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Giuseppe De Francesco

Owner - Games Designer and Coder, DFT Games

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Global economy: how to cope with that?

Here a few facts:

* - There is a huge online market over the Internet with a lot of different escrow websites facilitating clients to meet and hire contractors.

* - Over the last 24 months we have seen an unexpected increasing of excellent professionals from Asia (especially India, Pakistan and Nepal) offering their services online.

* - On those escrow websites the jobs are awarded to the bid providing the best value for money (lowest bid with highest professionalism).

* - Playing the game of lowering the bids, Asian professionals have practically set the price for professional services at a very good level for their countries, but impossible for US and EU people (like 1 month of work for 500USD).

I totally understand the client point of view: why to pay 2,000USD for a service that I can get at the very same level of professionalism for 500USD?

Borderless, free money circulation allows the above phenomenon to rapidly grow, but... what about people that cannot live on 500USD a month?

This is extremely sensitive issue among people working online (like myself) but the extension of this on the actual goods production is also happening here in EU: many companies move the production sites to Asia, winding down EU factories.

What's your take? How do we solve this situation? Is it even possible to think to a solution? Should we go back to put strong money borders with heavy customs fees for sending and receiving money?

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    Oct 21 2013: You have to find a comparative advantage.

    http://www.ted.com/talks/matt_ridley_when_ideas_have_sex.html
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      Oct 22 2013: Can't see any, but I'm open to any idea... that's why we're here... right? :)
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        Oct 22 2013: The hard reality is that you have to find one or find something else to do for a living.

        If I were you I would make sure that I understood what business I was in and what the emotional reasons people have for using your services
        .DO NOT ASSUME YOU ALREADY KNOW, you do not to the extent you need to. This is one of those FIND OUT moments in life. If you don't find out you did not do what you need to. However it may just be that this problem is unfixable


        FWIW the Chinese have kept their currency undervalued for a long time. This forced up their savings and lowered their consumption. This has to end as there has been so much over investment that their economy is in for a rocky road for quite a while along with either an increase in unemploment or the value of their currency.
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          Oct 22 2013: Dear Pat,
          I've been a software developer for 32 years and I've seen a lot. There is no emotional reason to pick a developer that costs 5 times another one, no matter how good he is. BTW, writing software is not rocket science, so the quality of my code can't be that better than any other Indian colleague... this is just a problem of economics... no motivational crap can change a global economy downfall.

          Dell moved out from Limerick sending home 600 workers simply because moving the plant to Poland was a better deal. Now they plan to move to Asia. Same goes for so many companies... even historical Irish brands now produce where they pay a few bucks to get excellent workforce .

          In Italy the automotive sector is down to 1978 figures and there is no hope to see it back in shape: over 25k workplaces were lost in 3 years just in that sector, not counting the related sectors' losses.

          Capitalism can't cope with global economy, so we need a serious change... not motivational speeches. The problem as I see it needs a radical intervention to be solved, but I don't see people moving in the right direction... I see people struggling and becoming isolationist instead of joining forces to change the world... pity.
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          Oct 22 2013: Exactly Pat, I totally agree!

          It is very important, that this 'hard reality' aka 'capitalism' appears to be a natural constant, a never changing entity of the universe, something which is beyond any change!

          This 'appearance' becomes particularly important in countries in which each citizen has the right to vote and in which each citizen has exactly the same voting power. Democracies for instance, to name one example.

          This is very important at times, at which the mechanics of capitalism manage to hurt more and more citizen unless the majority of them is finally cornered.

          As we all know, cornered people do funny and illogical things - very difficult to predict - we got to make sure, that none of them gets the idea to use their voting power to change this 'hard reality' in their favor. Especially then, if this favor would serve the majority of the people!

          This got to be avoided, at all cost! So how do we do that, that none of those cornered people start to question or even to blame the economical system which corned them?

          Well Pat, I think you are on the right track already. People like Giuseppe, who feels cornered in his situation and started to question 'the system' have to insured, that it is their and not 'the systems' fault!

          You rightly reminded him, who works in his business for many years, that he actually has no clue about what he was and is doing all this time! Well done! This way you put him into a defense situation! Beautiful! Now he has to explain why he didn't manage to adjust to this 'unchangeable' hard reality, which keeps his mind busy and general system critique low.

          Doesn't we all know that keeping a 'competitive edge' against low labour cost markets is a piece of cake? Just do better graphics no one else does for 1/5th of your price! Just make the people want your stuff and your problems are gone, it is that easy! Capitalism got nothing to do with the problem at all! Its just Giuseppe who is complaining for no reason, right?
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          Oct 22 2013: He was just doing 32 years a lousy job in keeping his customers interested, right? He was just exploiting his market all this years by charging high prices for no reasons, right? And it is HIS fault that he can not keep up with foreign programmers to whom $500 a month is a fortune, right? He could adjust to this level as well, correct? Or even lower the prices, to get the other side mixed up a bit in open and fair and good old competition, as this is what healthy markets are about, right? They correct themselves, right?

          A 'smell good' Mexican plumber for $5 per hour? No biggy, just smell even better for the difference of 20 bucks. Or start singing to entertain the people to make up for the difference. What about dancing? This will secure a plumbers job for at least 5 years, if not more ...

          Let us make the majority of people who are cornered by capitalism chase their tails instead, before they choose to free themselves in voting their way out of their despair, because voting is dangerous, especially for large numbers of voters!

          Let us repeat our slogan, that it is THEIR fault why they find themselves cornered. It is THEM, who didn't work hard enough! it is THEM who didn't do good enough at school! It is THEM who choose the wrong profession! It is THEM who are not creative enough! It is THEM who didn't understand their business!

          And as more often we repeat that, Pat, as more likely it becomes they will believe what we keep saying and finally end up chasing their own tails in the corner we put them!

          Once this is done, we again saved this 'hard reality' against the danger of the majority vote,
          which really is just a pain in the but in our 'political reality', right? Maybe we can get this changed as well one time, what do you think?

          So lets cheer our capitalism, as for certain, this truly is a natural and unchangeable constant in all THEIR lives. And in the meanwhile, we may check how our investments in China, India and elsewhere are doing and if we did well .. :o)
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        Oct 22 2013: You miss my point. People have an emotional reason for buying anything. I come from the commercial construction industry which you might say is as cutthroat as it gets. But this still applies.

        You asked for ideas yet you whine when you did not hear what you wanted to. Good luck, with that attitude you are going to need it.
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          Oct 22 2013: So you are stating that there are emotional states that can make a client pay $5,000 for something that they can get for $900 at the same level of quality? Can you make any real life example? I can't pinpoint anything that fits this picture, and it's not about attitude... maybe I'm too stupid...
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        Oct 22 2013: I'm not saying your situation is fixable.

        It might be that there are software customers who do not view programming as you do (a commodity) and get quite emotional when the vendor they used is late or delivers a beta version, making them look bad to their boss.

        Another one is a local plumber who advertises as the smell good plumber because people get emotional about plumbers who smell bad.

        People pay considerably for an apple because it is friendlier and not a problem.

        People pay more for a Cadillac. What business is Cadillac in? They are in the vanity business, this is emotional reasoning.

        Like I said this is one of those times in life that you need to FIND OUT, cuz if you don't find out you are going to be looking for a new career
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      Oct 22 2013: Oh, yes Pat, 'looking for a new career' thats a classic! I almost forgot! Well done, Giuseppe is almost there!

      What do we need our expertise for, right? Who likes what ones does anyway, correct? If Giuseppe manages to create computer programs and games, why shouldn't he be able to flip burgers at Burgerking, right? Or what else one can do after a 32 year career of specialization, correct?

      Market regulations are no option anyway. We don't want governments to tinker with that one, do we?

      What did Giuseppe say? Governments are representatives of the people in democracies? Naah ... he must have understand something wrong to have said that, right? We don't want a nanny state, do we?

      We all know that markets have to be free and that it is not their intention to serve the people, right? People have to serve the markets, as otherwise, who on earth is doing all this plain boring work for the revenue of the ruling class?

      No Giuseppe, you got to be kidding! It is your fault that you can not compete anymore, so get yourself another job! Don't blame anyone else! It is you who is the looser here, not the capitalist system! The system is fine! It got us off the trees and cages and keeps increasing our wealth ever since! You as anybody else had the same chance to participate, so don't cry if you can't keep up! Right, Pat?

      You got to accept Giuseppe, that it is YOU and nothing else who brought you in that very corner you are in right now, so stop complaining and look for another job! Right, Pat?

      And don't you dare to question the system, Giuseppe! It got nothing to do whit it! Its a natural constant, remember? A 'hard reality' you got to face. Grow up, get yourself another job and shut up dammit!

      ;o)


      Giuseppe, I hope you understand my intention. I am not certain about Pat though ... ;o)
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        Oct 22 2013: Lejan

        You digress into a sea of conjecture which is it's own trap, the consensus which is irrelevant, mass agreement that it is all hopeless.

        I don't normally respond to your chatter, but since you went to so much trouble to covince
        Giuseppe that he can't possibly do anything for himself, I thought I better say what you blame on capitalism is really the product of government.

        Now I suppose that you will release endless amounts of conjecture, don't flatter yourself I will not waste my time responding
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          Oct 22 2013: Pat,

          I am on your side, really! And of course we have to blame the government that capitalism can not show its natural beauty! Thats what I meant in saying:

          'Market regulations are no option anyway. We don't want governments to tinker with that one, do we?'

          So what makes you think I just chatter while supporting your very standpoint?

          I didn't convince Giuseppe in any other way than yours. I even encouraged him not only to 'smell' better yet also to dance and sing on top of it to bridge this market driven gap in prices.

          And as you, and final consequence, I was suggesting that he rather get another job but to complain about the given situation.

          Complaining doesn't do anything. I agree with you and made this point even clearer in saying:

          'Grow up, get yourself another job and shut up dammit! '

          So don't you believe in your own views anymore, Pat? Or what makes you feel uncomfortable the moment someone supports them?

          I refuse you believe that you see your understanding of the world just as another conjecture.
          This would not resonate with how you appear.

          Anyway, I just tried to be supportive towards some untouchable subjects and to keep them as such just as you prefer to do, yet instead you feel to waste your time on it.

          Strange, yet now I will never know what motivates this your decision.

          Well, I guess 'a sea of conjecture' to some is just a puddle of facts to others and likewise, which may have caused this terrible misunderstanding of ours.

          :o)

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