Talk:Outsourcing and its impact on innovation?
[Damon May] Along the lines of a blurb I just wrote on the main discussion page (http://cubist.cs.washington.edu/CSEP590TU-wiki/index.php/Talk:CSE590TU), I think it'd be interesting to do a project on the current state of outsourcing in the IT industry, projections for the future, and the things that government and industry can and/or should do to stem the trend.
SMM: Hint: If you aren't already familiar with them, you should brush up on the economic argument that free trade always makes society richer -- the buzzwords are "comparative advantage" and "returns to trade." The material is not hard: Any intro econ book should have it. Of course, we've never taken free trade to the extreme of letting human beings flow freely back and forth across borders. Outsourcing blurs that distinction.
James Welle: I am interested in this as well. It would be interesting to look at history in other industries ( the auto industry for example ) and try to predict what may or may not happen to the US technology workforce due to outsourcing. It would like to look at other related issues such as unions as well and do an analysis of how this could benefit or harm the industry.
James Welle: Here is a reference on comparative advantage. http://internationalecon.com/v1.0/ch40/40c000.html
Mandy Chang: Is it true that most of the jobs that we outsource have to do with cheaper labor? So if that is the case, and firms can lower their production costs, they can invest more into R&D domestically, incentives for innovation will be greater. However, I've recently read an article in reader's digest that suggests that the competitive level of American human capital is declining because of education standards. There are these situations where high school students' parents will file complaints against school districts to change lower their standards so that their kids will be on the school's honor rolls. This defies the central key of American capitalism and free competition. And because of this, some of the more technical jobs are being outsourced as well. Overall though, if the research and development projects are still being done within the country, outsourcing (referring mostly to production jobs) can only increase the ability for innovation.. right?
Mandy Chang, UCB
Diwaker: I'm also interested in varios aspects of outsourcing (I was the one who added the project topic ;)!) In particular, I would like to investigate (along the lines suggested by Mandy above) what kind of an impact outsourcing is having on the American IT industry. James blurb indicates that outsourcing has a negative connotation. Do we have empirical data to suggest that this is indeed the case? What about the long term impact -- it might very well be that the Google, IBM, HP, GE research labs in India might contribute more as far as innovation is concerned in the long run.
James Welle: I agree that outsourcing could lead to more innovation. Any negative connotation that I implied above was related to how outsourcing may affect the US IT workforce. Even if outsourcing improves innovation worldwide, it could still negatively affect those working in IT in the US.
James Welle: I see the main issues as the following. What situations in history are similar to the outsourcing situation today and how were those handled? Can we look at any current trends in outsourcing and predict or model how it will affect the US IT workforce. What about looking at it from the perspective of another country such as India or China. How would unionizing affect the US IT workforce and does that have any relation to outsourcing? Can we predict whether or not outsourcing will affect the level of innovation in the world-wide IT industry. What else are you guys interested in researching about outsourcing?
