[HN Gopher] How Tech Loses Out
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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".
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