub.eu) | DavidVoid wrote: | > We barely develop any software here anymore. So even very | European companies like like Nokia and Ericsson, that are now | trying to tell us that they are building our European | telecommunication infrastructure. They're actually not, they're | getting that built by other people in other countries far away. | Anything having to do with server and PC development and | manufacturing, there's nothing left of that in Europe anymore. | | This is quite an exaggeration, if not actually an outright lie. | Ericsson's main hub for radio software development is in Kista, | and there are some 3000 developers in Croatia as well. Some of | Ericsson's radios do have their software developed exclusively in | China (to my knowledge at least), and there are also a decent | amount of developers in Ottawa, but to claim that all of | Ericsson's software is "built in countries far away" is highly | misleading imo. The 13,000+ Ericsson employees here in Sweden | aren't just sitting around doing nothing. | jsnell wrote: | While it's easy to nod along to the thesis of the article, I | don't know that I agree with the examples. | | Is the suggestion is that European business has been hollowed out | to being nothing except a sales channel for imports really true? | As far as I can see, manufacturing has been steadily increasing | in the EU for basically at least 30 years, with the exceptions of | two one-off events (2008 financial crisis, Covid). Likewise for | exports. | | And when it comes to telcos, why in the world would we want them | writing their own tech? Very few of them have sufficient scale to | make building their own basic infrastructure sensible. All they | could plausibly be writing is value added services that nobody | actually wants, rather than being dumb pipes. | | (I do think telcos shouldn't outsource their network operations | as a whole. Outsourcing individual commodity functions like DNS | seems kind of reasonable though.) | ipython wrote: | Telcos have historically written some very successful | technology. Unix from bell labs, Erlang from Ericsson to name | two examples. | mcguire wrote: | I started reading the article and immediately had a question... | | " _This is a transcript of my presentation over at the European | Microwave Week 2020, actually held in 2021._ " | | What's a European Microwave Week? Well, it's a conference put on | by the European Microwave Association. | | " _The European Microwave Association (EuMA) is an international | non-profit association with a scientific, educational and | technical purpose. The aim of the Association is to develop in an | interdisciplinary way, education, training and research | activities._ " | | Ok. | | " _The European Microwave Association (EuMA) is an international | non-profit association with a scientific, educational and | technical purpose. The aim of the Association is to develop in an | interdisciplinary way, education, training and research | activities, including:_ | | " _Promoting European microwaves_ | | " _Networking and uniting microwave scientists and engineers in | Europe_ | | " _Providing a single voice for European microwave scientists and | engineers in Europe_ | | " _Promoting public awareness and appreciation of microwaves_ | | " _Attaining full recognition of microwaves by the European | Union..._ " | | So, uh, how far down this rabbit-hole do I have to go to find a | meaningful term... | | " _EuCoM 2020 Events: "GPR and Electromagnetics for Sensing Soil, | Objects and Structures: Forward Modelling, Inversion Problems and | Practical Aspects" - Lecce, Italy, January 29 - February 01, 2020 | - Org.:R. Persico et al._" | | Whew. | | [Edit] | | I wrote the comments above before I read the article. Now that I | have read it, I came to an epiphany: | | *It's exactly what he is talking about!* | | EuMA doesn't _do_ microwave things. It 's an organization _about_ | microwave stuff, but what they do has nothing to do with | microwaves. The schedule things, they write contracts for venues | and catering, and they send press releases of various kinds. | | Wouldn't it have been slightly refreshing if EuMA's web site was | written by someone who actually knew something about microwaves? | Someone who could spice things up with meaningful examples? Even | a little? | | Anyway, there are some issues with the article itself. | | " _And we fight for all technology, even the stuff that is not | core because we are attached to it, we love what we do._ " | | What is core, and what is not? And after you've eliminated | everything that is clearly not core, what is clearly not core | among the remaining things you have left? If you've outsourced | the springs, knobs, cords, and cases then those start looking an | awful lot like something else you should get from outside. | Especially since your manufacturing facility is now just running | one shift a day. Or a week. | | At the end of the article, he mentions, "JPL at Caltech in the | US", which is an interesting (and appropriate) phrase. If you | follow the Mars rovers or any of NASA's other unmanned | exploration missions, you'll see JPL mentioned a lot. NASA is | very proud of JPL. Which is a little strange since JPL and NASA | are only loosely related. "JPL is a research and development lab | federally funded by NASA and managed by Caltech", as their web | site says. The launch vehicle, by the way, was a commercial | United Launch Alliance Delta II. (Not that I'm bitter in any | way.) | ChrisMarshallNY wrote: | This is an excellent read. Because it was written as a | presentation, it's quite readable. | | I like the toaster example. It reminds me of this: | http://www.solipsys.co.uk/new/TheParableOfTheToaster.html | | He mentions the Dreamliner. That project is kind of a poster | child for how not to do stuff, but I suspect that many of the | problems came about as a result of cultural hysteresis. The | engineers and managers were good, but inexperienced in | development of such a loosely-coupled project. | | I agree with the premise of the talk. In the US, we are facing | the same issue with manufacturing. It's actually impossible to do | some types of manufacturing in the US. We've crossed the Rubicon. | Alea jacta est. | Scene_Cast2 wrote: | I agree with the observation of how things are (high on | outsourcing, low on tech & talent). I do disagree with how things | got there. | | In a competitive market, when you outsource, you get immediate | costs savings. If your competitor outsourced more things than you | have, you'll be at a financial disadvantage for some amount of | time before the "innovation debt" catches up. That can be decades | - the quality of the outsourced parts can remain equivalent or | superior for quite a while (or even perpetually, in case of | fuses). | | A similar thing happens with companies that do actually want to | innovate. All of them are spending all available resources | competing with each other, that the R&D for big tech projects | simply cannot happen without external intervention or external | funding. Historically, none of the well-staffed and well-funded | research labs have been funded by companies whose products are a | commodity. | kingsuper20 wrote: | >In a competitive market, when you outsource, you get immediate | costs savings. | | That's a good point. In addition, there's the (mostly) | inevitable tendency for economies of scale to push for | outsourcing. Several companies I've worked for shut down their | board shops while I was there, there's just no way to | practically keep up with that. Fabs got bigger. Specialty sheet | metal shops can pound out the work faster than you can. | | One related thing I've noticed is that older companies (dunno | about places that make exclusively software) are never well | equipped to deal with perpetually cheaper products with smaller | margins. | | As a side note, I suspect that the real magic in making | toasters, if all done in-house and using simple inputs, is to | design the manufacturing facility. The toaster itself is | relatively simple. The Rouge must really have been something. | choxi wrote: | This explains the stagnation in the airline industry pretty well. | They don't make the planes so there isn't a lot they can change | about the in-flight experience, and they don't run the airports | so there isn't much they can do about the onboarding experience. | | There's a Planet Money episode where they talk about an airline | that made more money selling oil futures than flying planes.[1] | Maybe any sufficiently outsourced company becomes | indistinguishable from a finance company. | | 1. https://www.npr.org/transcripts/140954343 | novok wrote: | The stagnation of experience is totally a choice made by | humans. We could let it be like boarding a shinkansen in japan, | where your mom can hug you at the fare gate, you can bring | bottled water and you don't have to take off your shoes or | anything out of your bags, but we chose not to. We could do CGP | grey style boarding, but we do not: | https://www.youtube.com/watch?v=3e5Jn2gG8Eg | jbverschoor wrote: | Tech is a cost center and not considered core business, even for | telecommunications companies. But especially in the Netherlands. | | This is why it's being outsourced. This is why they won't pay | engineers what they deserve. All ready to be swept away but any | real tech or mega Corp. | Fordec wrote: | At the core of it, the very core of it, tech is waged work. Just | like in manufacturing, which was outsourced quite prolifically. | Tech isn't special in this regard. | | The thing that hasn't come about yet though is, sales, marketing, | accounting can also be outsourced. Dare I say automated. It is at | the end of the day, still waged work. Marketing is not an asset | class. Accounting isn't capital ownership. Fabrication is a tool, | tech is a tool, social media is a tool. | | The moment that this sort of stuff gets automated there will be a | reckoning on how businesses are built in western society. I don't | mean a saleforce competitor with a slicker UI, I mean completely | abstracting away payroll and the like. | | Imagine for a moment: | | You could say to anyone, "I like the work you do want to work for | me?" either in person, online, even here. They say yes. Now | suddenly a pipeline process kicks off, like a CICD for | recruitment. You have your budget metrics all in place, the | receiver has their negotiation asks, etc. And AI hashes out a | negotiation, in browser or on your phones etc. comes up with a | negotiation contract, highlights the important bits or deal | breakers that need a higher level sign off. "Click 'Yes' to | work." Done. Hired. Here's your onboarding package and account | credentials, your paycheck comes in at the end of the month. | | All the while, the two people at the table or on twitter have | just been continuing on with their lives. Nobody talked to HR. | Nobody had to manually do filings with the IRS. The business | owner never opened a dashboard or logged in to their | negotiation.ai account. It is not this easy at the moment. But no | rule of physics says it can't be in the future. | | Entire classes of work could crumble while people could create in | a much more competitive manner. | novok wrote: | So you mean, how work was done before the modern nation state, | income tax, passports, visas and mass literacy? All of the work | you describe was created by human bureaucracies for human | bureaucracies. Beforehand you didn't need the paperwork. | jasode wrote: | _> If you separate the thinking about things from the doing of | things, then innovation will suffer._ | | I found the author's framework incomplete and not useful. For | example, he didn't include any counterexamples. E.g. why is Intel | with _both in-house chip architecture design capability _and_ | chip fabrication factories_ falling behind in innovation to | competitors using the outsource model? | | - NVIDIA gpu + outsourcer TSMC is ahead of Intel at hardware for | machine learning | | - Apple M1 chip + outsourcer TSMC beats x86 for laptop | performance | | - AMD Neoverse chip + outsourcer TSMC bests Intel for many server | workloads | | But that doesn't mean those companies outsource everything. E.g. | Apple doesn't outsource the programming of iOS and macOS to | outside consultants at Accenture or Thoughtworks. They do that in | house. But Apple programmers don't write their own financial back | office software. Instead, they use Germany's SAP ERP enterprise | system. Likewise, none of SAP employees design and make | smartphones for staff to use; they let Apple and Samsung | manufacture the phones. | | Being strategic about outsourcing is a natural consequence of | recognizing that _other entities specializing in a competency_ | can do it better /faster/cheaper. How did NASA "innovate" and | send astronauts to the moon? They _outsourced_ the work. E.g. The | manufacture of space suits was contracted out to ladies bra | manufacturer Playtex. The Apollo rockets were made by a | combination of companies. NASA was the ultimate outsourcer. | carlmr wrote: | He did get into that, that sometimes it's smart to outsource, | the example was the fuse on the toaster. But you need to build | something, you need to have some core competence where you can | innovate because you build. | jasode wrote: | _> He did get into that, that sometimes it's smart to | outsource, the example was the fuse on the toaster._ | | The counterexamples I was looking for were _companies_ that | didn 't fit his thesis instead of a small part like a fuse | being outsourced. | | The author Bert Hubert keeps emphasizing "making" in addition | to the thinking. So a design(thinking) company like NVIDIA | doesn't seem to follow his ideal of how an "innovative" | company is structured. And another counterexample like Apple | in the 1970s used to in-house _assemble computers and box | them for shipping_. That was all outsourced decades ago to | China and yet Apple got _more innovative_ with the 2007 | iPhone. | redis_mlc wrote: | You're being an argumentative pedant. | | - Intel became incompetent at fabs, though they wish | otherwise | | - most chip companies, possibly Nvidia, simply can't afford | their own fabs, esp. "the next generation" that is always | coming | | - Apple uses SAP because they're not in the MRP software | business | | - Apple stopped assembling box computers because it was | commoditized, and real estate/labor in Calif. became too | expensive. | | I suggest you re-read your posts and step up your logical | thinking. | | And using the word "ideal" is just moving the goalpost. | | What your ideology leads to is somebody else making your | product, until they switch out your logo with their own. | This is happening today in China with cars and other | products. Oops - your Econ 101 textbook didn't cover that, | did it? | detaro wrote: | The post doesn't say "all outsourcing is bad", and your 3 | examples are all companies that (as far as I can tell) are very | deliberate about what they outsource and deliberate about | keeping control of the things they want to keep doing: NVIDIA | is not going to go out to someone else and say "we want a GPU | chip", but rather they are designing them end-to-end to make | full use of what their production partners can do. | | iPhones are built in China, but Apple keeps tight control over | how they are built. They control and manage the supply chain, | they buy companies making tools used to make iPhones to keep | control over this. They operate the cloud service stack around | them. They made massive investments into doing _more_ | themselves: building a world-class CPU design group to get | independence from what other SoC makers offer them. They are | now leveraging that to outsource _less_ of the Macbook design: | move away from outsourcing CPU design and production to Intel, | to design inhouse. | | They understand very well what the post warns about: If they | stop being involved with these parts of the process, they will | a)likely fall back and b) have a terrible time trying to | recover the ability if they need to, so they only outsource | selected parts of their work. The breaking points are further | down the curve, and they stay the hell away from them. | | One could argue that Apple's attempts at making Macs in the US | again are an example of how difficult it is to reclaim such | ability, even if the company still has the know-how to oversee | it. Especially since nearly everybody else in California also | has stopped doing this kind of thing - Apple would need to | train people a lot. Which Apple at least can afford, if they | want to. | jasode wrote: | _> The post doesn't say "all outsourcing is bad",_ | | I didn't interpret his essay that way. His acknowledgements | of some outsourcing can be valid doesn't address my | criticism. | | _> and your 3 examples are all companies that (as far as I | can tell) are very deliberate about what they outsource and | deliberate about keeping control of the things they want to | keep doing: NVIDIA is not going to go out to someone else and | say "we want a GPU chip", but rather they are designing them | end-to-end to make full use of what their production partners | can do._ | | And this is a great example that ties back to the author's | point because he criticized Boeing. Boeing _designs_ the | planes and tells the outsourced partners what to make. Boeing | then does final assembly in Boeing-owned factories in | Washington and North Carolina. | | So to use your wording, Boeing _does not_ go to somebody else | and say _" we want a 787 plane"_. Boeing does _more building_ | than NVIDIA. | | I think a fair reading of his essay is that he thinks that a | company that is more _vertically integrated_ via less (but | not zero) outsourcing leads to more innovation. He was | lamenting that outsourcing productivity software like MS | Office 365 wasn 't a good trend so presumably, companies that | insourced that inhouse would be "more innovative". | detaro wrote: | From the article re Boing: | | > _They were even telling the manufacturers look, we only | put up requirements, we don't actually tell you what to do_ | | From other sources: | | > _Starting with the 787 Dreamliner, launched in 2004, it | sought to increase profits by instead providing high-level | specifications and then asking suppliers to design more | parts themselves._ [...] | | > _Rabin, the former software engineer, recalled one | manager saying at an all-hands meeting that Boeing didn't | need senior engineers because its products were mature. "I | was shocked that in a room full of a couple hundred mostly | senior engineers we were being told that we weren't | needed,"_ | | https://www.bloomberg.com/news/articles/2019-06-28/boeing-s | -... | | That's the point where you loose your in-house grip on | things, and run into trouble if your contractors are not up | to it. Keep that up, and you loose the ability to fix it. | | The chip-designing companies are betting that there always | will be an external fab that's world-class, and likely | better than what they can do themselves. AMD literally | couldn't afford to keep up. (and when world-class was | inside Intel, they somewhat suffered for it) | tremon wrote: | Actual title: _How Tech Loses Out [..]_ | | What a difference those three letters make. But do read the | article, it's a worthwhile read. | mulmen wrote: | Loses out over what? Even with "how" it's nonsensical. | TiredGuy wrote: | I was initially confused about this too. The title of the | corresponding video of the article replaces "over at" with | "in", which is much clearer. In other words, it's not "over" | anything it's "over (there) at" the specified places. | chrisseaton wrote: | > How Tech Loses Out over at Companies, Countries and | Continents | | > How technology loses out in companies, countries & | continents | | > How Tech Loses Out | | None of these titles are understandable to me. How can it | be so hard to give something a simple, intelligible, and | coherent title? Or maybe I'm the idiot. | Nasrudith wrote: | The missing implicit bits and technical conflations are | probably what are throwing you. "Technology" really means | technical understanding and resulting quality as opposed | to use. Even the crappy ones still use tech that they | outsource but poorly. Losing out means in the context of | matters of popularity. It is losing out in the same way | Semmelweiss did in his lifetime over "doctors should wash | their hands". ___________________________________________________________________ (page generated 2021-05-02 23:00 UTC)