North Korea Vs. China In IT Offsourcing
Just read a fascinating report on North Korea's outsourcing industry, written by GPI Consultancy Dutch IT sourcing consulting firm out of Rotterdam, (big h/t to China Rises: Notes From the Middle Kingdom). A few months ago, I sat next to a French consultant on a Seoul to Beijing flight and he told me how he had just recently been to North Korea to look into its animation outsourcing business. He talked about the sophistication of its animation work and how Chinese and European companies were outsourcing animation work to Pyongyang.
This report talks about the high level of software and animation work coming out of North Korea and touches upon the relationship between China and North Korea in this arena. Seems many of the North Korean software companies (all of which appear to be state owned) have offices in China due in large part to the difficulty one has in getting into North Korea.
I actually believe North Korea has tremendous economic potential and I am constantly vacillating between thinking business will lead to a loosening of despotic rule there and thinking that doing business with such a country is both ill-advised and immoral. No matter what I or others may think, the reality is North Korea is very slowly opening up to the world and for those interested in it as an IT outsourcing location, I recommend this report.
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Comments
I suppose you think just any north korean gets to work in that industry? Or the kids of mid level cadres and military officers? Stop it with this insane "its just business" justification. Even PLA troops on the northern border are openly discussing how NK refugees are treated when handed over to NK troops (they get a strand of barb wire run under their collar bone as a "leash").
There is a hell and those who support people like Kim Fat Troll and others in the name of "business" may well get a good look at it.
Posted by: nanheyangrouchuan | December 11, 2006 7:36 AM
nanheyangrouchuan --
I assume everyone in NK's software and animation industries has governmental ties and has been triple vetted. Of course.
I do not subscribe to the "its just business" justification. Rather, I am questioning what is the best way to get rid of someone like "Kim Fat Troll." Is it to force the country open or is it to shut it down?
When I was in college, I had to vote on whether to divest from South Africa. I bought into the argument of the Ford Motor companies that having American companies there was the best thing for South Africa because it would show them another way. After hearing about how South Africa's isolation eventually led to the end of apartheid, I later changed my mind about my vote.
I have many Korean friends, including a senator from the GDP party. All of them feel incredibly strongly about whether or not to do business with NK and they are on both sides of the question.
I would never dispute that Kim Jung Il is evil. He is. But that alone does not tell us what to do.
I just don't see issues like these as being either clear or easy.
Sorry.
Posted by: China Law Blog | December 11, 2006 3:39 PM
Kim has proven time and time again that the lives of his people are of no concern. Everyone who pays attention knows of the "food tax" north koreans must pay to the army and the party and that energy and non food items get consumed by the party and army. In fact the NK gov't didn't really get rattled about various embargos until their money flow got shut off, that says something .
CLB, you may your values in a row, but you know and I know many "business" people do not. They'll make a buck and try to wash that darned spot off of their hands every day.
Posted by: nanheyangrouchuan | December 11, 2006 7:14 PM
nanheyangrouchuan --
Everything you say (and far worse) about NK is true, but that does not answer the question as to how best to speed up Kim Jung Il's downfall. Fortunately, we Americans (don't know where you are) don't even have to face this question as are actions involving NK are pretty much circumscribed.
Posted by: China Law Blog | December 11, 2006 11:15 PM
I'll get this argument back on topic. I know the guy running GPI Consultancy. We both spoke at the last national software conference in DL this past June.
He really doesn't have a good handle on the outsourcing industry in China; no hands-on experience. Doesn't really know the players, either. (He may think he does, but he doesn't. I know; I've talked with him.)
North Korea as an IT outsourcing destination is ridiculous. End of discussion.
Posted by: David Scott Lewis | December 12, 2006 1:21 AM
Mr. Lewis --
1) I have no opinion on GPI Consultancy's knowledge of China IT outsourcing both because I do not know enough about GPI Consultancy and because I am not expert on China IT.
2) Come on. You have to give us more than that. Is it a myth about NK being good with animation? Believe me, I am skeptical that a totalitarian society like NK can ever be open and innovative enough to produce any top software people, but I am just a lawyer. So tell us more.
Posted by: China Law Blog | December 12, 2006 1:42 AM
Isnt some of either Pixars or Disney's animation done in North Korea through various back door companies.
Google it!
Posted by: ash | December 12, 2006 6:03 AM
It's easy to say Disney sourcing to Korea and conjure up an image of "creative" talent. However, the reality is that the 2D animations of Disney tradition require large amount of laborious hand processing and very long production line. The creative team in Burbank would come up with scripts, define the characters, story board and some key frames. The rest of them are laborious process like hand coloring, frame scanning and inspection. Those process has long been outsourced to Asian countries: Taiwan and South Korea most notability. Taiwanese subcontractors have been moving to China since early 80s and operate out of Hangzhou mostly. Disney uses large amount of subcontractors for their large animation output. There are also straight to video features, not just the big theater releases. It wouldn't be surprised some of the works fall to the studio in North Korea.
Citing that as evidence to say North Korea is good at animation is like saying some US military uniforms are made in China thus China is good at military technologies. Animation is a very long pipeline process.
http://www.atimes.com/atimes/Korea/DK13Dg03.html
Pixar is doing 3D animation which the final laborious processes are being done by big rendering farms of thousands of computers.
By the way, hello Lewis. Good to see you here.
Posted by: David Li | December 12, 2006 7:43 PM
Mr. Li --
Thanks so much for checking in on this one as I know you know software outsourcing so well. What you say makes complete sense and does not surprise me a bit. But, is there any high level programming going on in NK?
Posted by: China Law Blog | December 12, 2006 10:39 PM
Ash --
Thanks for checking in. Good question, to which I do not know the answer. There are U.S. laws that prohibit certain transactions with North Korea and I do not know them very well. Many years ago, when relations were better between the US and NK (but far from great), I had a client who inadvertently sent money to an NK company (not realizing it was such) in possible violation of US law and we had to work through this with the US government. It was not a big problem then, but it might be now. Have not had to look at the US laws re NK since then.
Posted by: China Law Blog | December 12, 2006 10:42 PM
There are probably some high level programming going on in North Korea. I won't be surprised to see NK ranking high in the next ACM programming contest. However, I think it will be the same problems with outsourcing to China: there may be some high level talents there but they are not easy to find.
Honestly, I only learn about outsourcing to NK from this blog. ;) Mr. Lewis has extensive experience with outsourcing to China. Check his interview in the following link:
http://www.sourcingmag.com/content/c051004a.asp
Posted by: David Li | December 15, 2006 8:10 PM