Difference between revisions of "IT Outsourcing: Economic and Policy Analysis"

Revision as of 07:32, 8 November 2004

ANNOUNCEMENT

Monday November 8: Each team must provide a one-page project description, which will be worth 10% of the project grade: team members, topic, sub-topics, sources, team organization, etc. (We will provide brief comments on these submissions.)

ABSRACT

Topic

Economic and technological incentives to outsource, and government policies that can affect IT outsourcing rates.

Sub-topics

Here's how our project could be divided - PLEASE EDIT/ADD TO THIS LIST

1) Economic considerations to outsourcing - Pros/Cons

- costs/benefits of outsourcing (looking at theory of comparative advantage, supply/demand, costs of transfer, etc)

- discussion of India and why the US chooses to outsource there

- Compare cost of living in India

- operational costs in the US v. costs in India

- foreign currency benefits (pay local workers in money from local product sales)

- can allow US companies to avoid layoffs

- if costs savings allow company to grow, then company can hire US workers in other areas (marketing, biz dev, etc.)

- outsourcing may lower employee morale which in turn reduces productivity

2) Technological incentives to outsource - PROS/CONS

- discussion of India and why the US chooses to outsource there

- What risks do we run by outsourcing our IT to countries such as India?

- Is it safe technologically to do so?

- Are key areas outsourced?

- Helps avoid layoffs when projects are cyclical

- Allows for rapid ramp up of work force to handle strategic projects. Either (1) using outsourced workers for the strategic projects or (2) using outsourced workes for core projects and freeing US-based workers for strategic projects

- Effects of outsourcing on US innovation (investing in R&D)

3) Analysis of existing public policies (France.. any other countries that have opening initiated policies to stop outsourcing? Discuss the differences between France and US outsourcing--industry.. are they similiar? Are they detrimental to the comparison?)

4) US public policies to "manage" outsourcing.

- What does Bush administration say about IT outsourcing?

- Small case study of Silicon Valley? Could it be treated like France's 20 "competitiveness zones"? Case study of Washington State (see article below)

- Possible public policies and discussion of how feasible they are. Including:

a. Improve high school math and science to keep US competitive internationally

b. Modify college curriculums to provider training for jobs that will continue to be needed in an outsourced economy (project mgmt, architects, etc.)

c. Additional government spending to university R&D projects to produce higher/highly skilled workers

d. Tax breaks to US corporations for keeping employees in US

e. Visas (this could be a whole topic to itself).

5) Conclusion.

Group Members:

Mandy Chang, UC Berkeley, mandy_c@berkeley.edu User: mandy_c

Aamir Alavi, UC Berkeley, aalamir@berkeley.edu User: aamiralavi

Brad Struss, UW, bradstr@cs.washington.edu User: bradstr

Jeongsoo Kim, UC Berkeley, jk37@berkeley.edu user: jk37

Team Organization

Members are independently responsible for their own chosen subtopics, but all will collaborate through the Wiki discussion page.

Aamir - interested in subtopic 1
Mandy - subtopic 3
Brad - subtopic 2
Jeongsoo - interested in subtopic 4

Sources

Businessweek article

"Offshoring" Service Jobs: Bane or Boon and What to Do?

How Outsourcing Creates Jobs for Americans

Outsourcing, Offshoring, and Globalization

The Outsourcing Bogeyman

Offshore Outsourcing Resource Center

[http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/03/07/MNGRT5G2C11.DTL Offshoring's giant target: the Bay Area Silicon Valley could face export of 1 in 6 jobs -- worst in nation]

Global IT Sourcing: Impacts and Implications for Washington State

Dell's dirty words: Outsourcing, proprietary

Relocating the Back Office, Economist