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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."
Is anyone else not surprised at all?
Businesses outsource, even tech ones, even biotech ones now.
Shocking.
Oh, and f1r57 p057!
But do they ever stop to think that these people may be the best suited to the job?
The point is they do the work for cheaper than most would, and you'll find the majority do it just as well as a local. I guess we wouldn't have this problem though if our culture wasn't so based around the evil that is money.
Correct me if I'm wrong, but isn't outsourcing a shining example of capitalism working exactly as it should? People always get so bent out of shape about it, but fundamentally it's rewarding the people/countries who are willing and able to do the same work for less. If you look at the unequal distribution of wealth as a problem (which I do), then the good news is that poor countries will get richer, as will the uber-rich that now have to pay their workforce less. The bad news is for the middle class. American left-wingers would do well to remember that the people receiving out-sourced jobs probably need them more than Americans. And American right-wingers would do well to remember that unless they're very rich, they're likely getting shafted.
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.
Does anybody else finds this... well... horrible and sinister? So, just because consumers want a modicum of security -- and security means more expenses -- big pharma is outsourcing human testing?
As in, testing potentially dangerous new products on poor (non caucasian, perhaps?) people is sooooo much cheaper in [insert favourite country here]?
So, on one hand these big companies are making tons of dough off their rich consumers. Then, they refuse to sell certain drugs *cough cough* AIDS *cough cough* in poor countries (no enough profits to be made in Africa, mate!). Then, they put pressure on third-world countries (Brazil, India, etc) who decide to copy these products anyway.
Then , they simply outsource human testing, because "we big corporations have a God-given right to make even more profit ". Even if it means less security and more unemployed.
Is this sick or what?
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
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.
Countries like Brazil have taken to producing drugs like tri-therapy drugs for AIDS without paying the license, to make them affordable for their population, as a matter of national emergency. Others, like India, have made an entire industry out of producing generic drugs.
These medicines are cheap, yes, but the cost is offset onto the newer meds, those that are still produced exclusively, or under license, that aren't in the public domain yet. That's why, when countries hurt the bottom line of pharmaceutical companies, said companies jack up the price of the top line.
Combine that with the cost of doing any sort of medical-related business in the US, due mainly to insurance costs, due in turn to ligitation-happy Americans, and you know why certain silly little pills can cost hundreds of dollars.
I'm not saying pharmaceutical labs aren't also part of their own problem (it's in great part their very greediness that made the generic knockoffs industry the huge success it is in the first place), but with their margins reduced all the time, it's not wonder they try to cut cost and practice off-shoring. And time has shown that it's not their sense of morals that will compel them to hire local workers...
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
"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
I know this is sometimes hard for Americans to understand, but the US is not the only nation with advanced research and development. And just because the US likes to think of biotech and computers as "American" technologies industries, they have always been, and continue to be, international efforts.
Note, also, that European and Asian companies have been "off-shoring" to the US for decades: a lot of their R&D, marketing, and financial services have been located in the US.
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.
After decades during which the US has siphoned off the best and brightest from all around the globe ("brain drain"), with high-paying jobs and a good standard of living, it is only natural that other nations are finally trying to do something about it. The real question is why this hasn't happened earlier. Maybe nations like Britain will finally pay their researchers a decent salary, and maybe nations like Japan will finally pay respect to their researchers.
Of course, the implications for the US are not so good: US R&D is based on highly-skilled immigrants. If that flow stops, it may temporarily create a little more demand for US workers, but it will primarily make the US overall far less competitive.
Of course another industry wants to offshore... Corporations are not out to make make a good product, or even make customers happy, they exist to promote the wealth of it's stockholders, and nothing promotes wealth like cutting production costs... The key to curbing the trend of offshoring rests in innovation by us for us, if your pissed you got laid off so someone in India can have your job for a fraction of the costs, make your own company and employ others like you and prove you can do better. The key to good business is a matter of survival, do what you need to to survive, fair doesn't exist in business, if you don't like the rules change them, but don't get pissed because someone is doing that so they can survive... IMHO I agree it's unfortunate that offshoring is becoming a trend, but lets stop whining and do something about it....
I worked for a bank for a few years (in a country far away, where they have numbered accounts and you're actually looking at jail time for revealing customer data) and something like this was just unheard of.
The absolute main security issue was customer data. Not that they would have fancied embezzlement or theft but this was looked upon far less serious then compromising customer data, period.
In the data centers (which you had to physically access in order to query real customer data, safe for the front office and also there it was very restricted what you could look at) you had to go through multiple layers of security and where not permitted to even remove a printout.
Computers where dismanteled and disks shredded, they where never for resale. This was applicable for every last computer from every last branch and office
Now, I agree shit happens. Probably in their case it started with outsourcing such a critical tasks to "ACMEs chep disk blanking operation" in order to save a few bucks. This is not really excusable, but it happens.
But what really gets my blood boiling are statements like the one from that PR bimbo, which are just utter bullshit.
Maybe she should apply for a job at Microsoft to sell "trustworthy computing".
And you don't think you do now? How do you think insurances work? They figure out how many people per thousand will have major medical expenses, and get an estimate of what those will cost. They then divide that among the entire thousand, plus a large markup for themselves. In other words, if you have insurance, you're already paying for others.
What would a government run program do to change that? Well, the markup would go away- the government wouldn't need to make a profit, it'd all come from the general fund. It also would stop the problem of small businesses not being able to afford health care for their employees. They wouldn't have to, which would greatly equal the playing field.
And on a personal note- if you really begrudge someone who had a car accident or other injury a little bit of money, you're a sick fucking excuse for a human being.
I still have more fans than freaks. WTF is wrong with you people?
the government wouldn't need to make a profit
Which is precisely why the government will never be able to do anything more cheaply over the long term. There is no incentive to streamline. Costs are passed directly on to the consumer/taxpayer, who no longer has a choice in the matter.
Speaking as someone who wrote electronic insurance filing software for a number of years, I can tell you the US government is already a vast, inefficient bureaucracy when it comes to the relatively small involvement in healthcare it has today (the key word is "relatively"...)
Slashdot quality declines as the number of hot grits posts decreases. - Provolt's Law, Apr-09-2005
But for those who haven't, here is a thought-provoking article on some of the basic issues posed by outsourcing. The article focuses on IT offshoring, but it may be a useful appetizer for /.ers delving into the biotech offshoring discussion.
The problem for the Empire was that it gradually outsourced everything to the provinces - the grain supply (Egypt), mining, other agriculture. Like the US it imported the most able provincials and gave them citizenship to encourage them to support the system. But eventually the focus of power moved to the provinces, Rome itself became decadent (who needed to earn a proper living?) Even most of the army was recruited abroad. And the Empire collapsed. The remains of the Empire that survived - in Byzantium - was a statist civilisation in which capitalism was rigorously controlled, based around many small artisans and companies of very limited size, in which the Government interfered in production, distribution and exchange. Sound like anywhere?
Endless outsourcing may be capitalism, but what happens on the day when R&D is carried out abroad, manufacturing is all done abroad, the Internet, cheap broadcasting and cheaper film making has destroyed the US dominance in media, the US army is too small to control even a small dissident country (look at the problems posed by Iraq...we could kill everybody, but imagine the backlash), the rest of the world sees that the Emperor has no clothes, and the dollar collapses?
Live off intellectual property? Can you imagine the rest of the world agreeing to observe US patents which frequently would not get through the assessment stage in European countries?
At that point the super-rich will be sitting on piles of worthless dollars, and farming may look like the smart option again.
OK, it probably won't be that bad. But too much policy at the moment seems to be predicated on the idea that the US can control the rest of the world financially or militarily, and the example of Rome shows that unrestricted capitalism is likely to destroy the very factors that make that possible.
Panurge has posted for the last time. Thanks for the positive moderations.
"Healthcare is cheaper in India because of India's weird patent laws and not because this an ultra-cheap heaven on earth. Check out: http://www.wired.com/news/conflict/0,2100,48153,00 .html
http://www.wired.com/news/medtech/0,1286,47643,00. html "
Very interesting discussion over at:
http://gigaom.com/archives/2004/04/dark_side_of_ou tsourcing.html
Or are you the kind of person that wants to have his cake and eat it, resell it, outsource it, etc...?
Sure, why not? America doesn't owe the rest of the world a damned thing. Other countries are perfectly free to pass their own laws in that regard, if that's what they wish to do. But as an American, I'm not obliged to look out for the interest of any other nation or people. I can if I like, as an individual, but I'm not *obligated* to - nor is my government.
The government of America is for Americans, and no one else. It's that simple. If corporations wish to essentially become foreign entities by moving jobs and resources to foreign nations, then they should be treated as such. In fact, so far as I'm concerned they should simply move their entire operation to that nation, register as a corporation of that nation, and be treated as such by the American government. They deserve no handouts, no tax breaks, no protection under American law, and no benefit from American trade agreements with other nations.
Let's see how long those former American companies last when they're wholly Indian in both name and law. Let's see how well they do when they have to operate on the other side of a tariff barrier.
Max
My god carries a hammer. Your god died nailed to a tree. Any questions?
Is he overly optimistic? yes.
Is he wrong? No.
I am outside the country, and I will tell you this. The US has massive buisness and hightech advantages over the rest of the word. Stemming not only from America's relatively unique culture (yes, there is culture in the US), but also it's massivley agressive and competative buisness support industries; which I'm sorry but don't really exist out side the US.
Americans ARE allowed to fail, without massive pressure. This is something not found in places like Asia (also known for having the worlds highest suicide rates). Remember Failure is the single most important ingrediant in Success. If you do not take failure well, you will never be a winner in business.
Americans are HIGHLY individualistic, and have thick skins. They(we) don't get bent out of shape over personal failures, or insults. Note to Americans: Most other cultures do not take well to being 'teased'.
Americans are risk takers, in the extreme (go find me another country with a higher rate of gambling addiction).
Americans are work aholics; it's not tacky to ask an American what he/she does for a living, and in many cases even how much he/she makes. Americans define themselves by their work.
Americans are brash, loud, and arogant. All great ways to get noticed.
Americans have NO idea what the world is like outside their shores. It's a double edge sword. If Americans were poor they'd stay that way, but since their wealthy, the world tends to emulate them. Meaning they are always the leed dog.
Will it always be that way? Every dog has his day. But that day, is not today.
I would rather be ashes than dust!
Sure, from the safety of the upper class, and with most of your income being from investments, outsourcing looks great - all that cheap stuff available at Target, eh? But if you're 50, have two kids and a mortgage, and happen to, say, be an engineer for a telcom, hearing that your getting laid off "will be good for the American economy in the long run" isn't much solace.
Human genome = 3 billion base pairs = 6 GBit. Windows + Office = 20 Gbit. Which is more impressive?
This brings me back to my old question:
- Why are there no drugs that cure AIDS?
Sure, there's several different treatments to hold the advance of the disease - "take this the rest of your life or die" drugs - but no "take this a couple of times and you're cured" drugs.
From a purelly economical perspective, the gains to be had in selling a drug to someone for the rest of his/her life are much greater than the ones to be had from selling a drug for a limited period.
I cannot avoid thinking that in commercial laboratories, promising research paths to drugs that might cure AIDS have probably been put on hold for the sake of "survival" drugs.
I'm sick of being called lazy for only working 50 to 60 hours per week. I'm sick of being called stupid because I'm not Indian, Chinese or Russian. I'm sick of being called overpaid because I have have to survive to buy food, pay rent, pay off education, etc in a country whose cost of living is higher than in an Indian village. I'm sick of being called racist simply for wanting a job for myself and my friends in my own country. And I'm sick of the constant fear that I'll be layed-off while the high level managers levels of compensation keeps growing. I'm so sick of the fact that they leveredge this fear to make us work longer and longer hours. I'm so sick of it all.
For many years, US research and advanced technologies relied heavily on imports of foreign brain. Einstein, Von Brown (space missions), Sikorsky (helicopters) to name just a few. Sure, most Nobel prizes are won by Americans, but they are mostly managers of teams of developers, teams in which most of researchers are foriegners.
The only field in which Americans are the best and do not need foreign brain to survive is business.
So what is wrong in that American business discovered that is cheaper to pay the foreign researchers in their own countries like India, Eastern Europe or Russia instead to bring them in US and pay them on US level?
What is your problem as biotech or programmers or whatever if there are other peoples in the world, who are as skilled as you (or better) and available to work for less?
Take programming for example. Buggy programs were written all the time, before and during offshoring. Buggy programms is not a matter of offshoring, is a matter of management, HR, etc.
Wasn't US who promoted so heavily "free markets" and "democracy" into the world? Wasn't US who pushed for opening markets, dismiss trade barriers, free flows of capitals and supported the globalization? Don't tell me that US did that from altruism, US did that for a single reason: take the larger part of the pie. But like in any open market, small players might gain parts of it as well.
So I really don't see why this offshoring issue must be seen as something dramatic. Slashdot is read not only by Americans, but by many other peoples worldwide and many of them benefit from offshoring! They can build a decent life in their countries, they do not have to emigrate and be foreigners for all their life, they can be always near their parents and friends. Their countries can improve the general level of life and become larger, more attractive markets. Take the example of the former socialist countries that will become part of EU in two weeks. Or China. Or India. Why this cliche, that only in US the standard of life should be high and some developing countries should always developing and developing and developing?
So stop complaining about offshoring! There are only two things granted in life: death and paying taxes. For all the others each of us have to compete!
Of course, the next trend will be moving those people's jobs overseas: Executive Offshoring. Yeah that site is (still) satire, but pointing it out to higher management might make them think again about offshoring ...
The idea that all people are just as suited for testing drugs is very incorrect. For a drug trial to truly translate to an American population, it would have to be performed on a population with roughly the same ethnic mix and environment. It is not at all unusual for drugs and poisons to effect various populations differently.
An example of this is PCBs. The original tests on PCBs back in the 50s and 60s were performed on an Indian (as in from India) population. They found a fairly high risk of cancer and that is why we started working to reduce and eventually nearly eliminate PCB usage in America. Interestingly, later tests on other ethnic groups found that ethnic groups of European and African descendency demonstrated virtually no cancer response to PCBs. Indians were the worst with other Oriental groups showing decreased, but still present cancer responses. The cancer response amongst the Japanese was the least of the Oriental groups, though still present. This in no way says that we shouldn't have reduced our usage of PCBs since there are people of Oriental descendency in our society, but it does demonstrate that medical tests do not always translate even at a gross level from one group to another. If we had never tested PCBs on people of Oriental origin, we wouldn't have banned them.
In many ways, there is a more disconcerting flip side to this that has been largely ignored by the so-called "medical science" (I put that in quotes because they ignore so many factors, it is hard to say that they are a legitimate science). The flip side is that because we ignore ethnic origin and many "how they live their life" type factors of the people involved in tests and we don't work hard to identify the factors that cause failure in a drug for the typically small percentage that do have adverse effects with many otherwise beneficial drugs, we are very likely missing out on many drugs that might be very beneficial. Biology is not blind to these factors and we shouldn't be either if we truly want to call it or make it a science.
The genetic sciences are probably the answer. Eventually, we should see a process evolve of prescribing drugs according to genetic tests that determine precisely how a particular individual will respond. At that point in time, they can hide the ethnic factor by talking about the gene that interferes with the test instead of the ethnic groups that typically have that gene.
There really aren't too many jobs left that haven't to some degree been offshored. Even the "consumer" position is well on its way with many companies trying hard to penetrate what will soon be the ultimate consumer market, China. They are up to 70 million low middle-class type consumers already and are projected to pass the US in consumption around 15 years from now.
Essentially, I think we've lost the game. It is time to figure out why we lost and see if we can't rebuild. Personally, I believe it is because we commoditized education. By turning our education system into a mass production system aimed mostly toward rote learning of technical skills and largely suppressing the thinking and critical problem solving side of education, we created something that isn't special and is easy to copy. Just send your people over and have at least some of them come back with the knowledge and the textbooks and in a few decades, you can steal almost everything we have. In essence, we have destroyed the diversity and concentrated the methods used within the system. Thus, what was a wonderfully diverse thing that couldn't be copied, became a defined system that can.
My answer will never happen without some major upheaval. I would want the system to be transformed back to one that focuses on the individual and targets the studies towards expanding that individual's potential in whatever fashion is appropriate to their inate capabilities and desires in life. Instead of imposing a template of what each and every person should learn and become, encourage and develop individuality not in social beliefs, but in knowledge and skills. Build craftsmen, not robots.
More complex than that.
People at the tops of these companies are *always* posturing to go somewhere else, and don't plan to be wherever they are currently at for the long haul. With that in mind, short term extreme gain (even up to 3 to 5 years can be called short-term) makes them look really good to those that would move them, and few think about the really long term viability of the strategy (10, 20 years down the line).
The huge flaw I see in the outsourcing trend is that development costs are spent in region y. Meanwhile, company relies on economy in region x to buy the product, because the people of region y cannot afford the price the company wants to charge. The problem then seems obvious. It works for a significant number of companies to cheat, but at some point things will reach a breaking point. If a company pays employees at a rate befitting a certain cost of living typical of a region, but does not price anywhere near consistantly with that regions cost of living, it is unbalanced and simply works due to other companies not cheating and accumulated wealth in their target consumer region.
With this in mind, things should either be priced in accordance with the producing region's standard of living, or simply marketed at the same region that produces it. It seems very wrong for a company to lay people off and then rely on that same group of people to buy their stuff, because their new employees can't afford it.
Despite all this outsourcing, the costs of the results has come down little, so the development savings aren't really being passed on to consumers, but pocketed by higher level management who pat themselves on the back and get promoted.
I know, the same things were said about manufacturing, and the US largely absorbed that outsourcing. Now white-collar jobs are being outsourced and people like me are again screaming the sky is falling. Maybe IT outsourcing will also be absorbed in time. Maybe Biotech jobs can go too, and we'll busy ourselves with something, but the US is starting to mess with jobs that require more and more training and skill, and retraining becomes increasingly difficult. One day, one industry will mark the point where there isn't enough economy left to sustain the consumer market for these companies' products, and then it'll be interesting to see what happens.
XML is like violence. If it doesn't solve the problem, use more.
I've read several posts across several threads on slashdot on this topic defending outsourcing.
Many of the posters are self assured to the point of smuggness, arrogance, and condescension.
I haven't seen any facts from them or other people who support offshoring.
Anyone who has had a decent education knows that what academia knows is not always as solid as academia would like everyone to think.
Add to that Economics is not a hard science and that there is disagreement among economists as to the value of outsourcing.
Where are the jobs?
How will outsourcing create jobs for Americans?
Will enough jobs be created for Americans?
Will the assumed forthcoming jobs come before a large number of people experience economic ruin?
Will the assumed forthcoming jobs be quality jobs that people can support famlies on and enjoy doing?
Will the assumed forthcoming jobs stimulate students to study subjects that will keep America competitive?
How....will outsourcing generate these jobs?
So far I haven't even seen attempts at these answers from anyone. At the most you some smugness with a statement that pretty much boils down to
"Don't, worry it will work out".
Most people would not accept that answer from a mechanic when they hear loud clanking noises from their car without a detailed explanation.
Yet, many people are willing to accept that answer for their careers and the future of their country.
I don't get a sense that these people are stupid.
Maybe the whole thing stresses people out so much they just assume what rich people tell us and what other people parrot is the truth to free themselves from having to worry about it.
Maybe it is just the high school football rivalarly mentality of party loyalty in American politics that leads to people parroting all of this stuff without finding answers to those questions.
Where's the beef?
If you are not working through no fault of your own you should consider whether or not the president should be working after this January.
Steve
Think about it - what percentage of the Indian population is IT? Damn small.
How many Indian household will buy {computers|cable TV|techno} ? Damn few. We are not building a new market overseas, because the people outsourcing to are a small fraction of their own economies. We're killing off the American middle-class buying machine, and the foreign market will not replace it for decades, and even then why should they buy our stuff when there will be local stuff to buy just as good?
Look at Japan - alledgedly open to foreign companies, but lots of small details that make it too expensive to comply for non-Japanese businesses.
I've been reading up on this outsourcing for awhile and I've come to the conclusion that it is really only a symptom of a greater problem. Our system has sabotaged itself. From what I have read, there are three reasons why we should not support off outsourcing and why it is a problem.
1. It is a market externality. Lou Dobbs had someone write about this. Basically, it is when a company can get all the benefit with only partial cost from a decision. Take a chemical company that drops waste into the local river. It causes cancer downstream. However, in a purely capatilistic market this is a good thing for the company. Why? Becuase they can get the drop in cost without having to pay for the treatment of the people downstream who get cancer. They get all the benefits of lowered costs without any of the bad side-effects of the decision. That is why we have legislation: to deal with such situations.
2. Education - The free marketers have made one invalid assumption. They assume that since these lower paying and less demanding jobs are going overseas, we'll be able to train for higher level ones. But one look at our schools compared to those of other countries and it becomes obvious that will not be the case. Our school system is horrid. How will it train these new knowledge workers with a education system like ours? It won't. It will go to countries that have better education systems. So we'll reduce the number of low paying jobs, thereby reducing the number of people who can afford to better educate their children, while investing in the education of people elsewhere. Smart move. Make everyone else's population smarter than yours and then expect good jobs to come here.
3. Monopolies, the buying out of america, etc - Under this stands healthcare and standard of living. We are paying far more than the services we pay for are worth. Now, we'll get a bunch of capitalist showing up and saying that: the market determines worth. Not anymore. What determines worth is how effeciently a company can abuse the market and its regulations to its own benefit. You have monopolies in health care. An intellectual policy that is completely out of control. Tax shelters and greed that corrupts. Our government is no longer owned by the people, it is owned by political parties that live off of us like parasites and are in the pockets of industry. The government has grown to a size that is ridiculous. The ancient romans payed about 7% taxes total. When you figure in indirect taxes, we pay about 50% taxes. We take out what are effectively loans to pay for tax cuts so that we can buy chinese imports - stimulating the chinese economy but not helping ours out much at all. We have gone from wanting to live well to wanting to live like gluttons. Corporate accountability has disappeared.
So biotech going overseas is really inevitable. We are losing our innovative advantage by the day. Our education gets worse. Our bueracray gets larger and more ineffective. We are being betrayed by our industry and our leaders. So let's continue to complain. It won't help. Our congressman who understand don't listen and those are few compared to those who simply don't understand what is going on. Biotech and every industry will continue to go elsewhere as long as there is somewhere where else where they can more easily take advantage of the system. Money has become a goal rather than a means. We no longer have any grasp of what personal security once was. We are apprehensive for good reason. Can anyone see how this leads to a better future? I can't. I can see how a few people will be a lot richer but I don't see how we'll be better off.
We need to think about what we want and how we'll get it. We can't afford to blindly trust captialism anymore. Especially when capitalism is full of ppl who will cheat every chance they get. We need to find out what we want and how to work for it rather than to mindlessly try to uphold the status quo cause all things must change.
There's a growing sense that even if The Future comes,
most of us won't be able to afford it.
-- Lemmy