Thursday, November 02, 2006

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OUTSOURCING THE METAVERSE

Illusion_factory_by_day

In a country once ravaged by war, tyranny, and poverty, a virtual niche emerges in the new world economy

The man behind the avatar known as "taelin Ng" begins his mornings in District 8 of Ho Chi Minh City, Vietnam, in the small apartment he shares with his mother.  He only lives with his mother, because taelin's other parent died in the notorious re-education camps constructed in the wake of America's withdrawal from the country in 1973.  ("Where communist send the people who work for US Army," taelin explains to me helpfully, though he's not sure what ultimately did his father in.  "I was young and not sure... My mom said he was sick in there.") 

To get to work, says Ng, "I ride bike, just like others."  The streets of Ho Chi Minh teem with mopeds, in numbers far eclipsing cars, or even pedestrians; it's seemingly an entire city that transports itself on two wheels, even if that means several people squeezing themselves onto a single bike.  (It's not uncommon to see an entire family of four or five on one moped.)  Like Ng, most of them are on their motorbikes to get to work, because while the hourly wages are paltry (minimum wage in Vietnam is $43 a month), in these free market boom times, employment is plentiful.

Swarms of moped-bound workers veer off toward garment and shoe factories, while other wheeled phalanxes make their way to semiconductor assembly plants, or to the docks where all those goods are loaded onto massive crates that are craned onto the mouths of behemoth cargo ships which, once engorged, lumber off to the ports of developed nations across the globe.

Not that Ng particularly likes the commute by motorbike. "I hate it," he tells me. "My butt hurts." 

When he arrives at his office, his own role in the global economy is waiting for him on a glowing screen. Like many of his fellow citizens, Ng works at a factory that outsources goods and services to the developed world’s consumers at bargain rates. It’s just that his production line involves the assemblage of cubes and spheres into a miniature city of vaulting towers and glass domes that cut through the fog of a digital sky.

Ng works on a private Second Life island actually called The Illusion Factory (direct portal here), and it’s the outpost of a multi-service film/TV production studio and special effects house based in Southern California. The CEO (known in-world as IrightI Shirakawa) envisions the company’s SL presence as a multi-tiered entertainment and education center that will also showcase projects for the company’s entertainment and corporate clients.

Interviewing_irighti_shirakawa
IrightI Shirakawa

“We will work to become an intellectual mecca in the metaverse,” IrightI tells me, with Hollywood brio.  “A place where bright minds may congregate and discuss matters of all topics and concerns.” To realize those goals, Shirakawa turns to his staff in Vietnam. “I have a team in my offices at Illusion Factory Saigon, who are on this full time.” (Saigon was once the name for Ho Chi Minh, before the conquering Vietcong re-christened the city for their leader.) He has a staff of eight and plans to hire more from the growing talent pool of computer-proficient Vietnamese, and much of their work will be devoted to building the company’s Second Life space.

On my visit, Shirakawa strolled with me on lush garden walkways, and we flew on hoverboards in between soaring spires that suggest a civilization that’s managed to merge technology with magic. Though still under construction, the exquisiteness of the Illusion Factory’s architecture and the finely conceived layout already rivals some of the best builds in SL’s history.

Illusion_factory_by_night

“They are all visual effects people,” Shirakawa tells me, nodding to our surroundings, “so they learned the interface and built this in two months.

“Give us a year... look out!”

IrightI Shirakawa says the Vietnamese outsourcing of his Second Life presence was a happy accident that came through a staffer’s family background. “My head of visual effects [in California] had a father who was mayor of Saigon at the fall of the war,” as he puts it, “so he moved home and took my department, and built it there for me. He is brilliant.”

Taelin_ng_and_cat_clapper
taelin Ng and Cat Clapper

He means taelin Ng, who learned his craft in 3D graphics at an American university in the Pacific Northwest.  "I miss the fast freeways and my super cool car,” he tells me. (His mother sent him to the States, to complete his education.)  I meet him at the Factory with another Vietnamese staffer with the somewhat cumbersome avatar name “IllusionFactory2006Cat Clapper” (who for brevity, I’ll just call Cat Clapper.) Unlike Ng, Cat acquired his technical skillset at home. “I learn in Vietnam as Bachelor of computer science, and have been working in game programming for 3 years,” he says.

Taelin Ng is the Illusion Factory island’s designer, while Cat acts as the Vietnam office’s general contractor. (Like Cat, his commute to the metaverse is moped-borne, from the city’s Binh Thanh District, and like Cat, has family griefs of his own. “My grandfather too died after the reeducation camp.”)

Cat_clapper_and_taelin_ng

For his work at the Illusion Factory, Cat Clapper gets $1000 a month. “That is quite a lot of money as salary here,” Cat tells me. (Having visited Saigon a few years ago, I can confirm you could live quite comfortably on that.) “Our living standard is low,” he goes on. “About $300 a month can be said OK.” For their work in the metaverse, other Illusion Factory staffers earn more than that: “Some are $600 month, some are $400 month,” Ng tells me. The staffers are paid not in Vietnamese Dong, nor Linden Dollars; IrightI Shirakawa pays his employees by wiring US dollars to the Illusion Factory bank account in Ho Chi Minh. (“We got official permission from the Vietnam government,” Shirakawa explains.)

The upshot of all this is a virtual world metropolis created on a professional level, built at hourly rates far below those 3D graphics designers and programmers based in the US and the EU would expect to earn. Now that so many of them are earning thousands of dollars from corporations and other real world organizations to create a presence in Second Life, this point is not a trivial observation.

I put that point to IrightI Shirakawa plainly: “[T]he community might object to having to compete with builders in a developing nation who require a lot smaller income than they do,” I ask him. [See sidebar below] “What would you say to that?”

“For us it was not about using offshore,” says Shirakawa.  “It was about helping my friend/employee reunite with his mom after 20 years of not seeing her.  The offshore was a side benefit that came to me for doing a nice thing.” In addition, he sees far greater advantages. “If we bring some wealth back to the countries that the US has ravaged,” he reasons, “we are bringing good karma to the planet and back to the US where it is so needed. So much of what we are bringing to Second Life is free. It is my hope to bring more good things to life, not to compete at all.”

And so a particularly lovely portion of Second Life keeps growing, emerging from a place many in America only recall with pain or guilt or both. And from that city comes a new kind of place that exists there and here and in the landscape of data we all share, emerging rapidly at economic rates through the skills of enormously talented hands.

“We work on about 10-12 or 15 [hours a day],” Taelin Ng tells me. “Depend on the day. I'm here all the time in the office.” They both love the work.

“I think this is the future of the world,” Cat Clapper tells me. “I mean virtual space. It may evolve or change in some way but finally, the world need a virtual space like this. The real world may pose some limit. The virtual one can solve them. Like we are talking right now and partly see each other just in several minutes.”

Cat grins at me from Saigon, and less than a second later, his grin arrives on my screen in San Francisco. “With real world, a fly is need.”

Meeting_taelin_ng_and_cat_clapper

Sidebar: Top content creators, on outsourcing Second Life

I asked ten of SL’s best builders and scripters (most of whom make some or all of their living through content creation in Second Life) if they were threatened by competition from creators in developing nations. Nine replied:

Catherine Omega: I get requests for bids every day, simply because people know my name. From my point of view, that's what matters, not whether I can put in X hours coding. In fact, I could just outsource it to someone who COULD provide it cheaper.

So I think that globalization in that sense is a very good thing, as it builds other nations' tech bases.

SignpostMarv Martin:  SL is a nation, and outsourcing work to other nations is bad for the unemployment level of the root nation. Work should be given to the people of a nation first, then the people of other nations.

Eggy Lippmann: Well, that's [my] whole plan. Portuguese people [like me] are cheaper, so we charge about half of what Electric Sheep Company does. As for people coming from even cheaper nations, that's great. It means I can hire them.

Relee Baysklef:  I don't know if there would be much difference between content made in Second Life by a Westerner and something made by a team of exploited people in some barrel of codemonkeys… I'm not particularly worried about getting edged out by a barrel of codemonkeys, though. Even big businesses in SL become small businesses that have to compete with other small businesses, and people who make things for free.

Chip Midnight: Most of the time when people commission art or content their decision is based on reputation or individual style, and when it's not I think most people, even from developing nations, will charge what the market will bear.

Dane Zander: I would feel threatened, yes.... but also have the opportunity to subcontract them for any projects I undertake. [laughs] So it's a two edged sword, I guess.

Neil Protagonist: I bill what I think I am worth based on my needs and the client's budget… if they want to save a buck by outsourcing, that’s wholly their business, not mine. If anything I am in favor of Second Life being a global marketplace. If SL can enable people in India, China, Russia or wherever in the same way it has enabled the people who are currently in Second Life, I think that’s a great thing. Not to mention I have always been in favor of anything that promotes a higher quality of content in SL.

Stella Costello: I don't know, Hamlet, you won't see me with some picket sign shouting "Scab". Most content developers should know they are damn lucky for the opportunity they have. Someone will always be willing to work harder, faster, and with more zest for less money. They might even be more thankful than you, too.

Aliasi Stonebender: The majority of content creators-- with a handful of big-name exceptions-- are practically giving things away as it is. Perhaps a creator from a developing nation would find the barrier to actually making a living using SL lower, due to an overall lower cost of living... but in the end it doesn't personally bother me; creativity isn't Nike shoes. [grins] People who want my stuff and my outlook on matters ain't going to find it elsewhere.

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Relee Baysklef

LOL Between Eggy and Chip. I think you give me too much credit, but I am a rather outspoken squirrel.

The specific story here is a little more soft-hearted than the sort of sinister corporate wageslavery that I had in mind during our talk, but my opinion stands.

I don't really have anything against any particular content creators, but as a socialist I find both heedless globalization and outsourcing to be criminal.

These places should have, and should DEMAND a higher standard of living. By outsourcing, corporations and organizations are contributing to the enslavement and explotation of people to produce goods and services they can't enjoy themselves.

We have labor laws and expectations here in Canada, and they have them in the states and in other 'developed' nations. These laws exist to say what a business can and can't do to their employees. No whipping for example...

By outsourcing to nations without these laws and expectations, corporations are defying the laws in their home countries and just finding someone else to exploit. Worse still, it takes away the honest work of the people in these 'developed' nations, further dividing the rich and poor here.

It's absolutely criminal, yet the corrupt governments do nothing to stop it. Politicians are the ones who own these companies after all.


Criminal.

eggy lippmann

Relee, I'm sorry but you don't know what you're talking about. I live in a perfectly democratic nation who has been in the EU for ten years.
Yet our average salary is about a third of that in America. Why is this? Well, economics is a complex matter, but one reason that is often cited is that the portuguese government has too many socialist protections in place :)
We may earn 1/3 as much as you but overall we have a decent standard of living - only 22% of people below the poverty line, compared to 30% in America, a lot less violent crime, less pollution, no racial tension, our unemployment rate is about half of yours, etc. :)
I was just in Argentina for 2 months. I could live rather comfortably there on a mere $500 / month and I really miss it. I would have stayed, if it weren't for all my friends and family being on this side of the atlantic, and in fact, I got really depressed when I came back, and sort of regretted doing so :P

SignpostMarv Martin

you forgot to mention that I said the work should be given to the people of the root nation first, unless the people in the root nation suck. (in which case you would outsource the work while training up the people who suck at doing the work)

Don't have time to read this fully, so I'll have to wait till I get back to SL on monday.

P.S. Hamlet- you forgot to linky linky my name up :-P

csven

I stumbled across the Illusion Factory island a month or so ago. I thought it felt disconnected; the services offered by the company and the build itself didn't seem cohesive to me. Now I better understand why I got that impression. It's an understandable result under the circumstances.

It will be interesting to see how projects such as this become increasingly integrated such that in the future I can no longer detect a disconnect.

Aliasi Stonebender

Quite so, Eggy. It doesn't matter if a hamburger costs $1 or $100 or a thousand rubles, so long as there's hamburger to buy; everything else evens out over time. So it's not necessarily fair to simply gasp in horror at the absurdly low wages someone overseas is making; they're often accompanied by absurdly low prices by "first world" standards.

Relee Baysklef

I wasn't really talking about wages. I know that different nations have different social programs; as a Canadian my college tuition was vastly lower than an American would expect to pay. However, it continues to be a problem that businesses take advantage of this disparity of expectation and exploit people who are desperate to work and have low standards, as well as taking advantage of government social programs that should rightly be supporting their own people and not foriegn businesses.


The details and specifics of the global economy are surely beyond me, a mere computer programmer, however I can at least claim to know my own values and what I see as right and wrong. To me, this is a terrible injustice against all of humanity that carries on as if it were all an unavoidable consequence of life.

csven

I would be careful to overly-generalize that businesses simply head overseas with the primary intent of taking advantage of low wages and exploiting people. It's just not that simple.

For example, imagine a shoe manufacturer heads overseas to manufacturer *not* because of the low labor costs, but because of the lower environmental restrictions or because it's cheaper to keep the plant where all the suppliers are located. Let's assume (and know that this *has* happened) that a corporation offers a very good wage by local standards to attract the best workers; and yes, it's obviously lower than wages in the Developed Countries. But what if the wage is too high by those local standards? Imagine what happens when someone who operates a machine that cranks out shoe soles suddenly makes more than a doctor or a scientist? Suddenly you start getting into upsetting a social balance, and the result is that the company has to lower wages because the society itself wants to ensure that the value of a good education is maintained (or, after all, most people will simply drop out of school for those good-paying but future-less jobs).

So I'd warn against being too quick to jump on the business-bashing bandwagon. This isn't just the business at fault, it's we as consumers who want "Everyday Low Prices" and it's a government that enacts environment protection measures and another that doesn't, it's government subsidies in many of these foreign nations, etc etc etc. This issue is trickier than how you characterize it. What you see as "wrong" may in fact be the best option. Best intentions and all that....

IrightI Shirakawa

It is indeed a perceptual universe and how you choose to evaluate each perception will determine your final outcome.... even in your second life.

As the owner/founder of The Illusion Factory, I have spent the last 28 years of my life creating a mecca for creative individuals to come to place of employment in which they are respected, appreciated, paid well, given outstanding medical benefits... and allowed to have personal lives that interfere with their work life. We have worked for all of the major studios and many of the Fortune 500 companies, and despite the tremendous stress we are under or deadlines we are working to meet, we maintain one rule. Creativity reigns supreme.

Creatives in my company are encouraged to grow, explore, develop, learn, and utilize all technology to implement their own brand of incessant creativity. Our entry into second life was nothing less. We have built a reputation for implementing our creativity on any new form of emerging technology, so Second Life was an obvious mecca.

We entered into SL with no intent whatsoever of competing with inworld builders, or other companies for that matter. I am sure we have competition in the real world for what we do, but with 25 divisions of creativity at The Illusion Factory, watching or even acknowledging our competition would be a complete waste of time. We do not try to compete, we do not employ competitive techniques, we are so focused on what we are setting out to accomplish, we welcome the rest of the "competition" as creatives who are equally desirous of personal expressions.

The Illusion Factory produces products on its own dime that inform and empower people. We do it in the US, I have more than 30 people full time in the US working here at any one time, and substantially more during peak months. These projects include a book for kids that teach them the four magic words.... I Can Do It. It includes dvds that teach children how to defend themselves when cornered by a bully and women how to escape if their life is being threatened. I am very proud of these products because they are true indicators that not all we produce is profit driven, some is designed to be in the world just to make the world a better place. Someday, I will get a letter from a mother or a child who was a beneficiary of our dvds and I will know that I have made a real difference in the world, even if there is no monetary gain, and a huge loss attached.

When I read about how Taelin and his team is being described, it gave me pause for reflection. For all the years that I have been running The Illusion Factory, had I suddenly become a sweat shop without my knowing it? Perhaps all the facts were not considered. First, Taelin is perhaps the brightest, most talented person in visual effects that I have ever met. He worked at The Illusion Factory in the United States for a long period of time, and was my highest paid employee here. At his request, he wanted to move home. This would not have been my first choice, but as shared in my note above, we put personal lives higher on the priority list than business lives.... so I was more than willing to comply.

Taelin suggested the possibility of building an Illusion Factory Saigon office with me. I would be lying to say at first I was hesitant, but curiosity got the better of me, and as it involved me helping a dear friend, it was a choice that was made to help a friend, not an evil corporate move to take work from my US staff and move it overseas to exploit the poor people of another country. Most importantly, Taelin would reunite with his mom, which was key to him. SO it became key to us too. I told Taelin that the only way I would do this was if he was a partner in the venture and that the employees there would profit share from whatever developed.

Making an employee a partner in a venture and letting people in Vietnam profit at US rates for their work is a dream come true in Saigon. I never set a wage structure with Taelin, he has been free to hire as many of his friends as he wants for whatever rate their work commands in their country. He is the expert there, not I.... so it has always been in his control. Plain and simple. There is no sweatshop, nor an attempt to exploit. There was a move on my part to reach out and send some positive karma to vietnam... and given what my country did to theirs, I would say we owe it to them in spades.

The United States has stumbled repeatedly in foreign affairs. We have tarnished our reputation abroad and our word is not as valuable as it once was. Our reputation is wilted. To unfairly characterize a company as potentially exploitational for trying a new business model without all the facts is also a sad choice, because in the end, a company is only as strong as the vision directing it.

The truth is that we tried to build out Illusion Factory with some star in world SL designers before we opened in Saigon. We paid a substantial fee to another company who specialized in building SL structures to accomplish that task, and in the end, their creative vision did not match ours, we paid for the services in full and then removed the build completely and started afresh.

With regard to whether we are being unfair to builders in world, with unfair competition, I would say that we do not see ourselves competing with them in any way shape or form. That is not our purpose in SL. We see this as a vast new horizon, complete with challenges of the top magnitude. We are excited to be a part of the projects that we are developing and we have no interest in taking money, business or opportunity away from anyone in SL. We only want to add to the overall experience and let our brand of creativity shine in this world too.

We set out to build the World's First Theme Park in the metaverse, and we are succeeding. We have numerous clients who will now share some of their creative resources with us to program this theme park with entertainment opportunities that may never have come to SL without our presence.... and we are providing almost all of it free to SL visitors. Not to mention the new visitors that we will attract through our own promotions.... who will then venture to other sites in SL and spend money there.... sort of an anchor tenant situation.

We opened our theme park early as we wanted to talk to people who arrived and discuss what they liked, disliked and most importantly, what they wanted to see come to the metaverse. We knew it was only partially done, but we could get input that way....which is a cool feature of SL>

Given our unique relationship to the multiple branches of the entertainment community, we felt that we could be a conduit to the opportunities that are so distinct in SL.

I understand the sidebar and the chance to ask inworld developers if they feel threatened by us. if they did not before being asked, perhaps in the way that we were explained to them, they may feel now that we are a competition.... I would disagree that there is any need to feel threatened as we do not see anything we are doing as competitive. We are a very collaborative company and we seek mutual opportunities with other companies that wish to work with a company that seeks specifically to create win/win scenarios. Everyone who walks away from working with us is paid in full, treated with respect and appreciated. That is how the world should be....

and as Gandhi said.... WE MUST BE THE CHANGE WE WISH TO SEE IN THE WORLD.

I sleep soundly knowing that I ascribe to that motto. I do not create sweatshops, nor do I condone them. If more US companies, and the US government acted accordingly, the US might have a few more international friends than we do currently, and we could go back to helping emerging nations find their new place on the global village, rather than destroying them for our own personal gain.

Brian Weiner
CEO
The Illusion Factory
[email protected]
www.illusionfactory.com
818 598 8400

Paradox Olbers

IrightI and Brian,
bravo! An eloquent rebuttal and an inspiring reminder of why so many of us became, or are becoming, residents in SL.

And the other comments have taught me more about other lives on our planet than I often learn in a month otherwise. More of the tech amplifier that IrightI mentioned - the ability for two or many to speak without needing to send their bodies.

Arthur C. Clarke pointed out in 1960 that with either perfect transportation OR communication, you didn't need the other.

-Paradox Olbers

SignpostMarv Martin

Catherine Omega

I get requests for bids every day, simply because people know my name. From my point of view, that's what matters, not whether I can put in X hours coding.

Relee Bayskelf

Even big businesses in SL become small businesses that have to compete with other small businesses, and people who make things for free.

Chip Midnight

Most of the time when people commission art or content their decision is based on reputation or individual style, and when it's not I think most people, even from developing nations, will charge what the market will bear.

Aliasi Stonebender

creativity isn't Nike shoes. [grins] People who want my stuff and my outlook on matters ain't going to find it elsewhere.

csven

I stumbled across the Illusion Factory island a month or so ago. I thought it felt disconnected; the services offered by the company and the build itself didn't seem cohesive to me.

Brian Weiner

we maintain one rule. Creativity reigns supreme.

We entered into SL with no intent whatsoever of competing with inworld builders, or other companies for that matter.

With regard to whether we are being unfair to builders in world, with unfair competition, I would say that we do not see ourselves competing with them in any way shape or form. That is not our purpose in SL.

The truth is that we tried to build out Illusion Factory with some star in world SL designers before we opened in Saigon. We paid a substantial fee to another company who specialized in building SL structures to accomplish that task, and in the end, their creative vision did not match ours, we paid for the services in full and then removed the build completely and started afresh.

All examples reinforcing what I was saying about giving work to the people of a nation first, unless they suck.

stella

If you want to learn about outsourcing and more informations, this site will be help full to you
and it's having good suggestion for outsourcing, commercial law , commercial property law,
commercial and consumer law etc.

Outsourcing

jihae

FOR THOSE EMPLOYED TO WORK IN SECOND LIFE - Can you tell me how you pay taxes on your earnings?

MonkeyseeMonkeydo

Ahh and hows this all working out 6 or 7 years later looking inworld most of these accounts are dead and secondlife in decline

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