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As Process Evolves, So Too Does The Location Supporting It

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As Process Evolves, So Too Does The Location Supporting It

In some ways, the title of this post is stunningly obvious.  But on a recent trip to Silicon Valley, my visiting colleague...

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In some ways, the title of this post is stunningly obvious.  But on a recent trip to Silicon Valley, my visiting colleague Ben Pring and I had a discussion about the tech industry’s concept of “Space”, i.e., locations and office parks where most tech and tech-enabled work gets done.  Beyond the gleaming new “Space” of places like the GooglePlex campus, most Silicon Valley office parks are of a “certain age” – built out in the early-to-mid `80s, low-slung, and boxy; their landscaping now pushing 30, spindly redwood trees once barely framing parking lots are now towering giants.  With the advent of work-at-home arrangements, some of these places have seemingly had “available/for rent signs” since the dot-com bust of the early 2000s.  For years, many looked like victims of a neutron bomb attack: functional enough to look at, but weirdly devoid of people. With the onset of the current resurgent boom in tech, occupancy is back up in Silicon Valley again, but a lot of the “action” and build-out is, in fact, taking place in San Francisco proper.

The subject of “where the people are, and where have they gone?” brings me to a recent blog post in The Atlantic Cities: It showcases the build out of outsourcing-centric Filipino facilities that’s been happening all across Manila.  Not-news is that fact that the “work at home” model was facilitated by the Internet, and taking its logical course, the time/space/processing power of the Internet gave rise to the explosion of offshore outsourcing (India, most predominantly).  And the past 5-plus years or so, Manila has exploded too – mostly for BPO services.  The Manila model of the build-out of “Space” for BPO work has been fascinating to watch.  As recently as 2010, when I travelled to the Philippines, seeing the delivery centers for HR BPO and FAO – and we’re talking within the same service provider – meant jumping in a taxicab to navigate from one floor of an office building for the HRO team in Makati in the middle of the night to another floor in another part of town to meet with the FAO folks.  Back then Manila was really the only option – second-cites like Cebu was just getting started – and its Makati was ground-zero.

Fast forward a few years, and the build out of secondary and tertiary sites in Manila – and across the Philippines – has been impressive (I can hear all of you in India yawning… “Mumbai here: been there, done that…”).  The build out of the once-nascent Cebu is now mature, and the leverage of additional sites like Iloilo and Davao continues apace.  Heck, anyone remember the former Clark U.S. Air Force Base and the eruption of Mount Pinatubo in 1991?  Clark AFB was converted – it’s now Clark Freeport Zone, near the city of Angeles – it’s the ultimate “guns-to-butter” story.  And now this from Bloomberg, via The Atlantic Cities: full, purpose-built centers – entire communities – in the Philippines, centered on the BPO industry. 

Again, this is India… repeating… sort of.  But what about those neutron-afflicted buildings in California?  One wonders – with the imminent wave of automation of process predicted – will the centers being built out today in the Philippines, or Romania, or Brazil become a “rust belt” in a generation?  It’s really too early to tell.  We’ve blogged a few times recently that the real play for automation is ultimately the melding of machines enabling people in judgment-based processes – so whether the Philippines can climb the curve remains to be seen (let alone California, or the rest of the US for that matter… or India).

But there is no question that the outsourcing industry has brought a level of prosperity not seen in the Philippines in recent memory.  My last trip around the city center of Makati in central Manila revealed a plethora of stores not previously seen, like Burberry, Aeropostale and Chuck E. Cheese (believe it or not, Shakey’s Pizza has been a staple in Manila for years).  It was Friday night of pay-day at the outsourcing centers, and throngs of young 20-somethings crowded the streets with money in their pockets, ready to spend.  For those pundits at western media outlets wondering “where the middle class has gone”, you’ll find them there: the young professionals shopping in the Salvatore Ferragamo store in downtown Manila on payday Friday.  Or was it Mumbai?  Or Mountain View?


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