This isn't going to kill the design market any more than off-shoring is
going to kill the need for developers. But it is going to require designers
to up their game as the transactional stuff moves offshore. Need a quick
logo for a new business? 99Designs is the answer. Need a WordPress.com
blog set up? eLance.com might be the answer.

But much of design and coding is iterative, ongoing, and requires a deep
discovery process. That's VERY hard to offshore.

This isn't going to kill the design market any more than off-shoring is
going to kill the need for developers. But it is going to require designers
to up their game as the transactional stuff moves offshore. Need a quick
logo for a new business? 99Designs is the answer. Need a WordPress.com
blog set up? eLance.com might be the answer.

But much of design and coding is iterative, ongoing, and requires a deep
discovery process. That's VERY hard to offshore.

I couldn’t have said it better myself. However, I would add that the design market is growing in sophistication and there is growth at the middle and the top end. Designers, especially in the US, need to elevate their game and clearly demonstrate value in order to justify the higher cost.

UI/UX design is a great example of design that is not particularly transactional, is in great demand and ultimately for the savvy businesses that are seriously thinking about it – is worth the spend.

Cheers,
Jason
99designs.com

Plenty of other businesses operate on business models where they do a bunch of work and only get paid some of the time. I don't understand the mentality of exceptionalism held by designers that makes them think they're different.

The bottom line is that the difference between a business owner and an employee is that the employee gets paid no matter what, while the owner risks doing a bunch of work and not getting paid. Freelance designers, who are basically business owners, insisting on getting paid no matter what want to have their cake and eat it too.

(big fan of Behance, by the way!)

I'd be interested to know if you think a logo design contest with a $100k
prize would be “exploitive”. If not, then I think we need to look at the
economics for the people who are participating here (which I'm guessing are
aspiring designers and low-end designers in places where a $500 bounty is a
ton of money). To me, whether it's spending $10,000 of worth of time and
money whipping up a great proposal for a shot at a huge project or spending
2 hours tossing a logo together for a $500 contest, the ethics of it come
down the the risk/reward. Are design contests imposing too much painful
risk on a population of people who have no choice but to endure it? I just
don't think that's the case outside of the (very rich) western countries.

Regardless, I've only met happy customers who've used 99Designs for
“transactional” work (like logos or small, discrete projects). And clearly
they have a steadily growing base of participating designers. When you have
satisfied workers and happy customers, the genie isn't going back into the
bottle. It's sad for the US, but a big win for the rest of the world and
(of course) the people who need to buy transactional stuff like this and are
on a tight budget. I think the place where pro designers can offer the most
value (broader campaigns, rich/full identity packages, and of course
interactive stuff) will probably be relatively unscathed.

Tony Wright, founder of http://rescuetime.com

http://blog.rescuetime.com (company blog)
http://tonywright.com (personal blog)

By the way, there was definitely outrage in the old-guard photography industry around iStock and the bunch.