第 6 页

to Dalian, and then type them into a digital database in Japanese characters. Ohmae's

company has developed a software program that takes the data to be entered and breaks

it down into packets. These packets can then be sent around China or Japan for typing,

depending on the specialty required, and then reassembled at the company's database

in its Tokyo headquarters. "We have the ability to allocate the job to the person

who knows the area best." Ohmae's company even has contracts with more than seventy

thousand housewives, some of them specialists in medical or legal terminologies, to

do data-entry work at home. The firm has recently expanded into computer-aided designs

for a Japanese housing company. "When you negotiate with the customer in Japan for

building a house," he explained, "you would sketch out a floor plan-most of these

companies don't use computers." So the hand-drawn plans are sent electronically to

China, where they are converted into digital designs, which then are e-mailed back

to the Japanese building firm, which turns them into manufacturing blueprints. "We

took the best-performing Chinese data operators," said Ohmae, "and now they are

processing seventy houses a day." Chinese doing computer drawings for Japanese homes,

nearly seventy years after a rapacious Japanese army occupied China, razing many homes

in the process. Maybe there is hope for this flat world . . .

I needed to see Dalian, this Bangalore of China, firsthand, so I kept moving around

the East. Dalian is impressive not just for a Chinese city.

With its wide boulevards, beautiful green spaces, and nexus of universities,

technical colleges, and massive software park, Dalian would stand out in Silicon

Valley. I had been here in 1998, but there had been so much new building since then

that I did not recognize the place. Dalian, which is located about an hour's flight

northeast of Beijing, sym34

bolizes how rapidly China's most modern cities-and there are still plentyof miserable,

backward ones-are grabbing business as knowledge centers, not just as manufacturing

hubs. The signs on the buildings tell the whole story: GE, Microsoft, Dell, SAP, HP,

Sony, and Accenture- to name but a few-all are having backroom work done here to

support their Asian operations, as well as new software research and development.

Because of its proximity to Japan and Korea, each only about an hour away by air,

its large number of Japanese speakers, its abundance of Internet bandwidth, and many

parks and a world-class golf course (all of which appeal to knowledge workers), Dalian

has become an attractive locus for Japanese outsourcing. Japanese firms can hire three

Chinese software engineers for the price of one in Japan and still have change to

pay a roomful of call center operators ($90 a month starting salary). No wonder some

twenty-eight hundred Japanese companies have set up operations here or teamed up with

Chinese partners.

"I've taken a lot of American people to Dalian, and they are amazed at how fast the

China economy is growing in this high-tech area," said Win Liu, director of U.S./EU

projects for DHC, one ofDalian's biggest homegrown software firms, which has expanded

from thirty to twelve hundred employees in six years. "Americans don't realize the

challenge to the extent that they should."

Dalian's dynamic mayor, Xia Deren, forty-nine, is a former college president. (For

a Communist authoritarian system, China does a pretty good job of promoting people

on merit. The Mandarin meritocratic culture here still runs very deep.) Over a

traditional ten-course Chinese dinner at a local hotel, the mayor told me how far

Dalian has come and just where he intends to take it. "We have twenty-two universities

and colleges with over two hundred thousand students in Dalian," he explained. More

than half those students graduate with engineering or science degrees, and even those

who don't, those who study history or literature, are still being directed to spend

a year studying Japanese or English, plus computer science, so that they will be

employable. The mayor estimated that more than half the residents of Dalian had access

to the Internet at the office, home, or school.

35

"The Japanese enterprises originally started some data processing industries here,"

the mayor added, "and with this as a base they have now moved to R & D and software

development... In the past one or two years, the software companies of the U.S. are

also making some attempts to move outsourcing of software from the U.S. to our city . . .

We are approaching and we are catching up with the Indians. Exports of software

products [from Dalian] have been increasing by 50 percent annually. And China is now

becoming the country that develops the largest number of university graduates. Though

in general our English is not as competent as that of the Indian people, we have a

bigger population, [so] we can pick out the most intelligent students who can speak

the best English."

Are Dalian residents bothered by working for the Japanese, whose government has still

never formally apologized for what the wartime Japanese government did to China?

"We will never forget that a historical war occurred between the two nations," he

answered, "but when it comes to the field of economy, we only focus on the economic

problems-especially if we talk about the software outsourcing business. If the U.S.

and Japanese companies make their products in our city, we consider that to be a good

thing. Our youngsters are trying to learn Japanese, to master this tool so they can

compete with their Japanese counterparts to successfully land high-salary positions

for themselves in the future."

The mayor then added for good measure, "My personal feeling is that Chinese youngsters

are more ambitious than Japanese or American youngsters in recent years, but I don't

think they are ambitious enough, because they are not as ambitious as my generation.

Because our generation, before they got into university and colleges, were sent to

distant rural areas and factories and military teams, and went through a very hard

time, so in terms of the spirit to overcome and face the hardships, [our generation

had to have more ambition] than youngsters nowadays."

Mayor Xia had a charmingly direct way of describing the world, and although some of

what he had to say gets lost in translation, he gets it-and Americans should too:

"The rule of the market economy," this

Communist official explained to me, "is that if somewhere has the richest human

resources and the cheapest labor, of course the enterprises and the businesses will

naturally go there." In manufacturing, he pointed out, "Chinese people first were

the employees and working for the big foreign manufacturers, and after several years,

after we have learned all the processes and steps, we can start our own firms. Software

will go down the same road . . . First we will have our young people employed by the

foreigners, and then we will start our own companies. It is like building a building.

Today, the U.S., you are the designers, the architects, and the developing countries

are the bricklayers for the buildings. But one day I hope we will be the architects."

I just kept exploring-east and west. By the summer of 2004,1 was in Colorado on

vacation. I had heard about this new low-fare airline called JetBlue, which was

launched in 1999. I had no idea where they operated, but I needed to fly between

Washington and Atlanta, and couldn't quite get the times I wanted, so I decided to

call JetBlue and see where exactly they flew. I confess I did have another motive.

I had heard that JetBlue had outsourced its entire reservation system to housewives

in Utah, and I wanted to check this out. So I dialed JetBlue reservations and had

the following conversation with the agent:

"Hello, this is Dolly. Can I help you?" answered a grandmotherly voice.

"Yes, I would like to fly from Washington to Atlanta," I said. "Do you fly that route?"

"No, I'm sorry we don't. We fly from Washington to Ft. Lauderdale," said Dolly.

"How about Washington to New York City?" I asked.

"I'm sorry, we don't fly that route. We do fly from Washington to Oakland and Long

Beach," said Dolly.

"Say, can I ask you something? Are you really at home? I read that JetBlue agents

just work at home."

"Yes, I am," said Dolly in the most cheerful voice. (I later confirmed with JetBlue

that her full name is Dolly Baker.) "I am sitting in my office

37

upstairs in my house, looking out the window at a beautiful sunny day. Just five

minutes ago someone called and asked me that same question and I told them and they

said, 'Good, I thought you were going to tell me you were in New Delhi.'"

"Where do you live?" I asked.

"Salt Lake City, Utah," said Dolly. "We have a two-story home, and I love working

here, especially in the winter when the snow is swirling and I am up here in the office

at home."

"How do you get such a job?" I asked.

"You know, they don't advertise," said Dolly in the sweetest possible voice. "It's

all by word of mouth. I worked for the state government and I retired, and [after

a little while] I thought I have to do something else and I just love it."

David Neeleman, the founder and CEO of JetBlue Airways Corp., has a name for all this.

He calls it "homesourcing." JetBlue now has four hundred reservation agents, like

Dolly, working at home in the Salt Lake City area, taking reservations-in between

babysitting, exercising, writing novels, and cooking dinner.

A few months later I visited Neeleman at JetBlue's headquarters in New York, and he

explained to me the virtues of homesourcing, which he actually started at Morris Air,

his first venture in the airline business. (It was bought by Southwest.) "We had 250

people in their homes doing reservations at Morris Air," said Neeleman. "They were

30 percent more productive-they take 30 percent more bookings, by just being happier.

They were more loyal and there was less attrition. So when I started JetBlue, I said,

'We are going to have 100 percent reservation at home.'"

Neeleman has a personal reason for wanting to do this. He is a Mormon and believes

that society will be better off if more mothers are able to stay at home with their

young children but are given a chance to be wage earners at the same time. So he based

his home reservations system in Salt Lake City, where the vast majority of the women

are Mormons and many are stay-at-home mothers. Home reservationists work twenty-five

hours a week and have to come into the JetBlue regional office in Salt Lake City for

four hours a month to learn new skills and be brought up to date on what is going

on inside the company.

38

"We will never outsource to India/' said Neeleman. "The quality we can get here is

far superior . . . [Employers] are more willing to outsource to India than to their

own homes, and I can't understand that. Somehow they think that people need to be

sitting in front of them or some boss they have designated. The productivity we get

here more than makes up for the India [wage] factor."

A Los Angeles Times story about JetBlue (May 9, 2004) noted that "in 1997, 11.6 million

employees of U.S. companies worked from home at least part of the time. Today, that

number has soared to 23.5 million-16% of the American labor force. (Meanwhile, the

ranks of the self-employed, who often work from home, have swelled during the same

period-to 23.4 million from 18 million.) In some eyes, homesourcing and outsourcing

aren't so much competing strategies as they are different manifestations of the same

thing: a relentless push by corporate America to lower costs and increase efficiency,

wherever that may lead."

That is exactly what I was learning on my own travels: Homesourcing to Salt Lake City

and outsourcing to Bangalore were just flip sides of the same coin-sourcing. And the

new, new thing, I was also learning, is the degree to which it is now possible for

companies and individuals to source work anywhere.

I just kept moving. In the fall of 2004,1 accompanied the chairman of the Joint Chiefs

of Staff, General Richard Myers, on a tour of hot spots in Iraq. We visited Baghdad,

the U.S. military headquarters in Fallujah, and the 24th Marine Expeditionary Unit

encampment outside Babil, in the heart of Iraq's so-called Sunni Triangle. The

makeshift 24th MEU base is a sort of Fort Apache, in the middle of a pretty hostile

Iraqi Sunni Muslim population. While General Myers was meeting with officers and

enlisted men there, I was free to walk around the base, and eventually I wandered

into the command center, where my eye was immediately caught by a large flat-screen

TV. On the screen was a live TV feed that looked to be coming from some kind of overhead

camera. It showed some people moving around behind a house. Also on the screen, along

the right side, was an active instant-messaging chat room, which seemed to be

discussing the scene on the TV.

"What is that?" I asked the soldier who was carefully monitoring all the images from

a laptop. He explained that a U.S. Predator drone-a small pilotless aircraft with

a high-power television camera-was flying over an Iraqi village, in the 24th MEU's

area of operation, and feeding real-time intelligence images back to his laptop and

this flat screen. This drone was actually being "flown" and manipulated by an expert

who was sitting back at Nellis Air Force Base in Las Vegas, Nevada. That's right,

the drone over Iraq was actually being remotely directed from Las Vegas. Meanwhile,