April 19, 2004
UCSC hosts workshop on global outsourcing
Long-term U.S. competitiveness at stake, say
By Jennifer McNulty
Headlines that decry the outsourcing of U.S. jobs are missing the point,
according to economists who say the United States faces a far greater
long-term economic threat if it doesnt keep pace in innovation
and knowledge work.
"The Bush-Kerry debate is more about the shortrun adjustment
costs of outsourcing, but we need to go to the deeper issues that
are going to matter 10 years from now.
Singh, UCSC professor of economics
The impacts of global sourcing on regions of innovation will be the
focus of a daylong public workshop on Friday, April 30, at the UCSC-Silicon
Valley Regional Center at Moffett Field. The workshop will take place
from 9 a.m. to 5 p.m. in the Moffett Training and Conference Center
at NASA Ames Research Park.
Featured participant Catherine Mann of the Institute for International
Economics in Washington, D.C., will discuss the economic gains and policy
challenges of the movement of information technology jobs offshore,
while the impacts of global sourcing on Silicon Valley will be the focus
of a talk by Cynthia Kroll and Ashok Deo Bardhan of the Fisher Center
at UC Berkeley (see full agenda online at http://sccie.ucsc.edu/git2).
Outsourcing, like other forms of international trade, creates
winners and losers, but the policy challenge is how to deal with the
losers, said workshop co-organizer Nirvikar Singh, professor of
economics at UCSC. One way is to ban outsourcing, but that is
costly and detrimental in the long run because it keeps the economy
from changing and maintaining competitiveness.
The deeper issue, which will be the focus of the workshop, is the long-term
threat to U.S. competitiveness posed by growing centers of innovation
in places such as India and China, said Singh.
Its natural for back office jobs to move overseas,
just as factory jobs did before them, but the growth of research and
development in emerging global centers like India and China has far
greater implications for U.S. competitiveness than the movement of these
jobs, said Singh. What if U.S. companies, by pursuing shortrun
cost advantages, are creating future competitors in knowledge and innovation?
For decades, the United States has relied on immigrants from Europe
and Asia to bolster its leadership in innovation. About half of
all Ph.D.s earned in science in this country go to foreign-born students,
said Singh. These people who innovate are the engines of the U.S.
economy, so the real question is whether the globalization of knowledge
work poses a challenge to U.S. competitiveness.
The United States has been the global leader in patenting, but
what if it becomes China? What if it becomes India? asks Singh.
Weve seen earlier waves of innovation emerge in Europe and
Japan, but it was different when there were only two or three global
centers for innovation. What if there are a dozen?
Ultimately, global economic growth is good, but it requires adaptation,
just as the U.S. automobile industry had to adapt to competition from
Japanese manufacturers, said Singh, noting that policy makers need to
weigh the implications of increasing support to research and development,
education, and other areas.
The Bush-Kerry debate is more about the shortrun adjustment costs
of outsourcing, but we need to go to the deeper issues that are going
to matter 10 years from now, said Singh. If the U.S. maintains
its edge in innovation and knowledge creation, we have nothing to worry
The workshop is being hosted by the Santa Cruz Center for International
Economics, the Center for Global, International and Regional Studies,
and the Baskin School of Engineering.
To register to attend the workshop Global Sourcing and Regions
of Innovation, e-mail email@example.com
by April 21. Lunch will be provided. Please bring photo identification.
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