2012 August 29 Wednesday
Small Groups Make Large Fortunes

VMWare illustrates how much fortune-building no longer depends on having huge factory workforces. When (if ever) will US immigration policy catch up with this fact? Success is about very high quality, not quantity.

“If you think back to 2002, VMware had a great team of 100 engineers who could really make server virtualization sing,” Maritz told Wired this week, during an interview at the company’s massive VMworld trade show in San Francisco. “Having the services of those 100 engineers turned out to be incredibly valuable. They did something that really transformed the industry and they gave rise to an asset that’s worth plus-or-minus $40 billion.

“The same sort of thing is going to happen in the networking industry.”

The article is about how WMWare just bought a company called Nicara for $1.26 billion and how its engineering staff is similar size to VMWare's staff in 10 years ago. We live in an era when robots are becoming more able to displace human workers in factories and wages are in decline. Why import any workers who aren't capable of helping to create businesses with revolutionary technologies? The economy's need for the poor and ignorant is in relentless decline.

Update: Check out trends in employment in manufacturing. The only educational level experiencing an increase in employment in manufacturing industries: advanced degree holders. Manufacturing needs more brains and less brawn. The same is happening in Silicon Valley where companies with large manufacturing divisions have given way to companies with staffs that are half engineers and few manufacturing workers.

Share |      By Randall Parker at 2012 August 29 10:43 PM  Economics Labor


Comments
Abelard Lindsey said at August 30, 2012 8:37 AM:

Randall,

I agree with you about immigration policy. However, the problem seems to be self-correcting (as most problems do in time). Latino immigration has stopped, partly due to our lousy economy, but more significantly due to the decline in birthrates in Latin America over the past 20 years.

This decline is real. I visited Mexico a few years ago and saw that the place was totally different than when I visited it in the mid 80's. This time, I did not see lots of young children playing around in the plazas. Indeed, I felt like I was in an Asian country rather than the "old" Latin America. Same for Costa Rica. Indeed, our biggest immigrant group now are Indians, who do tend to be educated.

Norman said at August 30, 2012 4:28 PM:

We need a fundamental restructuring of institutions and mentality worldwide. If democracy today means the rule of majorities and the poor and ignorant are the majority, then could be headed for disaster. I mean if we don't find a way to make this world more equal, the rich and well educated are in serious trouble eventually.

Now, K-12 education in Mexico has been obliterated these last 20-30 years, and surprisingly it used to be of much higher quality, depth and of course, content than that in the U.S.A. Today, children's attention span is seriously low.

Today Mexico has become sort of a fascist, narcocracy, from which will be very hard to recover. There will continue to be more illegal workers and more legal-border-crossing organized criminals, which might even include former govenors and politicians.

Randall Parker said at August 30, 2012 9:10 PM:

Abelard Lindsey,

No, a self-correcting problem would be a problem that became smaller, not a problem that ceased to become bigger. Also, it has not ceased to become bigger.

Norman,

I think there should be a minimum intelligence threshold for getting the vote. I can not see how dummies should be allowed to choose leaders.

Mike said at September 1, 2012 1:55 PM:

"I think there should be a minimum intelligence threshold for getting the vote. I can not see how dummies should be allowed to choose leaders."

Sounds logical, but then again, only a very small percentage of the population would be able to vote. What should we call a system like that? An oligocracy will probably be better than a democracy, who knows.

Randall Parker said at September 2, 2012 8:31 PM:

Mike,

A few points:

- We could set different IQ thresholds for different elections. Make the threshold higher for more important higher level roles.

- We can get pretty good results with the top 20%.

- We could create new elected positions chosen only by smart people and those positions could be empowered with veto power over leaders chosen by the masses. So the smarties could restraint without cutting out the masses entirely.


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