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Offshoring Trends Net Biotech Firms
Makarand writes "According to this article in the San Francisco Chronicle, BioTech, once considered to be
the next innovative sector to help offset the jobs losses from IT offshoring, is
showing
signs of riding an
offshoring wave of its own. Foreign governments with a national
priority to attract biotech businesses with highly trained research workers and new
research centers are the new forces to reckon with in preventing the
exodus of biotech
jobs. Drug developers are looking at ways to cut costs of drug development as Americans and their employers are starting to constantly worry about the high price of prescription drugs. The lower costs of clinical trials and the ease with which human subjects can be recruited for drug tests in other countries are making biotech jobs susceptible to offshoring."
This has always happened. Any industry will have cheap bits that can be outsourced. It would be a negative for the US to try to hang on to the cheap bits. Tht doesn't mean more well paid high tech jobs for US citizens - it means more low paid production line jobe which will be filled, if at all, by immigrants.
Be elitist. The US can do R&D like no other. Yes, other coutries will try, and set up science parks which look just as pretty as US science parks. But it is not pretty science parks that make inventions, it is grade A researchers in an environment which stimulates innovation. Which crucuilly includes, in the US more than anywhere else, the freedom to be wrong.
Of course, yesterdays leading edge is todays mainstream. And therefore that which only the US could do yesterday, others can do today - and will, for less money. If you stop a US company outsourcing he things that can be done cheaply overseas, you will actually have a negative effect: a wholly overseas compay will outcompete them and put them nout of business.
But the US has a 100 year record of finding new things to do. In the old things, all the overseas contries are competing with each other: in the new, the US has the field to itself
Consciousness is an illusion caused by an excess of self consciousness.
Exactly, people tend to love capitalism and the market system, right up until it start working against them, even if it is only in the short term.
Besides, time and time again, history proves that growth around the world is a good thing. the more advanced these other countries get, the more markets we'll have.
I see one of the big reasons for offshoring as the current medical system. The ridiculous costs of attempting healthcare for workers is one of the costs of employing people.
Offshoring doesn't carry that burden. Health care should be 100% unrelated to employer packages
Ironic
RST
The problem is not just that this is an export of jobs for cheap labor, that is a short terms consideration. Unfortuantely in the long term this sort of thing is an export of knowledge, knowledge that we spend alot of money aquiring and that is now being pissed away by greedy corporate executives to boost profitmargins. It sucks to see valuable technology exported to keep a few greedy arseholes in silk shirts and sportscars.
Only to idiots, are orders laws.
-- Henning von Tresckow
Explain to me why drug costs are cheaper in Canada if they get their drugs from the same sources as Americans. Why do American pharmaceutical firms need to send their development offshore?
Compared to the rest of the world. In the global market it's that simple.
China and India have very well educated, very intelligent engineers, scientists, developers and they can do as good a job, cheaper.
We keep hearing the argument, "When all the jobs have been offshored, who will buy the products?". Well, duh. The Chinese and Indians will. This means BTW that they are going to be large markets.
We're going to have to start competing on price and that basically means devaluation of the currency.
Government of the people, by corporate executives, for corporate profits.
people tend to love capitalism and the market system, right up until it start working against them
And against the planet as an ecosystem, also.
At a point the richest 5% will have to realize that one cannot eat money .
history proves that growth around the world is a good thing.
Well, i would like to see these proofs. The last 50 years certainly proove that economical growth is a myth, used to masquerade destruction, misery and inequality. Argentina, anyone ?
the people receiving out-sourced jobs probably need them more than Americans
I tend to disagree with this sort of statement : is it better to take everyone deeper in the hole or should we not try to have everyone's standards go up ?
With that aggravating beauty, Lulu Walls.
How does the US prescription system work? Are doctors prescribing branded drugs over cheaper, generic drugs in order to receive funding from drug companies?
Actually, it's more the case that doctors, faced with a bewildering choice of new drugs to keep up with every single year, end up prescribing the drug that they're most familiar with. This ends up usually being the drug that they're given the most free samples of.
As far as HMOs are concerned, they have a list of drugs and their generic equivalents, and if you use the brand name, you'd better have a damn good reason for doing so.
The only people getting funding from drug companies are researchers, and clinical test sites. For regular folks (ie, doctors, interns, etc.) they get a lot of swag and free drug samples (as well as seminars, etc.), but they're not supposed to get cash.
Frankly, high drug costs (at the counter, not high development costs) leading to offshoring is a red herring. The trend toward offshoring has to do more with escaping regulatory hurdles which prevent certain types of research (stem cells, anyone?), the lousy payoff in domestic drug research, and the rise of very competitive research and testing labs overseas.
Correct me if I'm wrong, but isn't outsourcing a shining example of capitalism working exactly as it should?
Sure, so long as the government I pay with MY tax dollars does nothing whatsoever to aid the companies now operating in foreign countries, either with tax breaks, protectionism, or foreign trade treaties. Or with war, if that country decides to seize the nice, ripe foreign assets now sitting within its borders.
The way I see it, any corporation that 'off-shores' should have to take its chances with its new rulers. If the new rulers decide to do something to the company that the company doesn't like, tough fucking shit - the government that operates on MY tax dollars isn't going to get involved. If that company wanted protection, they should've stayed within the U.S., end of story.
So I don't have a problem with off-shoring, so long as the company in question doesn't benefit from a single penny of a single tax dollar I pay out during the year. And assuming that any tariffs levied against foreign products also apply to the goods manufactured by that company in foreign territory, since for all intents and purposes that company might as well be a foreign entity.
Max
My god carries a hammer. Your god died nailed to a tree. Any questions?
Not surprised at all.
Is anyone else paying attention to the fact that India and China are actually making progress moving from third-world contries to first-world contries? If we think we're just going to keep haveing all the cool jobs while they sit around and make Star Wars figures for us then we are sadly mistaken. We _will_ eventually have to share our good fortune with the rest of the world and it looks like that sharing is going to start...... now.
that once Lawyers jobs start getting outsourced, we will see changes in government priorities.
I prefer the "u" in honour as it seems to be missing these days.
But considering I work for a startup pharmaceutical company, I feel I gotta say something. Lots of people here seem to think that the HIGH costs of drugs are related to pure profit. Working as a techie in the field myself, I'm really surprised people don't know that the high costs has more to do with spending $10-20 MILLION dollars to get a drug through the FDA then it does with trying to make a profit on it.
It's no wonder people go overseas...drugs are a LOT easier to produce there..
And yes, $10 million is usually the minimum amount of money needed to get APPROVAL to get a single drug into the marketplace in the US. Anyone else knows of a better way to sell a product that costs $10 million + production costs to produce BEFORE they see a profit?
Honestly, you have better luck with a Krispy Kreme donut.....
Given that some of the best minds are overseas, isn't it a tad arrogant to view it all as 'outsourcing'? In some cases, the US is probably buying overseas expertise, which is not available in the US? Consequently, the US is benefiting and learning from India (and others), not the other way around.
No, the right question is: what jobs can't be offshored? And the answer is damned few of them -- only those that truly require a physical presence.
And guess what? Technology reduces the number of jobs that require a physical presence. You think the fact that offshoring is happening right now is an accident? No, it's because we now have the communications technology to make it practical.
So the only question left is what all the extra competition is going to do. I think it's going to destroy the global economy, as corporations take the extra profit and distribute it to those who already have the most money: executive staff, board members, and investors.
In short, I think this will destroy what little middle class the world has left, and put us squarely back in the middle ages when people were either insanely rich or dirt poor.
In fact, because offshoring forces entire economies to compete with each other with the price of labor, and thus the standard of living, being the only variable, I think we'll start to see some countries start to use prison labor to compete. That'll definitely take us back to the dark ages.
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The last 50 years certainly proove that economical growth is a myth
If anything the last 50 years have proven that the following tools do not work in capitalism (and rightfully so!):
* Currency manipulation
* Massive overregulation
* Corruption
* Political instability / oppression
* Monopolies
Argentina was a posterboy for at least three of the four above. Argentina experienced MASSIVE RESESION.
is it better to take everyone deeper in the hole or should we not try to have everyone's standards go up ?
It is better to pull standards up. From my American perspective, that is what is going on. The US standard of living has not changed on the average and the standard of living in countries experiencing growth will go up.
-- $G
Actually, if these are US/EU based companies, it does surprise me. I work for a large CRO (Contract Research Organization) and meeting compliance with the FDA on 21 CFR Part 11 is grueling. If these are US based companies, they will be held to these same standards. I know that EU and Japan have very similar requirements for this kind of research. However, if these are completely off-shore, how much longer will it take these BioTechs to actually get their products thru the FDA and similar agencies??
History has proven that having a strong middle class is a good thing.
I am not convinced that moving jobs to the country where workers can be most easily exploited helps creating a strong middle class anywhere. I wouldn't be surprised at all if globalisation, the way it is done today, only serves to increase the difference between the rich and the poor.
Just as an aside, who is off worse? The jobless former car industry worker in the US, or the guy in some third world country who's assembling the cars now, at way under minimum wage, without basic safety equipment, health coverage or a retirement plan?
The thing that made the US and European economies so rich is the big middle class, normal families earning a decent amount of money and SPENDING IT. If offshoring manages to make that go away, it won't be good for the economy anywhere...
Ok which is worse - A US worker losses his job, goes on unemployment and has to depend on his wife's inadaquate job to try to make ends meet. Perhaps now he can't send his kids to college. They either pay their own way or get a job.
Or B, the US worker keeps his job and is happy. Meanwhile, instead of having a job at below the ->US- minimum wage building cars, a man in the third world has to depend on his children and wife working or begging in order to avoid going hungry. His children don't recieve an education to speak of, let alone thinking of college. Without an education, his children will never be "middle class".
Indian and Chinese programmers or auto workers who make far far less money than their US counter-parts are part of a growing middle class in their socities. Other factory workers have made the move from desperately poor to merely poor. A reason their salaries can be so low is that the rest of the labor in their countries is so cheap that they can live quite well on a relatively small amount of money - I'm thinking programmers here not textile workers.
Ah, but you saw that there is still rampant child labor that is offensive. 10 year-old girls working 12 hour days instead of going to school. Is that ideal? No. Is it better than them being sold in slavery / prostituation at the age of 13? You bet.
Is the US going to have a huge amount of competition in nearly every industry? Yes we are. We're disadvanteged because we're so rich that it costs a lot to pay an American to do something. We've got the advantage in that a huge percentage of our people are college educated and we have a very very extensive university system that attracts some of the best minds from across the world. That our labor practices are barbaric by European standards gives us an advatage over them as capital spent here is at less risk. It helps to be able to fire people and ask them to work long days in a pinch.
I agree that a vibrant middle class is the key to success. I'm also nervous that offshoring competition creates a race to the bottom in labor standards. At the same time, Europe has been able to survive competition with the US for quite some time - albiet with 10% unemployment. If the US continues to work its ass off it'll be fine. But we'll need continued government investment in the right places to make that happen.
Actually, it's the exactly other way around. What created a middle class was having a surplus of goods for that middle class to buy. If you tried creating a middle class during, say, the middle ages, the surplus that the middle class could buy would have just made everyone else starve.
Money isn't the alpha and omega. In the global scheme of things, it's just a means in the circulation of products and resources. No more, no less. What counts is how much stuff can your population buy, not how money do they earn.
Don't believe me? Some of the communist regimes tried fixing prices without regards to the salaries and production capacity. The only thing that resulted was a shortage of goods. There just was less stuff on the market than the people had money for.
So pay attention: it doesn't matter how much money your population earns, it matters how much goods can you sell them. That's all. The prices-to-salaries ratios will automatically adjust based on that.
And I fail to see how a worldwide increase in goods production is a bad thing. On the whole, the number of tons of consumer goods produced worldwide is raising. Someone has to buy those. Salaries will increase or prices will drop, but either way, someone will afford to buy more stuff out of their salary.
Why is that a bad thing?
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