Ideas, imagination, and meritocracy

Michael Alan Hamlin

Posted on November 11, 2010

On the eve of mid-term elections in the U.S. this week, Pulitzer Prize winning The New York Times columnist Thomas L. Friedman wrote that “America seems at times to be running away from the world it invented.” That’s a world that India and other emerging economies-including the Philippines-are struggling to emulate. Reporting from India, Mr. Friedman noted that this giant South Asian economy has flourished since it threw off protectionist yokes in favor of free markets.

Saurabh Srivastava, co-founder of the National Association of Software and Services Companies-otherwise known as NASSCOM -spoke with Mr. Friedman. He told the columnist that America’s leadership “was never because you had more arms. It was because of ideas, imagination, and meritocracy.” Mr. Srivastava is worried that America is running from its values because of a crisis of confidence brought about by the global financial crisis.

That prospect alarms Mr. Srivastava because, “There is nobody else to take that leadership,” and the alternative is stark. “Do we want China as the world’s moral leader?” he asked Mr. Friedman. “No. We desperately want America to succeed.” The alarm that Mr. Srivastava describes has been heightened in recent weeks by U.S. mid-term campaign rhetoric that rejects the basic elements required for an economic culture that fosters ideas, imagination, and meritocracy.

Those basic elements include the capacity and openness to attract the world’s greatest minds, freedom of enterprise to develop and implement competitive business practices, and the willingness to compete. Yet limiting immigration, forcing companies to embrace uncompetitive processes by penalizing outsourcing, and closing American markets to protect the uncompetitive firms that result, characterize political discourse among republicans and democrats alike.

Voters desperate for work and seeking to preserve jobs are not just willing to be seduced by this argument, they seem to be embracing it in alarming numbers. This phenomenon is worrisome for emerging economies that have sought to emulate America’s success on multiple levels. Mr. Srivastava is worried that America’s diminishing moral authority in economic matters will result in a tougher, relentlessly opportunistic environment.

Just as worrisome is the prospect of economic managers in emerging economies around the world citing American’s backsliding to preserve existing economic orders that have benefited a few wealthy families while keeping the majority of their people mired in poverty. As India and other Asian economies from Taiwan to Malaysia have demonstrated, protectionism, closed societies, and uncompetitive enterprises do not create vibrant economies and broad prosperity. Learning to deal with the risks and opportunities free markets create does.

While Mr. Srivastava was wringing his hands in India last week, in the Philippines delegates to the International Outsourcing Summit (IOS) were celebrating the success of the business process outsourcing (BPO) industry in this country. In a decade, that industry has gone from close to zero to an anticipated $9 billion in revenue this year and more than half a million high-paying jobs. Analysts agree that the Philippines has become the number two offshore, outsourcing destination in the world.

Of the many reasons BPO has prospered in the Philippines and in the world’s number one center for outsourced services, India, access to great minds is perhaps most compelling, not cost arbitrage as many mistakenly assume. For years, US companies have complained that U.S. immigration policies make it too difficult to recruit talent. Outsourcing is primarily a strategy for recruiting smart, motivated people wherever they live and work.

As speakers and panelists in last week’s IOS were quick to point out, today outsourcing is not about containing costs. Instead, it’s about transforming businesses, including innovating new processes that create value. Although outsourcing in its early years was mainly a strategy to offload basic tasks, as the BPO industry has evolved organizations have found ways to outsourcing increasingly sophisticated work.

Mr. Srivastava spoke to Mr. Friedman about ideas, imagination, and meritocracy. Outsourcing illustrates the impact of leadership with these attributes at its core. When we talk of meritocracy, we can point to the rapid growth of outsourcing. It has grown because the individuals around the world engaged in performing this work are doing a terrific job. And great ideas are the catalysts for transformative business processes.

And when we speak of imagination, BPOs and shared services in the Philippines and elsewhere are showing that there are no limits to what can be outsourced. That may scare U.S. voters and politicians, but they will also be better off embracing the world they created, not walking away from it. The way out of America’s present circumstances is forward, not backward.

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand . Write him at mahamlin@teamasia.com and follow him on Twitter, Facebook and LinkedIn.). Copyright © 2010 Michael Alan Hamlin. All Rights Reserved.)

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