Ed Catmull on outsourcing

In response to Gary Pisano’s critique of outsourcing (specifically offshoring) on the Harvard Business Review blog, Ed Catmull calls attention to the losses inherent in moving the design process and the production process away from one another. He uses Pixar, naturally, to make the point that there’s huge value in having both under one roof:

Will a decline in the capabilities of U.S. high tech industries make it difficult for the country to develop and manufacture emerging hot products? From my point of view, the answer is clearly yes.

Between Pixar and Disney we have used a range of production strategies that span everything from complete in-house production to work entirely farmed out, with several mixed strategies in-between. I fully understand both the economic pressures that drive people to outsource work and, of course, the aspirational desires and talent of those doing the work.

Pixar makes its computer-animated films entirely at our studio in Emeryville, California, at what I believe is the highest standard in this industry. But we believe fairly strongly that there’s creativity in every step of our process and that the integration of all those steps – having everyone integrated together and co-located – is what allows us to make exceptional movies. I don’t think we could get to that level of quality if we separated the physical making of the film from the creation of the ideas. If we did, we would not make the same film.

When companies are driven to outsource for economic reasons, there is a disconnect between the creators and makers of products. There is a further disconnect between marketing and the creators. This curious disconnect disproportionately devalues the making and manufacturing of products. I believe that a stronger connection between creators and production leads to much better products.

This also seems to extend into education where shop, art and craftsman-like programs are disappearing in favor of programs to prepare people for the ‘information age.’ Again, this devalues the breadth of activities that make for a healthy society.