Re: National Socio-Economic Security Need for Encryption Technology

[Arun Mehta <amehta@giasdl01.vsnl.net.in>]

At 02:05 10/08/96 -0700, Timothy C. May wrote:
>At 12:15 PM 8/10/96, Scottauge@aol.com wrote:
>>I was watched CBS reports a couple nights ago about how all these blue collar
>>and now white collar jobs are going across seas.
>
>Where do I begin? First, what does "taking jobs away from us" mean? That we
>own these jobs? And who is "us"?

Well said. While I didn't see the CBS program , I bet the
scaremongerers did not point out that programmers don't just
produce software, they are major consumers as well. The growth of
the software industry in other countries therefore means business
for US industry, which produces most of the compilers and other
utilities that programmers everywhere use. This clearly helps
programmers in the US. 

>>So a possible way to protect jobs is to protect the knowledge on how to do
>>them.

To some extent this happens automatically -- for instance, if you
live in the Silicon valley, your knowledge levels are higher on
account of higher frequency of user meets, conferences, etc. But,
to the extent you use the Internet as an information source, it
is available internationally. So you cannot have it both ways:
use an open forum like the Internet, and hope to keep knowledge bottled in.

In earlier generations of computing, monopolistic organizations
such as IBM and DEC charged huge sums for information. One of the
reasons that IBM was thrown out of India in the mid seventies was
their practice of shipping only outdated computers from the US to
India. Indian programmers were at a disadvantage, and clearly
could not charge as much as American ones. But the openness of
MS-DOS and UNIX changed all that, a trend that has only been
strengthened by the Internet. 

While jobs could easily move overseas, the developing world may
not be able to absorb them. To start with, such migration assumes
the availability of excellent telecom facilities. These are
severely lacking in most developing countries, which have about
75% of the world's population and 16% of its product, but only
12% of the total number of telephone main lines. These too are
mostly in cities. While the World Bank's 1988 figures indicate
that in industrialized countries, major cities have a 20-30%
higher telephone density than do other areas, in a country like
Ethiopia, cities have a density of about 14 times the national
average. In other words, most people in developing countries have
practically no access to telecom facilities. In addition, the
quality of the facilities, typically provided by state-owned
monopolies, is often abysmal. While low-earth orbit satellite
projects such as Iridium, Odyssey, Teledisc and Globalstar
threaten to change all this, little impact will be felt until the
end of the decade. In any case, telecom facilities in the
industrialized countries will most likely continue to be
considerably superior, providing workers there with an ongoing
competitive advantage.

Further, as economists such as Paul Krugman point out, developing
countries lack the means for sustained growth ("Which Asian
Model?", Newsweek, November 20, 1995). Those economies that have
shown dramatic growth, such as the East Asian, have relied
essentially on low-cost inputs, rather than on their efficient
utilization. Professor Alwyn Young of Boston has in fact come to
the surprising conclusion that Singapore's total factor
productivity (which measures such efficiency) is so poor as to be
comparable to that of the Soviet Union. He points out that "at
just the time that everybody was ranting about how magnificent
Japan was, it ceased to catch up."

Cheap inputs is not a long-term phenomenon, as companies looking
for good programmers in India are increasingly discovering.
Programmer salaries in India are rapidly rising. While many
youngsters are keen to become programmers, India lacks adequate
training facilities. Today, teachers receive poor pay, even by
Indian standards. Educational institutions are hardly going to be
able to raise salaries of software teachers alone, while raising
them for everybody will be impossible. Consequently, there is
going to be little  incentive for good programmers to become
teachers, and the educational institutions will continue to churn
out large numbers of poorly trained students. It is suggested
that universities in industrialized countries could use the
Internet to teach students in developing countries, but the
efficacy of this model has yet to be proven.

Also, a very small percentage of Indians are fluent in English,
and from it come the senior bureaucrats, managers for the private
sector, the military, newspapers, educational institutions -- in
short, all the important posts of the country. Unless there is to
be a severe disruption of the nation's activities, not too many
can be diverted to cater to export.

>>Perhaps there is a larger picture in the world that the cyperpunks mailing
>>list is missing.  That cryptography is not just for personal privacy, but
>>could involve job security also - as a matter of fact, the income base for
>>this whole country.

I'd argue the opposite: I see no reason why companies such as
Netscape have to put up with such draconian US laws as ITAR: why
don't they simply develop their software overseas? If they made a
highly publicised move, that might do wonders to change the
opinions of US Congresspersons voting on ITAR-related legislation.

My prediction is that with the blessings of the Internet, the
next generation of multiracial programmers, even those that were
born in the USA, will be more likely to be found on the beaches
of tropical islands than in the fog of San Francisco. When you
can work in the shade of a palm tree, even if you should earn
less, it's worth it :-)

Arun Mehta Phone +91-11-6841172, 6849103 amehta@cpsr.org
http://www.cerfnet.com/~amehta/  finger amehta@cerfnet.com for public key