I wrote this piece recently in a column i contribute to for the Huffington Post link
In the past year we’ve seen the amount of time UK freelancers are selling their services to companies abroad (and in particular to far Eastern countries) more than double on PeoplePerHour. You’d think that these are specialist services from the upper echelons of our labour force. But they are not. They are skills that the average middle class Brit has, thanks largely to our education system. Skills like writing good English copy, organizational task, helping a small business to basic math or data management, voiceovers, and some more specialised skills like design and technical development work
These services ‘exported’ to the fledgling SMB sector in less developed countries is a reflection of a basic macro-economic principle: what’s in abundance in some countries is scarce in others. The Western economies like the UK may have some of the most sophisticated medical systems, militaries and – once although dwindling – manufacturing infrastructures. What is often overlooked, is that we also have is a middle class that’s more educated than most economies across the world. The middle class is what emerging economies are in need of the most in order to trickle down their new-found wealth to small and medium sized businesses – which, lo and behold, become the backbone of a developed economy.
It’s not until a middle class emerges that an economy can become truly ‘developed’ with efficient distribution of income. But that takes decades, it takes a sound education system that enables not just the wealthier families to send their kids to; it requires a welfare system to develop and a culture shift from large state owned industries to a culture of entrepreneurialism.
To accelerate the process these economies are turning online. What the McKinseys of this world have been able to deliver to the top industrialists first, the SMBs are turning to labour in the crowd for. And they pay a premium for it (albeit not exactly the draconian fees of the McKinsey and other Western globalizes agencies)
The average British freelancer on PeoplePerHour earns $35 per hour. The equivalent for the Philippines and India is nearer $9 per hour. Yet SMBs in India are turning to Brits and Americans on PeoplePerHour to get the basic building blocks of their companies in place. Like designing a website, producing marketing content for it, a financial model and business plan, a go-to-market strategy and so on. Whilst the East has shown tremendous potential to overtake the West in low-cost production these are skills that still the Western Economies have mastered more than most.
The potential for this is huge for both economies. Much like the online education market is today allowing millions of people across the world to access education that is otherwise inaccessible to them, online work marketplaces are similarly allowing those skills which are in much richer supply in the UK and the US to be accessed by small and medium sized businesses in the East. Businesses which cannot afford fancy consultants and agencies. Education is really the underlying commodity for both.
In my opinion the governments in the West should be more to drive this. At a time when the UK and US are running historic highs in current account deficits, and when manufacturing output is dwindling and more sophisticated services like financial services are arguably dormant if not extinct, we should be looking more at how to actively put our labour force online. We should be channeling ubiquitous, basic home grown skills to companies and people alike who need them in other less developed parts of the world.
The world becomes a better place for it and we boost our economies at a time when it’s most needed. Rather than pay people to be unemployed I say get them on computers, train them and get them online to start offering the skills they have across the world. That can drive real step change.