An American Editor

January 7, 2013

The Business of Editing: Will the Tide Turn for Us?

In the December 2012 issue of The Atlantic, “The Insourcing Boom” discussed the trend initiated by GE to return manufacturing to America from China. It and the companion articles discussing manufacturing offshoring and onshoring are well worth reading.

The article made various points about why offshoring originally occurred and why inshoring is the new manufacturing phenomenon. The articles correctly, I think, conclude that not all manufacturing will return to the United States but the more important aspects will.

What tickled my thinking when reading this article was what GE discovered when it returned to America: that many of the manufacturing skills that Americans had before offshoring became the rage had been lost and needed to be revived. GE and other manufacturers assumed that because it had once been done here it could easily be done again. But America had moved on.

The concept of offshoring was laid out originally by the Harvard economist Raymond Vernon who stated that as manufacturing of a product matured, meaning it no longer needed innovation and was just a repetitive process, manufacturing would be offshored to where labor costs were lower. This is what I call the Foxconn effect: The assembly workers simply do repetitive tasks when building, say, an iPhone; they are not expected to design or innovate. Consequently, massive assembly plants with thousands of workers are built in low-wage countries. Vernon’s theory of the manufacturing lifecycle has been repeatedly seen in the past few decades.

But this has changed as manufacturers increasingly become aware that quality is important and that offshored goods do suffer from quality problems — not that the quality was horrible, but that it wasn’t at the expected level as consumers began demanding higher quality.

Does this not sound like the publishing industry?

A British editor cannot be beat when it comes to editing a book for the British market; an American editor cannot be beat when it comes to editing for the American market. (And, yes, I know that each of us can point to an editor from another country who is a better editor than “native” editors. Every rule has its exceptions, which are not its majority.) Inshore editors know their markets and their cultures; it is one of the skills that they bring to the table. That knowledge, a part of the quality process, is what differentiates editors. As good as an Indian editor may be, the Indian editor lacks that intimate knowledge of America that makes a difference, just as the American editor lacks that knowledge of India.

What I hear all the time from the production editors I deal with is grumbles about the quality of offshored editing. Unfortunately, I expect to hear the same grumbles about onshored editing in the not too distant future. Part of the blame belongs with our educational system (see The Decline and Fall of the American Editor), but part of the blame belongs with the publishers themselves.

By offshoring editorial functions, publishers discourage people from considering editing as an occupation; the jobs aren’t there. That means that there is no reason for people to agitate for better language education. Afterall, if we do not need to know how to distinguish a noun from a verb, what difference does it make if we do not learn it? Publishers also discourage people from learning language skills by depressing wages for those few who do have/learn the skills upon which publishers rely. The wage depression comes about by publishers threatening to send even more work offshore because wages are low.

As Charles Fishman wrote in his The Atlantic article, “The Insourcing Boom“:

Harry Moser, an MIT-trained engineer, spent decades running a business that made machine tools. After retiring, he started an organization called the Reshoring Initiative in 2010, to help companies assess where to make their products. “The way we see it,” says Moser, “about 60 percent of the companies that offshored manufacturing didn’t really do the math. They looked only at the labor rate—they didn’t look at the hidden costs.” …

[According to] John Shook, a manufacturing expert and the CEO of the Lean Enterprise Institute, in Cambridge, Massachusetts[,] “…it was also the inability to see the total costs—the engineers in the U.S. and factory managers in China who can’t talk to each other; the management hours and money flying to Asia to find out why the quality they wanted wasn’t being delivered. The cost of all that is huge.”

But many of those hidden costs come later. In the first blush of cheap manufacturing, it’s easy to overlook the slow loss of your own skills, the gradual homogenization of your products, the corrosion of quality and decline of innovation….”

Slowly publishers are seeing the hidden costs of offshoring. In some instances, they are finding that true costs are higher than they expected. Quality is down. Schedules are being kept but at great sacrifice. Communication is difficult because of different work hours and holiday schedules.

At least one publisher is increasing the number of books it requires to be edited onshore; the quality issues became so great that both inhouse production staff and outside customers were complaining. In some instances, authors were refusing to work with offshore editors because of the communication gap.

But this is one publisher among many. Publishers are conflicted. They need to lower costs yet they cannot let quality decline greatly. There is no easy resolution. Yet I think the experience of the hard good manufacturers like GE will ultimately influence the offshoring decisions of publishers. It may take a decade — we all know that publishers are slow to change — but I expect that the offshoring trend, at least for editorial services, will reverse. I expect each year to see increased onshoring and less offshoring.

I also expect that noneditorial production, such as composition and printing, will continue to be done offshore as long as there is a wage advantage. This simply mimics what is happening with, for example, GE: those tasks that require creativity and collaboration are being repatriated; those that are “mechanical” and repetitive remain offshore.

Ultimately, the question for publishers will be, “Is the onshoring effort coming too slowly and too late so that they cannot find skilled editors and those that they can find command a price greater than they want to pay?” Will publishers come to regret having offshored to save pennies that are now costing dollars?

For editors, the tide of onshoring may be coming in and it may lead to higher wages for the more highly skilled among us. What do you think?

July 20, 2010

The Labor Market Keeps on Revolting

Recently I wrote about the labor problems at Foxconn’s China factories and my thoughts about the possible future consequences for editors (see Striking Workers and American Editors). But the news doesn’t seem to end as regards labor problems in China (see Bangladesh, With Low Pay, Moves In on China).

Although none of this is directly related to editors, as workers become more literate and able to compete for better-paying jobs, all wages will rise. I think this is the singular lesson of the industrial revolution, because the educational revolution was (and is) the mate of the industrial revolution.

Yes, it will be many more years before the “revolution” meets editors head-on, but then again, perhaps not. American editors suffer from the effects of offshoring to developing countries. It is a tidal effect in that it is the publishing jobs that require less education and lesser skillsets that enable offshore companies to package services for American publishers at a lower price than publishers can get onshore. (Take a look around: The higher the literacy the higher the wage structure throughout the society, and this is true historically.) But as wage pressure mounts from the bottom up in these offshore companies, something will have to give. I believe what will give is the significant price advantage that currently favors offshoring editorial work.

We must remember that editorial work, to be done competently, needs to be performed by literate people with higher-level skillsets. And as those on economic rungs below this level of literacy and skillset gain both literateness and skills and demand higher compensation, the pressure to maintain the distinction between the levels will increase, causing a rise in the compensation of the editorial level workers. I believe this is the singular truism of the marriage of industrialization and education, a marriage that is required to move from developing to developed.

Obviously, in the publishing world, my reference is to packagers who can underbid a panoply of services because the starting base for the most expensive portion of the package of services in the United States is so low. But just as America faced competition from China because China was able to underbid its services, China is now facing competition from less developed countries that are able to underbid China. And the reason, as noted in the New York Times article, is literacy — that marriage between education and industry.

It is the illiterate who form the low-wage backbone of the industrialization of developing nations. Yet to grow and compete, industry needs increasing literacy in its workers. Workers need to be able to comprehend computer instructions, for example. But as literacy rises, so does the demand for better wages and work conditions — and so the groundswell begins. Bangladesh, the competitor to China discussed in the New York Times article, has a 55% literacy rate, a rate that is comparable to China’s rates of the 1960s and 1970s when manufacturing began to move from made in the USA to made in China status. Now China’s literacy rate is 92%, which is giving rise to demands for socioeconomic parity with similarly literate countries, which means the developed countries of Europe and the United States.

Soon these trends, I predict, will hit India, which is currently the offshoring capital for American publishers. As Indians increase their literacy rate, the demand for better working conditions and higher pay will be felt. And as was (and is true) in western industrialized nations, the current literati will want to maintain their economic supremacy and so will also demand higher wages. At some point in the not-too-distant future there will be no financial benefit to offshoring. (As it is, I am seeing a trend away from offshoring editorial services among the companies that first thought it would be the answer.)

One other matter worth noting: With an increase in literacy comes an increased demand for reading material; books and magazines are the purveyors of knowledge, which is needed to keep moving forward. When that pent-up demand surfaces in a developing country like India, the local packagers will face the same problems American packagers face — competition for the local market.

Within the next decade, I predict the tide will turn and offshoring by American publishers will become onshoring because there will be no cost advantage to the offshoring. (We must not forget that even under the best of circumstances, offshoring is not problem-free.) I also predict that we may well see India and countries like India who currently are benefitting from the offshoring by American companies, offshoring themselves — to the United States.

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