Revision as of 00:57, 8 November 2004

one page description, due November 8th, Monday, worth 10% of grade

Outsourcing: Past, Present and Future

Team

• Andreas
• David Dorwin
• Diwaker Gupta
• Kiran Kalyan
• Stuart Schimler

Introduction

Policy makers often fall victim to the age old error that they are in a unique situation, fighting forces that have never been wrestled. This is rarely the case, especially for the new economy and its centerpiece known as 'outsourcing'. This new business practice is the result of a technological and communications revolution that was much like that of late 19th Century in the United States. In the past, it resulted in the development of the multi-national corporation. This study analyzes the reasons behind outsourcing, traces its rise through history and into the 21st century, while putting in the context of public policy and its impact on society and innovation.

The first part of our paper will look at outsourcing in its historical perspective, comparing it to business developments in the past- helping to understand where outsourcing came from. Much of the history will be derived from the work of business historians, such as the leader Alfred Chandler of Harvard Business School.

Contemporary trends and related policies on outsourcing will be the subject of the second section. Among other things, we will present a case study on the H1-B visa cap issue, which was the center point of outsourcing related debate for a good 2 years and discuss outsourcing from the perspective of the 'outsourcer' and the 'outsourcee'. In light of the recent election and the uncertainty surrounding it, we will discuss outsourcing from a public policy point of view, trying to discern what does outsourcing mean for various sections of the society -- the people, the companies, the government.

The paper will conclude with a discussion on the future of outsourcing -- whether it will sustain itself as a profitable business model in its present form, or will it change drastically, and how publicy policy can and will shape outsourcing in the years to come. We will conclude with some recommendations on policy formulation in this area.

Past

In this section, we will look at the origins of outsourcing - from its relations and similarity to offshoring. Stuart(and,for now,Andrae) will look int the histroy of outsourcing movements - from the one in manufacturing to possible others scattered throughout colonial history.

Policy-wise, we will provide [Kiran,Stuart,David,Diwaker] a broad overview of legislation enacted so far that has led to the present boom in outsourcing - both in the US and in outsourcees like India. [ Eg: 10-year tax holiday for s/w firms in India - enabling co.s to significantly boost their margins]

Scope

the origins. the rise.

Sources

Present

Diwaker will study the H1-B visa case, as well as help with other topics in this section. David and Stuart will provide the political context. Kiran will provide an indepth look at outsourcing from the Indian policy-makers' perspective - does outsourcing really help? is there any value-add to the outsourcee's home industry? if so, what policy changes are in the pipeline - with both situations in mind ?

Scope

This part of the study will focus on comtemporary outsourcing: we will try to answer questions like "is outsourcing good or bad?" both from a US perspective as well as from the perspective of an "outsourcee" (like India).

Despite the large losses in US jobs due to outsourcing, its not very clear what the impact on US economy has been -- while the public is opposed to shifting jobs, the companies are finding it increasingly profitable to move operations overseas.

For countries like India, outsourcing has opened up a huge investment market and created millions of jobs. Its not entirely clear what the impact of outsourcing has been in a global context?

Will the WTO (and the 'level-playing-field' implied therein)have any bearing on outsourcing evolving as an actual industry versus mere dumping/destruction of home industries (British Empire vs. Indian kingdoms)?

We will also explore the political outlook on outsourcing -- what are the views and policies of the Republicans and Democrats on this issue, specially in light of the recent elections. Are politicians interested in helping people keep their jobs, or help companies make more profit?

Sources

• http://www.h1base.com/
• Computerworld Coverage: Focus on H1-B Visas
• A blog on IT outsourcing to India
• Various articles on Slashdot and Wired news
• http://heather.cs.ucdavis.edu/itaa.html

Future

Scope

will outsourcing survive? outsourcing and public policy?

Sources