Information Development: Service or Manufacture?

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Bill Hackos, Comtech Services

Talking to information developers today, I find an almost universal trend. Almost all managers say management is cutting back on their departments. They are being asked to do more with less. Sound familiar? The surprising thing is that we are doing more with less, and of very good quality! How is that possible? I’ve asked around. Writers are not working more hours than before. Offshoring has not been able to realize the cost savings that management expected. Yet somehow we are able to produce more good quality information than we were before. We would have expected that with the pressure of offshoring and all those unemployed writers, salaries would be depressed. But, except for entry level writers, that has not happened. High-quality, experienced writers are making more money than ever.

How can we explain these surprising trends?

In 2005, Charles Dowdell of The Raymond Corporation and I wrote an article for the Best Practices Newsletter titled “Baumol’s Disease: Is There a Cure?”1 Charlie had just discovered the work of the economist William J. Baumol. Baumol’s paper that we referred to was written in 1967, before computers were in general use and 10 years before the PC was invented. I’ll give a brief description of Baumol’s disease here, but for more complete information, see our October 2005 article or, better yet, look at the 1967 article by Baumol2.

Baumol notes that, in any modern economy, there are two kinds of activities, manufacturing and service. Since WWII, manufacturing has become much more efficient because of automation in Baumol’s day and because of computers in more recent times. As a result, the number of people involved in manufacturing has declined. Many people have been forced out of manufacturing by this process and have had to take service jobs. Because of the efficiency of manufacturing due to the use of computers and other automation, the people who remain in manufacturing realize much higher wages. The wage disparity between manufacturing and service causes the people in the service sector to try to obtain manufacturing jobs. This pressure for higher wages increases the wages in the service sector but with no corresponding increase in efficiency. Thus, the cost of services increases to the point where we can hardly afford them. We can see the effect of this today with the skyrocketing costs of health care and education, which are still service sectors. We can buy a watch or a cell phone today for less than we pay a teenager to cut our lawn! This increase in the costs of services compared to the costs of manufactured goods is sometimes called “Baumol’s disease.”

What are the treatments for Baumol’s Disease? The first and most obvious treatment is to find sources of inexpensive labor that are isolated from the general economy so the labor cannot demand higher wages. In ancient times, the wealthy societies of Greece and Rome and others used slavery to get inexpensive labor. Medieval times brought serfdom. Early Americans used African slaves. Now America uses illegal immigrants as a choice for the cheapest labor. We encourage them to come to the United States but keep them illegal so they can be kept out of mainstream society. More recently, as communications have advanced, we can use inexpensive labor from China, India, and other Third World countries. We control immigration to keep them isolated by means of geography.

There is a second way to cure Baumol’s disease. Transform a service industry into a manufacturing industry by automating its processes. An example of this transformation is the Guttenberg printing press. The expensive, tedious service of copying books was transformed into the manufacture of copies using technology. Publishing moved from a copying service to the automated manufacture of books. Another example is the development of agriculture in the United States. Prior to 1900, most farms in the United States were family owned. Farmers would plant by hand and plow with horse- or oxen-drawn plows. Weeding, harvesting, and processing were done by hand. Farming was so labor intensive that an individual farmer could only produce enough food for himself and a little more. So almost everyone was a farmer. Food was much more expensive, as a percentage of income, than it is now. Farming was clearly a service.

American cotton farmers in the South imported cheap labor in the form of African slaves to harvest cotton and comb the fibers to remove the cotton seeds. The invention of the cotton gin automated the combing of cotton. For this task, the cotton gin was cheaper than slave labor. Farmers used cheap labor to perform what would have been an expensive process if done by the local population. Later, they found an even cheaper method to process their cotton using automation.

Today, automation has transformed agriculture. Farmers no longer tend their crops by hand, but instead oversee a sophisticated manufacturing process. Agricultural workers are no longer farmers, but instead they are biologists, chemists, mechanics, engineers, and so on. They make very good salaries maintaining the tools of automation. An agricultural worker can now produce enough food for himself and many others. Now, only a small fraction of Americans work in agriculture.

Of course, some tasks in agriculture are still not automated. No one has yet invented a strawberry picker, but you can be sure that somebody’s working on it. In the meantime, agriculture still uses cheap labor, now using illegal immigrants. As automation progresses in the agriculture industry, there will be less need for cheap labor. The disease has almost been cured.

What is happening to information development?

Information development is undergoing the same transformation we have seen in agriculture in the last century. Technical writing developed as a service associated with high-tech development. We prospered in the 1980s and 1990s, but as automation began transforming high-tech development, making high tech products cheaper and cheaper, information development became comparatively very expensive. Around the turn of the 21st century, high-tech manufacturing organizations began to look for ways to cut information-development costs. Just as the early American farmers looked for cheap labor, high-tech organizations searched for cheap labor and found it in places like India and China, as well as other Third World countries. To cure Baumol’s disease, this cheap labor source is tucked away in isolated Third World countries and can’t demand increased salaries as easily as might occur if the labor force merged with our local workers.

Change is continuing. Automation is coming to information development. Of course we have had word processors for a long time and typewriters before that. Now we’re just beginning to add content management, reuse, translation memory, machine translation, structured writing, controlled language, and other innovations to our tool set. Automation will make information development less expensive than the cheap labor we’re now getting from the Third World. Just as with agriculture, information development is rapidly becoming a manufacturing process. Our technical writing jobs are being transformed into computer scientist, engineer, information architect, linguist, and so on.

Just as in agriculture, the number of people involved in information development (including those in India and China) is declining and will continue to decline. People will lose their jobs and be upset. But most of those people will be able to take advantage of new opportunities that technology will bring. Those of us who remain in information development can look forward to more technical and high-level jobs to oversee the manufacturing process as well as to higher salaries that improved efficiency will bring. Most of us have grandparents or great grandparents who were farmers. Many lost their farming occupations and even their farms during the last century. But who among us would want to go back to the old days. We will look back in the future and wonder why we ever wanted to be old-fashioned technical writers.

1 “Baumol’s Disease: Is There a Cure?”, Bill Hackos & Charlie Dowdell, Best Practices Newsletter, October 2005.

2 “Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis”, William Baumol, American Economic Review (57), June 1, 1967.

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