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May 16, 2007

Richard Florida

Outsourcing and Jobs

« Four Takes on Brain Drain | Main | Why Bubbles Are Good for the Economy »

Robert Samuelson writes:

Remember the great "offshoring" debate? It was all the rage a few years ago. Modern communications allowed white-collar work to be zapped around the world. We faced a terrifying future of hordes of well-educated and poorly paid Indians and Chinese stealing the jobs of middle-class engineers, accountants and software programmers in the United States and other wealthy nations. Merciless multinational companies would find the cheapest labor and to heck with all the lives ruined in the process. ...Every so often, it's worth revisiting old controversies to see whether the reality matches the rhetoric. In a recent paper, Jacob Funk Kirkegaard of the Peterson Institute for International Economics did just that for offshoring (a.k.a., overseas "outsourcing"). He reviewed many studies. His conclusion: "The heated public and political debate . . . has been vastly overblown."

The study is here.


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IBM has a program called LEAN which may offshore up to 100,000 American jobs by the end of the year.


Aby Varghese

I think outsourcing is a resultant of globalization. When the multi national companies like coke/Mercedes/ Audi / Suzuki / GE entered local market and uprooted the local manufacturers, the software and companies are making merry with the work contracts they earn from abroad. There always has to be give and take policy.

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