Rubén Rivero Capriles

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    Outsourcing Concepts in the Third World

    "I'm fascinated by your points about Venezuela -- and how the three questions apply there.

    I think, though, that in much of the world, the downturn represents not the end of abundance, but merely a slight reduced form of it. Especially in countries like the US, the material standard of living remains remarkably high. Add in consumers feeling pinched for cash and credit -- and that merely increases the urgency for coming up with a big conceptual leap in innovation rather than merely incremental ones.

    Great question, too, about Cuba.  I think that could be one of the most exciting places in the world once the Castro brothers are gone -- and the full capabilities of the country are liberated."
    Daniel Pink, author of A Whole New Mind, on the text below:

    This mini essay concludes my observations on Daniel Pink's A Whole New Mind, which were expressed in my previous blog entry "Third World on the Conceptual Age".

    Right-brain jobs, in addition to left-brain jobs, can also be outsourced from the first world to the third world, especially to Latin America and perhaps Africa, because of a lower labor cost and perhaps better quality in selected cases. This is due to the fact that, unlike in the first world, our right-brain qualities have not become attrophiated by an excess of left-brain labor for centuries. I would imagine that there is much such right-brain outsourcing already occurring with Mexico. Therefore outsourcing from the first world to the third would continue for ANY kind of job, not just menial left-brain jobs; however, specific niches can be kept safely in the first world at first world wages requiring specific combinations of both sides of brain activity.

    One clear example are doctors. Lots of California patients go to Mexico for visits to doctors who have great right-brain training from the University and have completed specialized left-brain specializations in the US, at a fraction of the US cost. Vemezuelan doctors who seek a better living in the US also have that profle.
    Workers in India are highly motivated to excel in outsourced left-brain jobs. I do not know much on Indian culture, but my guess is that they concluded that millenia of emphasis in the right brain failed to provide the abundance they yearn, so Indians are slowly finding the way to overcome that lack.

    Daniel Pink's A Whole New Mind establishes a left-brain kind of routine questionnaire for any new business endeavor, I will attempt to reply to it based on my specific Venezuelan environment:

    Question 1) The question on "Can it be produced abroad more cheaply?" is yes for pretty much every single Venezuelan industry but oil. We suffer an exchange control regime that forces exporters to convert their dollars at the official rate of 2.15 bolivars, while the market exchange rate approximately triples this value. That is, Venezuelan products are competitive worldwide only if they can be produced locally at below 30% of the production cost for that item in any single other country. We are even becoming coffee importers! We are importing most foodstuffs for that reason. Local manufacturing industries are migrating to Colombia, Panama, Costa Rica and Brazil. On these grounds, we are quite hopeless until there is an exogenous change of government regulation systems.

    Question 2) In the Venezuelan case only the question on "Can a computer do it cheaper?" can be replied similarly as when asked to a US citizen.

    Question 3) The question on "Will my product satisfy the needs on an age of abundance?" must be reversed in my country. GDP per capita has substantially decreased during my lifetime. In the 60s and 70s any college graduate landed a job and could buy a comfortable home on credit. Today, lots of middle-aged people continue living with their parents. Grocery shopping consumes about half of most people's income, due to one of the greatest inflation rates of the world. I remember when I was a kid it was an age of abundance, but now this is no doubt an age of scarcity. I do not know what, in my local situation, would be an appropriate rephrasing of that question number 3.

    In short, Venezuelans need to apply a lot of right-brain creativity in order to come up with a similar "recipe questionnaire for success" specific for our situation. Maybe we won't come up with such a recipe yet.

    The fresh emphasis on right-brain qualities is appropriate to the US situation. I am just not sure on how that Conceptual Age can take a general hold in the developed world, on the current globalization/illegal immigration climate, with so many other countries still living under scarcity. I do not think, seriously, that the abundance assumption is valid. The world is still quite far from being a place of abundance. It will be interesting to see what Cubans within Cuba, if they had the right to speak freely, would add to this respect.

    A topic for further research would be to find out if there are any left-brain activities that may be needed worldwide in order to achieve the abundance prerequisite for the Conceptual Age overturn of the Information Age.

    Rubén Rivero Capriles, Rivero & Cooper, Inc.

    Caracas, September 15, 2009