Outsourcing

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Outsourcing is "the transfer or delegation to an external service provider the operation and day-to-day management of a business process. The customer receives a service that performs a distinct business function that fits into the customer's overall business operations.[1]

"There are two principal types: 'traditional' outsourcing and 'greenfield' outsourcing.
"In 'traditional' outsourcing, employees of an enterprise cease to perform the same jobs to the enterprise. Rather, tasks are identified that need to be performed, and the employees are normally hired by the service provider. For example, an information technology outsourcing may include a transfer of responsibility for management of data centers and networks (LAN, WAN, and telecommunications). In the field of facilities management, individuals acting as property managers might become employees of a facilities management company.
"In 'greenfield' outsourcing, the enterprise changes its business processes without any hiring of personnel by the service provider. For example, the enterprise might hire a startup company to provide a new service, such as wireless remote computing, that was not previously managed internally."

"Outsourcing came to the forefront as a management tool more than a decade ago in response to a compelling need to make organizations more productive, more competitive and more profitable."[2]

Outsourcing is Good for You

After stonewalling for a year and a half, the U.S. Commerce Department has released a report on the issue of offshore outsourcing of service-sector jobs and high-tech industries. "But the 12-page document represented by the agency as its final report is not what was written by its analysts," writes Richard McCormack of Manufacturing and Technology News (MTN). [3]

"Rather, it was crafted by political appointees at Commerce and at the White House, according to those familiar with it. At an estimated cost of $335,000 -- or $28,000 per page -- the document MTN received from the Commerce Department's Technology Administration contains no original research and forsakes its initial intent of providing a balanced view of outsourcing. ... According to those who have tracked the report's whereabouts, it was completed well before the November 2004 presidential election but was delayed for clearance by the White House and the Republican-controlled Congress due to the controversial nature of the subject." [4]

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Articles & Commentary

2001

  • Judi Hasson, "Bush adviser goes to Lockheed," FCW.com, July 13, 2001: "'No name is more associated with effective government and outsourcing than Stephen Goldsmith's,' said IMS president and chief executive officer John Brophy. 'He has introduced technology into virtually every imaginable government arena ? outsourcing more than 80 government functions.'"

2002

2003

2004

2005

2006

2008

  • Robert E. Scott, "The China trade toll: Widespread wage suppression, 2 million jobs lost in the U.S.," Economic Policy Institute, July 28, 2008: "The growth of U.S. trade with China since China entered the World Trade Organization in 2001 has had a devastating effect on U.S. workers and the domestic economy. Between 2001 and 2007 2.3 million jobs were lost or displaced, including 366,000 in 2007 alone. New demographic research shows that, even when re-employed in non-traded industries, the 2.3 million workers displaced by the increase in China trade deficits in this period have lost an average $8,146 per worker/year. In 2007, these losses totalled $19.4 billion."
  • Kim Geiger, "Trade, outsourcing and tariffs top '08 concerns," MSNBC.com, August 4, 2008: "In a poll conducted last month by the Pew Research Center, 80 percent of respondents said that the global economy has influence over the U.S. economy. Of those who thought it did, 63 percent said it was negative. The political tide seems to be running against those who want to lower trade barriers. "

2010

  • Mike Elk, "Obama Solution to Stop Outsourcing - Stop Counting Jobs Outsourced (No, Seriously!)," Huffington Post, March 3, 2010: "Since 2000, the U.S. has lost 5.5 million manufacturing jobs, with 2.1 million of those jobs being lost in the last two years alone. Since 2001, over 42,400 factories have closed in the U.S., and another 90,000 are considered at severe risk of closing. The last time so few were employed in manufacturing was in 1941, before World War II spending pulled that sector out of its Great Depression slump. Numbers like these make me want to cry. So President Obama has come up with a big and bold solution to deal with the problem. He's going to shut down the federal office that counts how many jobs are being shipped overseas. It's like ignoring a bully that picks on you in grade school. If we just ignore companies like Whirlpool that take stimulus money and ship jobs overseas--maybe they will stop doing it."