Service of Nations

The two buzz words that is attracting a lot of attention these days is SOA or Service Oriented Architecture and Shared Services.  Will talk about Shared Services later, however SOA intrigues me.  Not necessarily because of what it does but because of the aura around it and the hype that it creates.  Put simply, it means, that a certain ‘service provider’ will be able to provide the service to anyone who request it.  I don’t think it is a new big idea.  I think it has been around for some time.  Nearly decade ago, I remember working on OCX, and then component programming (COM/DCOM) etc etc.  I don’t think the new SOA concept was very different from this.  At a very basic level, the very fact you can have an Ms-Excel within Ms-Word or Ms-Powerpoint is a very deconstructed version on SOA according to me.  (Purist look away!!!)

I am sure that the purist would want to look at much stronger opinions at how SOA adds up.  I have seen very little of it in action.  The only souped up working implementation that I have seen, was while working for a bank in Sydney.  However, this blog is not about SOA.  This is about SOA and Nations

Kotler has a book called ‘Marketing of Nations’, Adam Smith has ‘Wealth of Nations’, as we globalise further, are we seeing ‘Services of Nations’ coming into play.  Last decade we saw the rise of China as a manufacturing hub.  This decade saw the rise of India as an IT and ITeS (read BPO, Call Centres) hub.  As the two nations race to become even more competitive, verticalisation of these skills will help them draw further productivity gains from scales and scope of ‘service’.  It is difficult to hide from stories of massive Chinese sweat shops that churn out a billion buttons, a billion shirts or a billion socks.  While working conditions cannot be ignored, the effect of these industries on the Chinese economy cannot be ignored either.  Similarly, it is also difficult to hide from stories about IT and ITeS work being delivered out of India.  The effect of the IT industry on the India economy and its social fabric cannot be understated.  However, this blog is also not about this either.

My mind wanders to the fact that, does this mean that China and India will start being the default ‘service providers’ for manufacturing and IT.  Similar to the technology ecosystem, these nations would be able to provide standardised output to a standardised input.  As verticalisation of these countries within these industries increase, their ability to deliver more and more with less and less will increase.  In China, industries have moved further inland, and need larger batch sizes to enable lower rates. Similarly, in India, IT companies have started to move inland to negate increasing cost of IT delivery.  What does this mean to the nations which act as consumer of the service.  Nay sayers are used to talking about the western world ending up becoming a country of ‘burger flippers’ or ‘hair dressers’.  I don’t agree to this view.  While there are many ways to argue this point, lets take what happened to the ‘consumer’ in the software ecosystem.  Those of you who have used Word 95, PowerPoint 95 or Wordstar i.e. software which pre-dates the SOA era know the pain of using them.  These pieces of software were not very feature rich – Try inserting an editable picture in Wordstar L.  However, as these pieces started to talk to each other, subsequent releases were able to enrich the user experience.  In other words, I believe that the consumer countries will evolve further to become stronger economies as they leave behind commoditised work for service oriented countries like China, India etc i.e. I see  great times ahead for them.  I will write more about these benefits in subsequent blogs.

Meanwhile, Food for thought, does it mean we would soon have Poland become the service country for bricklayers?

(This blog was part of my ‘Caught in the crossfire‘ blogs in 2006)

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