AGGARWAL, A. AND PANDY, A. 2004. Offshoring of IT Services - Present and Future. Eavlueserve Business Research (July 13).

This study reviews the drivers for offshoring in the United States and the United Kingdom and concludes that offshoring is going to grow in both countries. The impact of offshoring on "high-wage" countries as well as "low-wage" countries are discussed. The report also mentions that "low-wage" countries are moving away from generic low-value programming jobs to jobs with higher value such as design and analysis.

BAJPAI, N., SACKS, J.D., ARORA, R. AND KHURANA, H. 2004. Global Services Sourcing: Issues of Cost and Quality. Center on Globalization and Sustainable Development Working Paper 16. Columbia University, New York, NY.

This paper takes on a "then and now" approach where first the pioneers of global sourcing, such as General Electric and Citibank, are discussed. Then survey results are presented from current companies engaged in offshoring. The survey identifies drivers for offshoring, problems encountered during the transition to offshoring, and the overall satisfaction levels.

BARDHAN, A.D. AND KROLL, C. A. 2003. The New Wave of Outsourcing. Fisher Center for Real Estate and Urban Economics, University of California, Berkeley, CA.

The "new wave of outsourcing" in this report refers to the offshoring of white-collar jobs in contrast to the earlier wave of offshoring of manufacturing jobs. The authors' purpose was to understand the impact on labor and real estate trends in the United States and in California, in particular. However, in the course of doing so, they provided good insight and useful statistics for understanding the offshoring of software and services. Unlike many of the other studies, they believe that useful lessons can be drawn from the earlier offshoring of manufacturing jobs even though there are clear differences between the two. The authors see the software sector as only the first of a series of white-collar jobs that may be offshored and offer a list of attributes of jobs likely to be offshored. They note the specialization in offshoring specialty by nation. They consider the potential impact on the US economy of white-collar offshoring. Other organization's data is analyzed to give information on employment change in industries at risk to outsourcing (BLS), average salaries of programmers by country (from Merrill Lynch), and yearly graduates with science and engineering degrees by country (NSF). They also consider implications for US jobs as a whole, and then for various regions in the US. They use selected BLS data to consider some of the most at-risk occupations of being outsourced and find Forrester Research's forecast of 3.3 million jobs lost by 2015 as conservative. They expect that major urban areas - Boston, San Jose, and San Francisco - are especially vulnerable. The paper ends by sketching four possible scenarios. (1) Services offshoring has a greater impact on the US than the manufacturing offshoring did overall, diminishing the US's leading role in innovation, leading to prolonged unemployment, then offshored workers being absorbed into lower-paying jobs (or downward adjustment of salaries, making the US more competitive internationally). (2) A backlash against globalization, both worldwide and in the U nited States, could lead to protectionist measures and regulatory roadblocks; this is inefficient economically, but might lessen the loss of jobs/downscaling of jobs/lowering of wages in United States. (3) The development of domestic outsourcing instead of international outsourcing could occur which would lead to the redistribution of jobs within the United States and might involve shifting of jobs from large employers to smaller firms in support sectors. (4) Retain the most desirable new development at home, while offshoring more routine activities, leading to a continuing stream of new service and manufacturing activities, and hence new jobs and occupations. Low-wage jobs are lost to other countries but are replaced by higher-wage jobs in the new subsectors.

BARTSCH, E. 2004. Germany: Offshoring - More a Myth Than a Matter? Morgan Stanley, Global Economic Forum (Aug.). Available at http://www.morganstanley.com/GEFdata/digests/20040804-wed.html and http://www.morganstanley.com/GEFdata/digests/20040805-thu.html

A two-part series that looks at the offshoring in Germany by analyzing academic trends, employment trends with foreign affiliates, and statistics on corporate restructuring. The article concludes by stating that "offshoring is of secondary importance in Germany".

BEDNARZ, A. 2004. The Downside of Offshoring. Network World (July 5) 33-35.

The article provides statistics and analysis from several consulting firms and provides some analysis of the downside of offshoring. Topics include satisfaction of US firms with regional and national outsourcing as well as with offshoring; premature termination of offshore contracts and reasons (provider had financial difficulties or failed to deliver on commitments, or the buyer consolidated its outsourcing vendors); unmet cost savings through offshoring; future plans for offshoring; decline in productivity experienced by most IT organizations during the first year of outsourcing; the importance of communication to successful offshoring contracts; and risks associated with offshoring (untested technological vulnerabilities, additional costs for patches and fixes, increased risk because of unauthorized access to business data, and operational instabilities).

CENTER FOR NATIONAL SOFTWARE STUDIES 2005. Software 2015: A National Software Strategy to Ensure U.S. Security and Competitiveness. Report of the 2nd National Software Summit (April 29).

The Center for National Software Studies is a nonprofit "whose mission is to elevate software to the national agenda, and to provide objective expertise, studies, and policy recommendations on national software issues." The report is based on the 2nd National Software Summit, which was held in Washington, DC, in May 2004. The Center is interested in protecting the vitality of the US software industry. The report, and the action plan for the next ten years, is based on concerns about risks from software that is not as trustworthy as it might be (especially in light of international terrorism) and concerns over the offshoring of software work. The summit, which was attended by 80 senior industry executives and other "thought leaders", identified goals and initiatives in four areas: improving software trustworthiness, educating and fielding the software workforce, re-energizing software research and development, and encouraging innovation with the US software industry.

CHITTUM, R.2005. Rise in Offshore Jobs Expected. The Wall Street Journal (Eastern Edition) (May) B6.

This article is based on a survey of 40 of the Fortune 1000 firms by Jones Lang LaSalle, a Chicago-based commercial real estate service provider. The major points (almost verbatim from various parts of the article): 80% of real-estate executives for major companies say they are likely to increase their offshore call centers and computer services over the next five years; two-thirds say they are likely to increase offshore back-office functions; most executives are creating new jobs overseas rather than replacing US jobs, but 42.5% say they are transferring US jobs overseas; IT job losses will hit high-tech markets such as Silicon Valley and Boston hardest; moving call centers overseas will have the largest effect on secondary markets, particularly in the south and southwest; offshoring is driven by lower labor costs; real-estate costs are often higher in India than in secondary US markets because of the costs of upgrading infrastructure and the fact that offshoring firms were generally in Indian cities where costs are higher; almost 90% of the executives say that negative publicity surrounding offshoring has had little or no effect on their plans, for others it has affected strategy but not the decision to offshore; more than 80% of the firms have used third parties to help them implement their offshoring activities; and the biggest obstacles to implementation are poor infrastructure, bureaucracy, and lack of suitable buildings.

COHEN, S. AND DELONG, J. B. 2004. Thinking About Outsourcing. Brad DeLong's Semi-Daily Journal (April 2).

The article discusses the economics and politics of outsourcing in the United States. It points out how protectionist policy became a Democratic position during the presidential election, how the political debate is likely to die away after the election (especially if the economy rebounds), the impact of monetary policy on level of employment, how the economists are right in arguing that offshoring will benefit the economy overall, how the economists are wrong in that the government has not been effective at transferring funds from the winners to the losers in previous outsourcing/free trade situations such as the textile industry, and how the effect of outsourcing will occur during the course of a generation rather than more quickly so that there is time to make changes in the way we redistribute wealth so that all Americans are winners if we have the will to do so. Blogged comments follow.

COMMUNICATIONS WORKERS UNION 2004. The Threat of Outsourcing UK Call Centre Jobs Offshore - the Current Situation and Future Developments. Communications Workers Union, London, UK.

From the publication's overview. The call centre outsourcing market is continuing to grow with more companies announcing their intention to remote source call centre and back office work abroad. New technology has enabled the service industry to cut labor costs by moving operations to countries with low wage economies. Royal and Sun Alliance have recently announced plans to outsource 1,200 jobs to India. In the last year, National Rail Enquiries have outsourced 600 jobs, and HSBC has revealed its intention to outsource 4,000 jobs over 2 years. Nevertheless, some UK companies are opting to retain UK-based call centers, believing that potential gains in terms of lower wages are outweighed by poorer customer service and inadequate levels of data protection.

COOPER, M. H. 2004. Exporting Jobs. CQ Researcher 14, 7 (Fed. 20) 149-172.

This article provides a brief overview of most of the general issues about offshoring as they concern the United States. The article is best on issues having to do with the history and current status of policy concerning H1-B and L-1 visas. It includes a useful one-page chronology of events and excerpts from testimony by Ron Hira (IEEE USA) and Harris Miller (ITAA) for and against, respectively, having the government slow the offshoring of high-tech jobs.

DELIO, M. 2005. Outsourcing Report Blames Schools. Wired News (March 24).

This article reports on a new study by the American Electronics Association. The study finds that access to cheap labor is not the primary reason for offshoring, but instead faults the American public education system for not giving strong math and science education to students. Lack of government funding for technology research and development, the high cost of providing health insurance to workers and other expenses for running a business in the United States, and an increasingly litigious industry were other factors. The study argued against protectionist measures and claimed that the effects of offshoring on technology workers has been exaggerated.

DOSSANI, R. AND KENNEY, M. 2005. Moving Services Offshore: A Case Study of an U.S. High-Technology Firm. (Feb.).

Modified abstract. This report discusses the general reasons for relocating services to developing nations but focuses almost exclusively on India and, to a far lesser degree, on China. The report discusses the reasons for and the dimensions of service offshoring, summarizes the history of services offshoring to low-wage environments as well as the typology of the types of firms involved in offshoring. A case study of a San Francisco Bay Area-based high-technology instruments firm, Company X, is also presented. The paper concludes by summarizing the findings and speculates on the future trajectory of service offshoring.

THE ECONOMIST. 2005. Time to Bring it Back Home? The Economist (March 3).

This brief article discusses the growth in the offshoring business in Europe. According to the consulting firm TPI, Europe was the source of 49% of the worldwide outsourcing contracts valued at over 40 million Euros, while the United States held only 42% of the market. Whereas the British market was already mature, companies in Continental Europe, especially in Germany, are beginning to offshore work in rapidly increasing amounts. The outsourcing business has been dominated by six US firms (Accenture, ACS, CSC, EDS, Hewlett Packard, and IBM), but their market share has dropped and European firms such as Siemens and Capgemini are on the rise. BPO is the fastest growing sector, especially for human relations, but it still remains only about one-third BPO work and two-thirds IT service. In a survey by Bain & Co., 82% of large firms in Europe, Asia, and the North America are outsourcing, 51% are offshore outsourcing, and almost half that outsource claim that it does not meet their expectations.

FARRELL, D. 2004. Can Germany Win From Offshoring? McKinsey Global Institute (July).

McKinsey argues that German companies only gain 0.80 Euro value from each Euro invested in offshoring, in part because of the differences in language and culture with India (and the higher labor costs if outsourcing to Eastern Europe). In fact, Germany is better off in net economic effect to offshore to India rather than Eastern Europe. Because of the rigid labor laws in Germany, Germany gains more in offshoring than the United States does in added flexibility in deploying labor. Germany gains new revenues from offshoring firms purchasing goods from them, but the gain is not as high as for US firms because German firms own few Indian firms. There is little in repatriated earnings, Germany's high unemployment rate makes it difficult for workers who lose jobs to offshoring to find new work, and this is a problem both for these workers and for the country's productivity levels. The article recommends a series of steps to rectify these problems.

FIELDING, R. 2003. Enlarged EU to Attract Offshoring. (Oct.) (Available at vnunet.com).

Analysts at the IDC European Forum in Paris predict that the enlargement of the European Union will open up competition for offshoring to politically less sensitive players, particularly the new EU states, over countries such as India.

FRAUENHEIM, E. 2005. Report: China's Outsourcing Industry Lags India's. news.com (Feb. 3)

This article reports the major findings of a McKinsey Quarterly study from early 2005. The study argues that the fragmentation of the Chinese offshoring industry limits its ability to attract business and reduces its ability to compete with India for this business. China has many small software service providers (over 8,000, compared to fewer than 3,000 in India). These smaller companies have trouble attracting foreign business because they are more vulnerable to key personnel losses, may not be solid financially, and do not have the breath or capacity for large projects. There are no observable trends towards consolidation in the Chinese offshore industry. Chinese firms also suffer from shortage of good management and lack of protection of intellectual property.

GOLDER, A. 2004. Companies Unhappy With Results in 50% of IT Deals. Supply Management 27 (May).

Analysts at Gartner made a year-long study of major outsourcing deals by more than 20 companies in Europe. Approximately half of the time, these deals did not meet the client's expectations. The article gives no details.

GUMBEL, P. 2004. Au Revoir, Les Jobs. Time Europe, online edition. (Oct. 3).

From the article. Moving the workforce to cheaper lands is all the rage, but that makes unions and politicians anxious. The French government is trying to stall "offshoring." But can it really stop jobs from going abroad? And should it?

HALLEZ, F. 2004. Global Sourcing and ICT Offshoring: The Approach of Siemens Business Services. The EU-U.S. Joint Seminar on Offshoring of ICT Services and Related Services, Brussels, Belgium (Dec.).

From Europa Employment Analysis Web page. In the framework of the EU-US co-operation, a joint seminar with experts from the EU Member States and the US Department of Labor on offshoring of ICT and related services was held in Brussels from 13-14 December 2004. The seminar's key conclusions were the following.

• Offshore outsourcing is here to stay (part of a global business strategy to benefit from opportunities from globalization).
• The need for new data to analyze the scale and possible impact of the phenomenon on the EU economy (from currently available data, no valid trend can be directly observed). Also the actual net benefits are much lower than expected, and, therefore, policy responses should be commensurate with the degree of uncertainty which was acknowledged.
• However, since we do not know whether this offshoring is a trend or the tip of the iceberg, we cannot ignore it.
• Best practices include more dialogue, early warning by employers, avoiding compulsory redundancies, etc.
• Among the policy options to be investigated in this context are: adaptability of workforce, early warning measures, improving social dialogue, encourage innovation and R&D, and promotion of international labor standards.

HELLOSOFT, INC. 2005. Corporate Home Page. (Available at http://www.hellosoft.com/aboutus/default.htm (Aug.).

The site provides information about this entrepreneurial IT startup, including information about its offshoring practices.

HUWS, U., DAHLMANN, S., AND FLECKER, F. 2004. Outsourcing of ICT and Related Services in the EU. European Foundation for the Improvement of Living and Working Conditions, Dublin, Ireland. (Available at http://www.euro found.eu.int).

From the report summary. Based primarily on an analysis of a body of research covering more than two decades, this report defines the scope of offshore outsourcing and the services involved. It also covers issues such as the distribution of ICT service employment in Europe, driving factors of ICT service outsourcing, and current trends in offshore outsourcing.

HUWS, U. AND FLECKER, F. 2004. Asian Emergence: The World's Back Office? IES Report 409. Institute for Employment Studies, Brighton, UK.

Description from Web site. Recent press reports suggest that 'offshore outsourcing' to Asia will have a major impact on jobs in Europe. But what is the reality underlying these developments? Drawing on 59 in-depth case studies of eWork relocation, the EMERGENCE team explores the trends and the implications for managers, workers, and policy-makers.

A.T. KEARNEY INC. 2004. The Future of Bay Area Jobs: The Impact of Offshoring and Key Trends.

The Bay Area Economic Forum, Joint Venture. Silicon Valley Network, the Stanford Project on Regions of Innovation and Entrepreneurship, and A.T. Kearney have joined to provide an in-depth regional analysis of companies in the Bay Area who choose to offshore, the reasons behind this choice, and the impact on the economy.

KENNEY, M. AND DOSSANI, R. 2004. The Impacts of Service Offshoring on Nonmetro America: Thinking About the Future. The Frederick H. Buttel Symposium at the Rural Sociological Society's 2004 Annual Meeting. Sacramento, CA (Aug.).

This paper applies various concepts about offshoring that the authors have uncovered in their work on India to the prospects for offshoring to succeed in rural locations in the United States. The portrait they paint is negative but not completely bleak. Four reasons that service operations had been moved to rural US areas are that labor costs are lower, there are fewer discipline problems compared to urban areas, land and facility costs are lower, and telecommunications has become of acceptable quality through the installation of digital branch office switching. None of these were able to hold up against outsourcing to foreign countries such as India and China. The one enduring advantage of rural America over the foreign competitors is linguistic quality and cultural similarity to the users. The jobs that were outsourced to rural America in the first place were ones that were "non-sticky", i.e., jobs that did not depend highly on that geographical location, and that made it more likely that these jobs would be lost to India or China. The authors recommend rural communities develop service activities that have a place-specific component that will make them somewhat immune to being transplanted.

KING, J. 2005. Homegrown: IT Outsourcing Options Sprout Up Across Rural America. Computerworld (March 28).

This news article describes the alternative to offshoring - outsourcing in the rural United States, where tech labor prices are reported to be as low as one-third the prices in San Francisco. The US rural workforce is college-educated and, because rents and other costs are low, wages are low. Advantages are easy access by telephone to clients, there are no time zone issues, and few if any cultural issues exist between vendor and client.

KOEHLER, E. AND HAGIGH, S. 2004. Offshore Outsourcing and America's Competitive Edge: Losing Out in the High Technology R&D and Services Sectors. Office of Senator Joseph Lieberman, United States Senate (May).

This report is an excellent introduction to the subject, especially the first half of the report, which describes the problem from a US perspective. There are strong statements about the need to collect good data. Topics include employment data for services and high-tech industries; current trends in offshoring of IT and IT enabled services; current trends in offshoring of high tech services, design, and R&D; why companies are going offshore; availability of communications and computer technologies; low-cost labor; large pool of educated labor; foreign investment and favorable business climate; time zones; international collaborations; proven and established offshore outsourcing processes; access and proximity to large markets; fiscal irresponsibility in the United States; key players in offshoring; India and China; and possible impacts of offshore outsourcing on the US economy and workforce. The last part of the paper presents a long set of potential remedies.

LOHR, S. 2004. High-End Technology Work Not Immune to Outsourcing. The New York Times (June 16).

The common wisdom is that routine IT jobs such as software programming and testing are susceptible to outsourcing but that high-skill jobs such as software architects are likely to be protected from this fate. However, the New York Times has found that Microsoft signed contracts in 2001 that has brought employees from two Indian outsourcing firms, Infosys and Satyam, to the United States to work in Microsoft facilities doing work as software architects, senior software developers, and software developers. The contracts also included work done in India by project managers, software development engineers, and software testing engineers. Microsoft has continued to grow its payroll from 34,000 to 37,000 in the past year, but it has taken other cost-cutting measures such as reducing prescription drug benefits, tightening parental leave policies, and making it more costly for employees to participate in the employee stock purchase plan.

LUXOFT, INC. 2005. (Available at http://www.luxoft.com/eng/about/info/. Accessed March).

Description from Web site. LUXOFT is Russia's largest software development outsourcing company. We provide our clients with a full spectrum of software development services performed in dedicated offshore centers or on customer sites. LUXOFT is serving global business leaders like Boeing, Deutsche Bank, Dell, IBM, and smaller companies like start-up ventures and mid-size ISVs.

MATLACK, C., KRIPILANI, M., FAIRLAMB, D., REED, S., EDMONDSON, G. AND REINHARDT, A. 2004. Job Exports: Europe's Turn. Business WeekOnline (April 19).

The report is on the prospect of loss of white-collar jobs in Western Europe because of offshoring to India, Eastern Europe, China, Africa, and Latin America. The article reports on the beginnings of attention to this issue from politicians and labor activists in Western Europe, and it discusses the benefits and pitfalls of offshoring.

MEARS, J. 2004. Jobs at Risk. Network World (July 5) 31.

The article discusses jobs at risk and job opportunities for Americans. Jobs most at risk are those that are repetitive and commoditized such as application programming, database management, technical support, and data entry. According to Forrester Research, vendors are expanding offerings, especially in the business process outsourcing area, implementation of packaged applications, and remote monitoring and administration of infrastructure. There are new opportunities for US workers who can relate technology to business needs and have the technical knowledge to do the integration such as software architect and project manager.

MOORE, S. AND MARTORELLI, W. 2004. Midyear 2004 Update: North American Offshore Outsourcing. Forrester (July 14).

From Forrester. US companies continue to move ahead - quietly - with their outsourcing plans for the second half of 2004. Key drivers are continuing cost pressures at home, the great opportunities for cost savings by offshoring software maintenance, increased recognition of the value of offshoring to quality of work and time to market mitigated risks through improved project management and relationship management capabilities, maturation of BPO suppliers, and greater opportunities to offshore through the firm's incumbent providers. Because service-providing companies such as IBM and Accenture are increasing their global presence, the leading service outsourced is custom application development. In many cases, companies are cutting back on local contractors through offshoring, not cutting internal staff; or they are asking their suppliers to use an offshoring component to reduce costs. Software vendors are accelerating offshoring of R&D. India remains the primary destination for offshoring, to develop alternate labor supplies in other low-wage countries. Profit margins for Indiana companies are being threatened by competition. This is likely to lead to market competition. US protectionist legislation is likely to have little impact, except for the L-1 visa reform. Canada and Mexico continue as good near-shore alternatives, and China remains the principle long-term threat to India. Forrester recommends keeping up with the trends in the marketplace, look for value not just price, don't be fooled by creative pricing, pay attention to vendor retention policies, lower risk through centralized governance practices, keep up with laws and regulations, avoid China for now, and consider nearshore outsourcing.

NATIONAL ASSOCIATION OF SOFTWARE AND SERVICE COMPANIES AND EVALUESERVE 2003. The Impact of Global Sourcing on the US Economy. Evalueserve (Oct. 9).

From NASSCOM MediaRoom Web site: The report highlights how the US economy will see significant benefits from global sourcing. Mr. Kiran Karnik, President of NASSCOM said, "The report was commissioned by NASSCOM to help understand the impact of information technology and increased globalization on the US economy. A comprehensive analysis of economic parameters such as GDP, productivity, and income levels was carried out to arrive at the projections." The report outlines the cost-savings and increased flexibility that global sourcing will provide to US companies, thereby keeping them competitive in the global marketplace.

NIEDERMAN, F. 2004. IT Employment Prospects in 2004: A Mixed Bag. Computer (Jan.) 69-77.

This survey article gives a balanced account of the current IT employment picture in the United States. It discusses such topics as the shrinkage in the IT workforce between 2000 and 2003; an analysis of total demand for IT work worldwide including in the analysis such factors as increased productivity in software development, product and service innovations, aging of the workforce, the shift to contract work; global competition for IT work and its effects on wages in the United States; the educational pipeline and the effect of perceived less attractive career opportunities and problems with visas for foreign students; selective hiring practices in today's markets and the prospect for worker shortages in the future; offshoring; L-1 visas and insourcing; and some comments about worker conditions such as burnout. The forecast for 2004 notes some renewed demand for IT workers that may or may not be offset by productivity gains; continued migration of jobs to India, China, and other countries; a segregated IT market with prospects for workers different in the IT-producing companies, outsourcing contract recipients, and non-IT-producing companies; and few ways of mitigating risks of unemployment for individual IT workers.

OVUM, INC. 2005. Renault Gives the French Outsourcing Market a Kick-Start. (Available at http://www.ovum.com/outsourcing/ovumc2.asp Accessed July).

From the Web site. Car manufacturer Renault recently awarded three independent outsourcing contracts to Atos Origin, HP, and CSC for an aggregated value of euro 586.5 million. This deal marks a change in the way outsourcing is purchased and supplied in France.

OXFORD INTELLIGENCE and IBM, 2004. Investment Strategies and Location Benchmarking Study: Shared Service Centres for Europe, Part 2 (Feb.).

From the Oxford Intelligence Web site. The first section presents the findings of the Oxford Intelligence company survey regarding corporate executives' perceptions of the most important and key emerging shared service centers servicing the European theatre. The second section provides a top-line regional benchmarking analysis of 26 locations in Western Europe, Central and Eastern Europe, India, Malaysia, the Philippines and South Africa. The data collection, analysis, and development of the location benchmarking model were undertaken by IBM-Plant Location International (IBM-PLI).

PARKER, A. 2004. Mapping Europe's Offshore Spending Impact. Forrester 7 (July).

The article provides an analysis of offshoring in Europe. Offshoring will continue to grow rapidly in Europe with the United Kingdom the largest client country and India the overwhelming supplier. France and Germany will look increasingly to nearshore options such as Spain, the Czech Republic, Russia, and Tunisia. These results are based on interviews of 247 user company executives and 19 offshore providers. Offshoring is threatening Europe's own IT service providers. Forrester projects flat or declining revenues, strong pressure on service pricing, and little opportunity for technology-led business growth. Application services, call centers, and BPO are all being outsourced. What is outsourced from Europe will track what is outsourced from the United States, but Europe will choose different geographic locations for its vendors. Ireland and the United Kingdom will do the most offshoring, Benelux and Scandinavia will increase its offshoring, Germany and France will move slowly because of politics and trade unions, and southern Europe will be providers as well as buyers. France will turn away from India to other French-speaking countries. Other nearshore suppliers and China will be increasingly important. The big open question is what effect the politicians and trade unions will have in disrupting this pattern.

REINGOLD, J. 2004. Into Thin Air. Fast Company (April) 76.

This article takes a sympathetic look at the US workers who have lost jobs and who believe that their jobs were lost to offshoring. The article contains a number of personal stories. One of the main sites for complaining about jobs lost to outsourcing is YourjobisgoingtoIndia.com. The Trade Adjustment Assistance Reform Act of 2002 gives federal aid to people whose jobs have been moved overseas but the legislation was targeted at manufacturing jobs and most IT workers are not eligible; a group of former IBM programmers initiated a class action suit in January 2004 against the government to broaden the eligibility to include them. In an August 2003 report by the McKinsey Global Institute, it is noted that 31% of workers who lost their jobs in earlier waves of offshoring never were fully reemployed and 80% took wage cuts. Some cities are hit more by offshoring than others. One example is Colorado Springs, CO, where Agilent did extensive offshoring. Multinational companies are doubly worried about the public relations issues of offshoring: angry at home over lost jobs, angry about offending large markets if they pull back.

ROLAND BERGER STRATEGY CONSULTANTS AND UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT 2004. Service Offshoring. (June).

The authors surveyed more than 100 top-level executives from the European top 500 companies about offshoring strategies. They found that about 40% of the companies had already offshored some work, and most of them were planning to do more offshoring. Almost 50% had done no offshoring and had no plans to do so. The United Kingdom accounts for almost two-thirds of all service jobs offshored from Europe. 80% are satisfied with their offshoring experience, 3% dissatisfied. High-cost countries, including Germany, France, Austria, and Switzerland had the highest satisfaction rates. Cost savings are the main driver, and typically run between 20 and 40%. The most common offshoring tasks are finance, accounting, IT support, and human resources services. Captive and entrepreneurial offshoring were about equally common. The destination for work is most often the United Kingdom, Ireland, Spain, Portugal, Poland, Hungary, and Romania, and India for jobs including large numbers of workers. Many European companies do not believe the US model of offshoring works for them given labor conditions, diversity of culture, and language issues.

ROLAND BERGER STRATEGY CONSULTANTS 2004. Global Footprint Design: Mastering the Rules of International Value Creation. Munich, Germany.

From the Web site. The Rhineland-Westphalian Technical University (RWTH) in Aachen examines offshoring practices in German industry.

• 90 percent of German industrial companies are planning further offshoring in the next five years.
• Two thirds of them believe the quality of production abroad is as good as or better than that in Germany.
• 13 percent are already transferring complex technical systems, and the number is increasing.
• 71 percent of smaller companies (with sales of up to EUR 100 million) will manufacture abroad five years from now.

Four distinct globalization strategies are identified. The trend for German industry to transfer operations abroad is accelerating; 90 percent of German companies plan to withdraw production capacity from Germany in the next five years. Most of it will go to Eastern Europe or Asia. 67 percent of industrial companies reckon that the quality of production abroad is now as good as or better than what they find in Germany. Fully 13 percent of companies are already moving complex systems and technologically-sophisticated components to locations outside Germany. Small and medium-sized enterprises in particular are poised to plunge into a wave of internationalization. 71 percent of companies with annual sales of under EUR 100 million also intend to launch production operations outside Germany within five years. These are the key findings of a study conducted jointly by Roland Berger Strategy Consultants and the Laboratory for Machine Tools and Operational Studies (WZL) at the Rhineland-Westphalian Technical University (RWTH), Aachen.

SASAKI, T. (2004). Upgrading of IT-Based Services: Trends, Challenges, and Policy Implications. UNCTAD-ASEAN Seminar on Service FDI and Competitiveness in Asia, Kyoto, Japan (March.)

The author was at the time the chief economist for the Institute for International Trade and Investment in Japan.

SCHARF, J. 2004. IT Outsourcing: Between Starvation Diet and Nouvelle Cuisine. 32nd General Assembly, Association of Foreign Banks, Switzerland (June).

This slide presentation provides some basic information about the status of outsourcing work sent out of Germany and, to some extent, from the European Union. Charts include data and projections for the monetary size of the German and the European IT outsourcing markets; outsourcing contracts in insurance, financial, and banking organizations; value of outsourcing contracts to the financial services sector; and a list of offshoring regions of choice to central Europe.

SERAPIO, M. G.2004. International Outsourcing in Information Technology (IT): Trends, Developments, and Implications for Colorado. Colorado Institute of Technology (Nov.).

Although the beginning of the report provides general information about offshoring, the main value added is a survey of 40 senior executives in 34 Colorado companies in the financial services, IT consulting and services, software, computer equipment, telecommunications, and other industries. Using a technique similar to one used by Bardhan and Kroll for California, Serapio estimated that between 139,000 IT jobs and 197,000 jobs it total in Colorado were at risk due to offshoring, but that many fewer would actually be lost because of companies that are too small to offshore work, some companies that need to be close to their customers, and some companies that are engaged in work that is too dynamic to outsource. The author gives a good analysis of the limitations to the estimates.

SIDHU, I., MARVEL, M., YASSINE, A., VOJAK, B., AND HOLLIS, L. 2004. Globalization and Education. E2010 Project Report, University of Illinois Urbana-Champagne (Nov.) (Available at http://www.ge.uiuc.edu/tec/e2010/combined-report.pdf).

Over the course of six months, the authors conducted "in-depth pilot interviews with high ranking technology executives from different industries to understand the impact of globalization on the changing nature of engineering in the United States. The discussions centered on the job functions likely to be outsourced, and the skills that will be required of engineering roles likely to remain or grow in demand within the United States." The results of the interviews showed that each company emphasized skills beyond fundamental engineering theory which they maintained will become increasingly important with the continued effect of globalization. These skills primarily include 1) projects that integrate wider and more holistic thinking about product or service objectives and 2) softer skills including (global) teamwork and communication skills. This category potentially includes foreign languages and foreign exchange programs.

US GENERAL ACCOUNTING OFFICE 2004. Highlights of a GAO Forum, Workforce Challenges and Opportunities for the 21st Century: Changing Labor Force Dynamics and the role of Government Policies. Government Accountability Office GAO-04-845SP, (June 2004).

The document reports the highlights of "Workforce Challenges and Opportunities for the 21st Century Forum" hosted by the GAO on April 22, 2004. The forum brought together government officials, business and union representatives, and other workforce specialists to talk about how demographic and economic forces that are shaping the US workforce for the 21st century. Topics include the slowing growth rate of the labor force, the increasing racial and ethnic diversity, the global interdependence, the increased importance of technology and the greater emphasis on the knowledge worker, and the impact of increasing budget deficits on the ability of the federal government to continue to invest in its labor force through immigration, tax, labor, and education and training programs. Outsourcing receives brief mention in the report as a continuing issue, but the report is more important for its setting the context for understanding the US response to outsourcing in light of its changing labor situation.

WILDEMANN, H. 2005. Unternehmensstandort Deutschland Wege zu einer wettbewerbsfähigen Wertschöpfungsgestaltung, Germany.

The article discusses paths to competitive added value creation for German enterprises.