Rapid Adoption

By Larry Dignan  |  Posted 2003-09-05 Print this article Print

Fast Change, Slow Response
For Ronil Hira, assistant professor at the Rochester Institute of Technology in Rochester, N.Y., the biggest concern about offshore outsourcing is that its a fast-moving trend with largely unknown implications for the U.S.

"This debate has been cast as this is free trade vs. protectionism," says Hira, who testified before a House of Representatives committee in June. "I dont think thats the right way of thinking about it. Thats just one part of whats going on. This is happening so rapidly that the labor market doesnt have time to adjust. Theres a long lag for retraining, moving and those sorts of things."

Hiras biggest concern is that research and development for cutting-edge technology moves offshore. This is a development that is not apparent now, but likely in the future, he says. Currently, "commodity" jobs such as programming and coding are moving offshore, but analysts widely expect higher-level careers to also go abroad. Indeed, Forrester Research projects 288,281 management jobs offshore by 2015, up from zero in 2000 and 37,477 in 2005.

Hira says he isnt opposed to offshore outsourcing, but argues it would be in the national interest to look before the economy leaps. "The way I see it right now, we dont have a read on the magnitude, scale or scope of offshore outsourcing and whats actually happening," says Hira.

Before offshore outsourcing gets too far along, Hira says there should be a national fact-finding mission to get the following:

  • Conduct a census of whats happening with the movement of high-level professional and management jobs abroad. The survey should nail down: How many jobs have left in technology, what is the quality of the services, and how is trade affected?
  • Outline how the military would procure technology that originates outside of the U.S.
  • Determine how losers will be compensated and detail retraining efforts.
  • Project short-term and long-term economic impacts, and define winners and losers.
"One fact thats being overlooked here is that there are losers in this equation. Theres no free lunch in free trade. You can be principled about free trade, but if you dont say how do we compensate and retool the losers you miss part of the equation," says Hira.

Next page: Free market advocates respond.

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET News.com. Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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