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What Should a Documentary Filmmaker Ask About Offshoring?
Philadelphia-area development economics and finance student Rachel Anderika and her associate, programmer/filmmaker Krishnan, are making a documentary about the effects of offshore outsourcing. Their "still under construction" Web site, Project Outsourced, gives you more information about their work. They're interviewing economists, bankers, anti-outsourcing advocacy groups, pro-outsourcing CEOs, columnists, and others. Where you come in is helping Rachel and Krishnan come up with good questions to ask. We'll forward 10 - 15 of the highest-moderated ones posted here (within the next 24 hours) to them. Expect summaries (and possibly audio or video clips) of the answers in late May, and news about the finished film this Fall.
The one question I have never been able to get a straight answer on. What field should the millions of displaced American IT workers get trained in?
It is always sais that people should be responsbile and learn new skills and train in a new field. When the farm economy shifted to manufacturing, people learned factory work. When manufacturing started to be offshored people were advised to get into IT. What field should people start to train in? Bush talks about training displaced workers, but I haven't heard anything about what their supposed to train in. What is the next new economy, retail?
Very simply, do overseas workers cause more problems than they create? When it comes to programming, coordinating projects between two centers in different facilities in a single country is hard enough. Adding culture and language differences to the mix while not being able to have direct and on-site meetings to architect a complex program, is that a recipe for disaster? With overseas call centers, do you keep enough future customers due to deficiencies in customer support to make it financially viable to continue offshoring support? How do you cooordinate high-level management objectives with an office across the world?
(but who cares)
.. has the standard of living, for those working for American companies, increased at all? Or are the jobs just barely paying the bills like any other job might?
My question is
On last night's show - 60 MINUTES claimed that India has the highest percentage of AIDS cases in the world, overtaking Africa.
What I would like included in such a documentary is what the effect of outsourcing to India has on the effect of "bringing diseases back home"?
It seems a lot of executives in India are starting to get infected - so in turn wouldn't those executives and "American workers" that may travel there have a higher susceptability to contracting the AIDs virus?
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
Is outsourcing seen in the public eye as helping or destroying an economy? I mean, on the one hand, we're loosing jobs locally, but on the other hand it's creating thousands of jobs in 3rd world countries. I heard someone say before every one job here is worth three jobs offshore, for the same amount of money. I guess the question is, are companies benefiting by getting more bang for the buck out of employees helping the economy locally, if not the job market, while at the same time helping the economies of other countries by creating jobs? A penny saved is a penny earned, potentially spent locally.
Our government positions outsourced to other countries, yet the CDC has a policy of buying airline tickets from US companies over foreign airlines.
Our foreign aid also favors purchasing from US companies abroad over local companies. (Who are we really aiding?)
How does your documentary view the hypocricy of outsourcing when it appears to favor US companies, not US employees?
What effect do you feel the outsourcing of professional jobs has on the economy? When manufacturing moves offshore, it's easy to say we'll all be employed with "knowledge jobs", but what happens when the knowledge jobs move offshore? Doesn't this equate to leaving our own highly skilled individuals unemployed/underemployed while we're pumping money into a foriegn economy via payroll? If we oursource our professional jobs, where will stateside consumers get the money to purchase the (now cheaper?) products? Is a "service only" economic model sustainable for the United States?
What are the positive and negative effects on the offshore locations?
Are these positive and negative effects distributing themselves evenly through these societies, or is it effecting and effected by existing class and social structures?
There are no trails. There are no trees out here.
I'd like to know how the executives of these outsourcing companies feel about the level of customer service, and how the quality of these services is going down due to language barriers, and lack of knowledge. David James
- What effect has losing a job to out-sourcing had on you personally, including all aspects -- mental, physical, financially, etc. (This one obviously needs to be asked to someone (or many someones) who have lost a job because it got outsourced.
- Who is supposed to pay for tech workers retraining themselves in new fields? I see so many companies/organizations saying that US tech workers even enjoy retraining for new fields, but they never mention how a newly unemployed (thanks to outsourcing) person is supposed to PAY for that retraining.
Personally I would LOVE to see the people who go on about US tech workers just need to retrain for a new field asked #2. I doubt you'll find many (if any) that will answer on the record though.To the CEOs of the outsourcing companies:
Is the outsourcing really cheaper when the total costs are figured, or is this move a way to show shareholders that you're doing some cutting in the down economy?
Hot Damn! It's the Soggy Bottom Boys!
My question is:
How do you think the rising salaries in India are going to affect the current outsourcing trend?
In Soviet Russia, I ruled you
Ok, so lets say I have a piece of software on the computer sitting under my desk that automagically writes programs. I write detailed design specs, then run a shell script, say ./program.sh . A week or two later, I have a written program. Would anybody object to the creation of such a program? No, of course not.
But if, instead of DELL writing programs, it's 5 guys in Bangalore, and my computer simply acts as a communications point, then suddenly we're getting out the pitchforks and torches? Why the difference? I ask my Economics classes this every course, and I've yet to hear a reasonable answer...it all comes back to "but those are PEOPLE", as if them being Intels, or AMDs, or chickens would make it more acceptable.
Remember the scare about robots in the 1980's? Remember the chicken littles running around warning of the disappearance of jobs in America, as we were all replaced by robots? It's happening again.
PC.
Considering this, can the short-term financial gains really offset the long-term benefits a loyal and motivated workforce provide?
A large portion of the cars made at the Honda plants in the USA are made for the US Market. Also, it is/was due to Reagans tarrifs that they located here in the first place.
There is a difference between having a factory in an other country to serve that country and exporting most/all of that factories output to the USA.
Hell, it can't continue much longer due to how our income tax system is setup. If you make less than a certin amount you pay NO income tax, and most of the new 'service' jobs pay less than that amount.
What impact does outsourcing higher paying jobs to a poor country have on that country's economy? For instance when Dell sent support jobs to india, they were paying those support people many many times what most indians make, paying them with money from selling a product most indians could never afford. I would imagine that those with the outsourced jobs would be consuming a lot more than normal, which would drive up prices for things like housing, transportation, and cloths. These higher prices would negatively impact the average person trying to purchase those things, meaning that the average indian is worse off for having these higher paying jobs in their country.
The question I would like most answered is this:
Yes, IT jobs seem to be outsourced to foriegn countries, but specifically what sectors of IT, and for what purpose? Not for what gain, as that is fairly obvious - saving money - but what is the function that these outsourced jobs fill? For call centers, this is fairly obvious, but what about for programming? What kind of programming is being done off-shore? What kind of programming cannot for saftey reasons, intellectual property reasons and other reasons be moved out of the US?
Similarly for other sectors of the IT field - what are the limits, and why?
The Walmart example, OTOH, is very appropriate. You sacrifice your self respect to shop there. Of course, since the owners and management have already sold thier sould to the devil, it matters little.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
I am concerned about the off handed, racist remarks I have seen and heard. I would like to see that touched upon. Also, the connection between insurance companies and other investors with grotesquely large amounts of money, investing their funds in businesses thus forcing them to work towards the bottom line and going with the cheapest solution.
I'm on record for saying that working 100, 80, even 60 hours per week regularly is dysfunctional and counterproductive. There are other management fads that are likewise dysfunctional and counterproductive.
To what extent is outsourcing being driven by staff resistance to management demands? What kinds of demands are being resisted?
This question can be put to both the pro and anti sides.
"Beer is proof God loves us and wants us to be happy." -- B. Franklin
I recently had the task of setting up a printer to work with Quark Xpress. They offer no free support. My employer paid the support cost, and I was put on the phone with a man with a thick Indian accent. It was so bad that I had to ask him to repeat himself at least once every time he spoke. I guess my argument is that people hired to interface with other people should be able to communicate well. It was such a pain in the ass to translate his accent that I decided I would avoid purchasing Quark or recomending Quark (ignoring that some alternatives may be better products). I've heard that Dell computers heard similar complaints to the ones I am making, and brought their tech support back.
I guess my question is: Is it worth the savings to piss your customers off, esp. when they are paying top dollar for good tech support on a per-call basis? On another front, Have these companies had good results overcoming the language barriar (that, according to a programmer friend of mine, ends up causing more problems for a project, resulting in more time cleaning up the mess that misunderstanding brings than executing the project)?
Apparently rates in India are going up with demand, which is entirely logical from a market perspective.
If instead of reducing outsourcing we tried to send more work to India, is it conceivable that we could bring up their salaries to a point where they would no longer compete on price?
Also, can we expect some of those Indian programmers and companies to do more work on fulfilling their own software needs, and stop chasing outsourcing work?
Information: "I want to be anthropomorphized"
I also like the fact that you don't claim to have all the answers in advance. So many reporters and filmakers are too arrogant to ask for assistance. A truly awesome idea to ask everyone you can about this before filming. Nothing pisses me off more than some 60 Minutes piece that (invariably) fails to interview the other side.
Agenda-based "reporters" rarely find the truth. You might find that outsourcing is terrible, but you appear to be objective and thorough, i.e., the opposite of Michael Moore.
My golden question: Ask the labor unions to explain how they can reconcile their push for high wages and benefits which are completely non-competitive with foreign workers, and then have the audacity to complain about outsourcing, rather than take some of the blame (how's that for a leading question?).
I'd also ask the managers of large pension and mutual funds how outsourcing affects their stockholders, and ask them to describe who, exactly, those stockholders are. The answer might surprise most people.
Good luck!
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Something I've been curious about...
I've read in stories about call centers / tech support outsourced to other countries that the employees are often coached on how to pass as Americans.
They work on their accents to appear more American, learn about American sports teams and pop culture in order to be able to make smalltalk about it and appear authentically American, etc.
I'm curious to know the effects this has locally and what the opinions of it are. Do any of the employees have problems with this deceptive practice? Do they feel that it's making some kind of statement about the (theoretical) superiority of American culture that they're forced to learn about it and utilize their knowledge of it instead of that of the culture they grew up with? Are there ever, for example, new baseball fans created by an offshore call center worker's exposure to the sport for his/her job, or is this almost always purely business for them? Does this happen in other industries? Do more traditional members of the local societies object to the poisoning of their children with this American culture?
I think there are a lot of interesting questions to be asked there. It's not involved in any way with the causes or primary effects of outsourcing, but from the perspective of social psychology alone the answers should be fascinating.
If someone ever wondered WHY companies outsource, look no further: http://www.marxists.org/glossary/terms/f/a.htm#fal ling-rate-profit
Quite simple actually.
- What is the exact nature of the competitive pressure compelling CEOs to outsource labor?
- (Everyone else is doing it.)
- So these other companies that "did it first" and thereby decreased their costs, passed this on to the consumer in the form of reduced prices?
- (That's how the market works.)
- Uh, huh. Ok, given that the inflation rate has remained pretty much constant, if not growing slightly, during this period of outsourcing, is it fair to say that the trend of outsourcing is, in fact, not driven by market forces?
- (Well, uh, the market is very complex...)
- If a group of companies collectively decide to engage in behavior to the detriment of their consumers (prices haven't dropped) and employees (who are out of work), and this behavior is not market driven, can you explain it in the context of antitrust law?
No further questions, your honor.who are those slashdot people? they swept over like Mongol-Tartars.
There are a number of perspectives anyone can take on all of this, some purely economic, more purely political and all sorts of odd mixtures.
The one I'm most interested in is this: what obligation does the government have to its citizens? Should it do whatever it can to facilitate profits for businesses? Should it do whatever it can to maintain/attain a high standard of living for all its citizens. Most communities form out of self-interest. They gain more by being together than apart, and often hard compromises are necessary where individuals must give up something for the common good that they've agreed to support. My feeling is that citizens, government and business have all lost any sense of this commonality of interest. So the first question I would ask is: who gains by offshoring and is that gain for the common good or for a specialized good. My feeling is that it's really for a specialized good, large corporations, but I may be wrong. But I do think this is the most important question to ask.
I would like to know why when employees put 10+ years into a company, and through those employees efforts and creativity the company has prospered, that the company feels no debt to them? And does a company feel like it can despose of them like yesterdays garbage so that the CEO can get a big fat salary?
Where does outsourcing stop? You can basiclly outsource pretty much every aspect of any company to a comparable cheaper solution overseas. However, where are the lines drawn? What is the criteria? Does cheaper automatically call for outsourcing. Is there a formula to this?
PS: I know this is not one question, but they all closely related.
Useless sig.
Clearly, the company that outsources employment is still hiring human beings and paying them a wage that they are able to subsist on. Otherwise it simply wouldn't work, even to the degree that it arguably does (yes, I know it doesn't work for some companies - face it, for others it does).
So, what exactly is the objection? All kinds of rationalizations are offered, but they all boil down to a belief that some people deserve jobs more than others.
Are the people who insist that they deserve the jobs (instead of some jobless brown-skinned foreigner they don't even know) racists, or nationalists? Why do they consider themselves "better" or "more deserving" than other workers? Is it because they were born in the place the company was formed? Is it because they are the same racial group as the CEO?
I'd like to see the documentary makers explore the overlap between racist extremist viewpoints, fanatic "my-country-wrong-or-right" patriotism, and opposition to outsourcing. I bet it's pretty huge.
I expect to be modded into oblivion for challenging the dominant viewpoint. So be it, I'm looking for a different kind of karma points myself.
There's a simpler question: Once you outsource and offshore the bejeezus out of your company, who do you expect your customers to be?
[You have a stable society when some nut guns down a schoolyard and the law doesn't change.]
1. Euros and Canucks get paid less than Americans do. And once the Rich get the clue, they'll move that capital to India and China, too.
2. Most of the poor don't suck at anything. But concentration of property rights and social contacts creates a higher hurdle for attaining wealth than many of the current wealthy families had.
3. Capitalism is good when it is regulated. Unfettered capitalism is like a car with a turbocharger, no brakes, and an eternal downhill slope. It tears itself to pieces every so often.
4. If we exile all the rich people but impound their wealth first and give it to a new class of people who HAVE A CLUE about the real value of capitalism, then our problem is solved. People absolutely are poor because rich people are exploiting them. Ask any corporate executive if he likes unions, and why. And don't take any emotional nonsense about "socialism"; ask about what would happen to his share of the revenue stream if the unions were busted.
While the cause and effect are being hotly debated, my question is: "What are the limits of offshoring?"
Is it acceptable to allow external development of national defense software? What about storing and evaluating patient medical information (CT and MRI scans)? What if all networking software, virus detection and operating systems came from overseas. Would/could you trust it?
Foreign governments do not (in fact, should not be expected to) necessarily share US political, societal or economic interests. Too much offshoring can weaken the US software development market measurably. How long would it take to recreate that market in the setting of global conflict? Is the maintainance of a strong software community a matter of national security?
Any sleight-of-hand, sufficiently advanced, is indistinguishable from technology.
I've heard MBA students spouting something about how all the "work" will be outsourced and people in the US will just "manage" everything. I fail to see how this is a viable model for a country. The foreigners will learn management too, and then those US managers that don't know anything about day to day operations in Singapore will be next to go. How can anyone claim a nation of upper managers is viable with a straight face?
I've looked at the exchange rate for the Chinese Yuan over the last 6 years and found it to be FLAT (not a single dollar/dime difference) with exception of a handfull of spikes, only to return to the Flatline exchange rate again. There are several sides to this one question:
1) If the exchange rate is FLAT, would you consider offshoring?
2) If the exchange rate was volatile such that your contract price were unreliable by 10%, would you still offshore? - or was this even discussed?
3) Does political instability have an affect on the exchange rate, and does this factor in your decision?
They should comment on the so called "cost of living advantage:"
Q1: If the severe oppression underlying working conditions for the vast majority of Indians was removed, would outsourcing of "high-end" jobs to India cease to be profitable?
Q2: How does the current practice of outsourcing of "high-end" jobs to India help Indians in the ongoing struggle to remove the severe oppression there?
Examples of oppression and their supporting infrastructure:
1) Forced and *uncompensated* displacement of people from rural areas into the cities because of emminent domain siezure by authorities. (Official Indian government figures put the number of people affected by this at around 40Million since 1947. Activists estimate the number is much much higher.)
2) Ubiquitious child labor in the houshold cleaning, and other related service sectors. No real enforcement against it.
3) Child slavery and bonded labor (think "indentured servitude" from your history classes, but much worse.) affecting millions in rural areas. Sporadic enforcement against it.
4) Open physical and verbal brutality of authorities (police, guards, and even employers) towards the poor to keep them obedient and compliant. Personal Note: once on a trip to India, I saw a policeman beat a little beggar kid about 3 hours after my plane touched down. I see examples of stuff like this on every trip to India. I have even heard many well-to-do folks talk openly about how "this is all those kind of people can understand."
5) Right to education for everyone exists on paper only. Many areas have no functioning public school or that school has been "captured" by a subsection of the community with others excluded by overt and implicit discrimination.
6) No democracy within political parties. The voter has no say as to whom will run for a seat on behalf of any given party. (e.g. No caucuses or primaries of any kind.) Rules *preventing* elected members of parliament from voting their conscience on issues affecting their locality.
7) No freedom of information act or sunshine laws. (Even Ashcroft has to obey at least some FOI requests.) Example of a resulting state secret: How much money was spent on the goverment support of parochial (Christian and Muslim) schools as compared to the money spent on public schools open to all?
8) No right to a speedy trial by a jury of peers. Say what you will about the OJ case, etc., participation in jury trials is a powerful way in which the public gets some control over their own destiny by being a part of the justice system. It is a lot harder to corrupt 12 randomly chosen jurors with other jobs than it is to get at one judge who you can count on for repeat business.
Which is why we should tariff the import of intellectual property. /. will have to pay to host my comments submitted from the UK?
Does this mean
Hollywood has been outsourcing for years. Examples include The Lord of the Rings triology (almost entirely outsourced to New Zealand), and dozens of films where the city of Vancouver, British Columbia is passed off as various cities in the United States, all to avoid labor costs and union scale issues. For whatever reason, the entertainment industry seems immune from the big media "outsourcing" scrutiny placed on so many other industries. C-Diddy
"Me fail English? That's unpossible." - Ralph
What's wrong with free markets?
Anyway that really wasn't your point here. If people can't patent things (like AIDS medication) they will not invent it because they will never recoup their R&D costs if it is to be just given away or "legally pirated". Music and drugs are entirely different...
Any two bit idiot can't play music and the cost of creating and producing it is nowhere near to the costs of researing and producing a drug. For every drug that comes to market there are about 10 that do not. The drug companies have to make back their money somehow. Now, that said, sure they may be gouging us in some respects, but still things can not, will not and should not be free. History has proved this economic model fallacious.
-Craig.
I'd ask political economists whether the improved overall market efficiencies associated with free and unrestrained trade will automatically
Whether there are indications of what degree of wealth segregation might be associated with violent upheaval in regimes (China) that do not allow for easy change.
Whether democracies or republics can be counted on to provide peaceful transitions when such imbalances become too extreme.
Whether democracies can be counted upon to elect efficient economic models, or whether democracies will tend to choose inefficient economic models that are "popular".
[Empirical evidence of failed regimes would illuminating.]
"Provided by the management for your protection."
But those things aside, basically every light switch and other electrical part in an American car is made in Japan, and it's usually a commodity part too, it's not even specific to the US cars. Hell even Dunlop is owned by a Japanese tire maker (Sumitomo I believe.)
So given that even American cars are made of Japanese parts, but the only American involvement in Japanese cars is that they buy our recycled steel for pennies per ton, how is "buy american" even relevant any more? Especially with american automakers picking up big stakes in the Japanese ones, making it further irrelevant?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I'd like to see some honest discussion of the deeper problem, which is that corporations are artificial constructs that operate outside the control of individual nations or investors/board members, and do not have as their goal the betterment of society or the individual. Rather they exist specifically to concentrate as much wealth as possible in the hands of as few people as possible. It's therefore not surprising that these creations move labor to where the cost is lower.
Also, it's inarguable, if not well-known, that neoclassical economics is fatally flawed and does not apply to the current world economy. So most of the pundits and economists arguing about how great NAFTA etc. are for everyone have no idea what they are talking about, despite their training. Neoclassical economics is based on many false assumptions, and "proofs" of the benefits of unbridled international capitalism are therefore wrong. Letting corporations do whatever they want is just as bad as letting the pre-breakup Soviet government do whatever it wanted.
For that matter, I'm curious: Why are people so deeply distrustful of "big government", but willing to accept an unlimited amount of abuse from private industry? It's just the same problem with a different name.
Cheers,
freecell_wizard
I am curious if, for instance, Indian people who work for an American (or other country) corporation are concerned that as their wages increase their jobs will be moved to another country with even cheaper wages.
It seems that a vast majority of American corporations that outsource their IT work send it to India. Lately there appears to be a shift to the Philippines, especially for help desk related positions. Do Indian employees share the same fears some Americans do that there jobs too will be sent overseas to another country?
A common retort by "them" when faced with the reality that offshoring causes the US to lose jobs overseas, is that jobs are created in the US to support and/or augment those jobs that went overseas.
I call BS on that, and here is the question to ask if someone trys to use that line on you:
"What jobs, specifically, are created by sending other jobs overseas? Wouldn't those jobs have to exist anyway, if the parent job in question were not sent overseas?"
And finally, lets get some specifics here. Those that try to rebut the facts of offshoring never speak in specifics. Here is a specific for you:
At my company, about 50 helpdesk style jobs, level 1 class, were sent to Hydrabad India. How do those jobs leaving create jobs here? Level 2 does exist here, but if the level 1 jobs were here, you know what? The level 2 would still have to be here.
Here is another question:
"Why isn't it illegal to import people from India on 12 month visa to fill positions that get 400-500 resumes from local people, when they are posted according to US law? You cannot tell me that there isn't qualified NT admins in ANY local area, and yet these positions have imported labor."
And here is another specific:
My company has over 150 imported Indians that fill all sorts of mundane IT jobs. After 12 months, they go away and are replaced by another cog in the offshoring machine. How is this creating jobs here? The managers/architects that supervise these people? Guess what, the supervisors/architects would have to exist anyway if Americans had these jobs.
And that is the part that seems totally illegal... importing people on visa to fill positions so the company doesn't have to pay local pay. Offshoring is one thing, but seemingly breaking the spirit of the visa rules for techincal people to fill positions that local people would LOVE to have. I know so many out of work, or working other random jobs they COULD get, that are more than qualified.
And this is the largest company in the world I am talking about here, not some fly-by-night gig.
I have been reading for several years now that the middle class has been flat in pay and job growth since the 70's. Not only that but the low-end middle has even seen negative numbers. If my history is correct this coincides with the beginning of significant outsourcing by industry. Does this correlate? And if it does does that mean that the middle class and lower economic folk in America can look forward to another 30 years of the rich getting richer and the poor getting poorer?
It is never a good thing for any country to lose its middle class.
1. If outsourcing from California to India is "greedy" or otherwise morally wrong in some way, then what about outsourcing from California to, say, Alabama?
2. Do people in India or China have less right to make a living and feed their families than Americans do?
3. In a business, does management have a duty to artificially maintain relatively high wages in the US for equivalent work? Is that a higher duty than their duty to the shareholders?
4. What duty do the workers owe management in return?
5. Would you support relaxed regulations and tax cuts to help bring the cost of US labor down closer to that of foreign labor?
6. Which world leader is more just: George Bush or Fidel Castro. (This is just to determine who you're talking to.)
Why are call center workers who handle the private information of US citizens (banks, credit cards, etc) in foreign countries trained to sound like Americans? If outsourcing is so great, why are foreign workers forced to pretend that they are American?
Why are US workers forced to train their replacements, all the while being told that their job is being eliminated because it's the only way for the company to remain profitable?
Is it moral to outsource government services such as upgrading the system that provides aid to unemployed workers or customer service to food stamp receipients to workers who make one fourth of what an American worker would make?
Why are groups that are obviously lobbying groups for corporate interests being allowed to dictate our nation's policy on everything IT?
What effect does outsourcing have on innovation? The skilled workers in the US are not allowed to compete for jobs because American workers are too costly. The marginally skilled workers in countries where costs are lower are making the same types of technical mistakes that US workers made years ago. If outsourcing had been done for reasons other than pure price, would technology be on a different level now?
Why isn't the connection between the misuse of H1B and L1 visas and business access to cheap labor in other countries ever discussed?
Some things I'd like to see investigated (I wouldn't expect straight answers to these questions):
1. The usual reason given for outsourcing is that it's cheaper. What about other reasons? Freedom from Government regulation? Freedom from stockholder/top management oversight? Financial shennagians?
2. In the manufacturing world, we've seen outsourcing start with assembly-line work and end up with essentially the entire operation overseas. (Think of home entertainment.) How high up the corporate ladder will the current outsourcing trend go? Could you, for example, run an entire bank branch (not just tellers) from India? Newspaper back office? Stock brokerage? Law office?
3. What is happening to the Indian outsourcing firms as even cheaper countries (Russia, Ukraine) get into the act?
4. Freedom from Government interference is one advantage given for outsourcing. What about the downside? Organized crime? Political corruption/extortion? (How do you *know* that your shiny new system doesn't have a backdoor, now that you've fired all the engineers?)
Welcome to the Turing Tarpit, where everything is possible but nothing interesting is easy.
Ok... So we are in a transition period. NAFTA / Outsourcing is the wave of the future. But is any CEO or Economist looking at the long term?
Outsourcing makes sense in the short-term 3-5 years. But what about the long term? After the transition?
If you outsource manufacturing and assembly don't you cut out a potential resource? New talent? If someone doesn't have the hard knocks of manufacturing or assembling without an International Airline ticket and a stipend what will happen to *OUR* innovation?
I never hear an innovator say "Thanks to my Harvard Degree I was able to design the new next clothing fad." I tend to hear of someone who worked hands on then found a niche that wasn't being covered and they went for it. If you outsource the lower industries you outsource our innovation. Does this concern anyone else but me? And if so, what is the answer? Strictly for American Defense do you want all of our clothes manufacturing being handled outside of the United States? Would that be our new ration item if we were forced to go to war?
I'm for the long term. But I'd like to know what strategically American Business Leaders want that to be. Right now all I see is a bleeding out of our dollars to other countries with economists worried about deflation. And personally I don't think Business Leaders are knowledgeable or equipped, this is where government should step in and slow the transition for our own stability.
I've asked alot of questions for thought fodder but this is my A#1.
What would 5 conceptual business be in 20 years, and what are supposed to do to get there?
Myself, I think technical communes or cooperatives are the answer but... Right now I only see my class being asked to do the cooperating while the upper 10% are whooping it up overseas. I spent 15 years of my professional life climbing the ladder while working under executives that never understood how to turn on their computer. Now that I have the skills they've outsourced overseas.
I never got my invite to the Hilton B-Day party, did you? Perhaps a cookout hosted by HP and Carly? Naw, she was so vindictive about HP Site Boise not being a cheerleader squad in her battle with HP's Heirs that she's cutting Boise (and other domestic sites I'm sure) whenever she can.
I don't like revolution, but I get the impression the upper CEO's are dolling out the economic equivalent of let them eat cake... More accurately, buy my stuff at inflated stupid rates... Please tell me what I'm not seeing!!!!
"Don't fear death... fear not living..." -me
When toxic computer components are exported and dumped in third world countries, do you protest "American computers" being sent abroad? Firecrackers are produced by 4-10 year old kids in India under horrible conditions. Do you protest the offshoring of the manufacturing of these "American firecrackers"?
Yet when it comes to IT (and previously electronics), these jobs are "American". The comfy, well paying ones. Your God given right.
Free markets work both ways. Regardless of whether the global market is really free, whatever America gets, you're only getting what you asked for.
The "Project Outsourced" people should also try and see if they can find anyone to offer arguments like this,
Answers on Outsourcing - A finance professor argues against placing blind faith in outsourcing.
which has some very clear and understandable arguments against outsourcing.
The parent of this post has no idea what is going on or how the decision to build a WalMart is made or its effects on the community
WalMart does not build any stores. They get the local government through an Industrial development board to build the store. If the location lacks profits they simply move on leaving the store and its debt to the community. If the store makes a profit, the WalMart organization absorbs it.
WalMart gets this amazing deal because it promices increased tax receipts to the community. Usually the store is built with a Urban Development Action Grant (UDAG) which makes any rent coming back to the community for the store be a "repayment" of the grant that the Federal HUD supplied. In short the level of corruption here is very deep. The city gets money it never had. The WalMart gets a store it did not buy at rents well below any market rates and at no risk.
In this store even the machinery and shelving are purchaced under the IDB. This makes the interest on the money be very low and makes the purchace of the items be Sales Tax exempt.
So Walmart gets a store for free and you wonder why the Mom and Pop stores are dying out when they pay the taxes to support this? Free Enterprise it isn't. It is Faschism! Supporting this as Libertarian or such is pure ignorance. Walmart is using the power of the state to crush the ordinary businessman who has to pay his bills and taxes. This is not CONSUMER CHOICE! It is political choice.
The issue goes even further when you realize that Walmart extorts it's suppliers into stocking the store as "Vendors" so that they make a profit without even having to buy the inventory. They make about 5% a turn and do it 80 times a year. If Mom and Pop could get their inventory this way they might just match or beat Walmart but well lets just say they are too busy paying taxes that Walmart is not.
Walmart sets up offshore supply mechanisms to export the 400%+ ROI they are getting on somebody elses money so that under "Repatraition" under NAFTA and GATT they avoid even the Income Taxes on this massive income. They also avoid having to pay their stockholders any significant fraction of these earnings. They can set their profits at any level they want to fit the market because their real earnings for the family are many times that of what is publically reported.
This was what was at issue in Califoria recently when some people there actually said NO!
Never Politically Correct ~ I prefer the facts If you don't like what I say, get a life, or comment yourself.
I would start this documentary with clips from President Carter's vision of the future proclaiming all factory workers will change skills to become information workers. Did the government fail to support this transition and keep us dominant in this arena? Close this segment with a list of govt. agencies outsourcing their IT needs.
...or do we expect the govt. to solve this problem for us?
Next, I would focus on the true costs of outsourcing options. A number of talented people would love to work in an area where the cost of living could shrink the pay/benefits gap. Has anyone tried this method?
What have other countries done to protect their industry and are we doing the same things?
Now, the toughest question - what will people do to help their own economy?