The Association for Computing Machinery (ACM) released a new methodically researched report which is the result of several months of effort. The report focuses on issues and trends centered on tech job migration and how it relates to economies, governments, funding, and educational systems. The New York Times reported on it, saying, "The study concluded that dire predictions of job losses from shifting high-technology work to low-wage nations with strong education systems, like India and China, were greatly exaggerated." The report finds four themes defining the contours of offshoring: technology, work processes, business models, and other drivers like increasing global education levels, reduced trade barriers, etc.
Some key findings from the comprehensive set of reports are:
1. Globalization of, and offshoring within, the software industry are deeply connected and both will continue to grow. Key enablers of this growth are information technology itself, the evolution of work and business processes, education, and national policies.
2. Both anecdotal evidence and economic theory indicate that offshoring between developed and developing countries can, as a whole, benefit both, but competition is intensifying.
3. While offshoring will increase, determining the specifics of this increase are difficult given the current quantity, quality, and objectivity of data available. Skepticism is warranted regarding claims about the number of jobs to be offshored and the projected growth of software industries in developing nations.
4. Standardized jobs are more easily moved from developed to developing countries than are higher-skill jobs.
The report also finds that issues centered around risks and security related issues need to be effectively mitigated and points out that innovation and talent development are the key to various countries/enterprises remaining competitive.
The report finds that thirty percent of the world’s largest 1000 firms are offshoring work, but there is a significant variance between countries. This percentage is expected to increase, and an increase in the amount of work offshored is consistent with the expected growth rate of 20 to 30 percent for the offshoring industries in India and China. The report makes an assessment of various national policies towards offshoring and finds almost all are reasonably progressive except China, which the report finds as the most protectionist of the countries studied here in terms of trying to protect its emerging domestic IT market from foreign competition.
Article comments
1 - Bliffle
I would certainly not advise any young person to go into programming, or any other branch of engineering. Employees are treated as wage-slaves by contemptuous managers, and consultant fees are going thru the floor. Anyone who can pass a tough engineering curiculum can get an MD (and be treated to a state-subsidized education and a Gold Pass to a monopoly) or an MBA, wherein he can sneer at mere wage-slave underlings.
2 - Dave Nalle
Management, design, R&D, administration and oversight jobs are the way to go, but often the best way to get qualified for those jobs is to go through the process of learning to program first and then acquiring more advanced skills. Grunt programming work is unrewarding anyway, so better to move into design, R&D and management type jobs. And in fact, many companies will look for new hires withing the US specifically to train them to oversee operations spread around the world. Outsourcing theoretically increases the quality of the job opportunities here in the US.
Nice to see someone use the term 'ricardian logic' to remind us how fundamentally true Ricardo's laws are in every economy and every age. He doesn't get the regard he deserves. That said, your article is damned dry. I wonder if most of those who read it will get much out of it.