Panel Discussion on "Global Outsourcing: Threat or Necessity for U.S. Competitiveness?"

Debates for and against global outsourcing have become increasingly strident in recent months, with seemingly no consensus on the impact of this phenomenon on the US economy. There has been considerable media coverage on this matter, particularly as it becomes an important election year issue. To illustrate the various positions:

• CNN's Lou Dobbs sharply criticizes American companies sending jobs overseas, and provides a list of firms that are "Exporting America."
  http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/
• The New York Times columnist, Thomas Friedman, visits the city of Bangalore, India's hi-tech hub, and writes a series of editorials on how the growth of call-center jobs is a win-win situation for both American companies and India's young, educated workforce.
• CBS' 60 Minutes does a segment entitled "Out of India," highlighting why India has become a haven for American companies looking to cut costs by outsourcing its customer service jobs.
  http://www.cbsnews.com/stories/2003/12/23/60minutes/main590004.shtml
• Senator Charles Schumer laments the plight of displaced workers and urges President Bush to renounce his position on outsourcing of American jobs.
  http://www.senate.gov/~schumer/SchumerWebsite/...
• The lead article in the February 21, 2004 print edition of The Economist, "The New Jobs Migration" discusses how foreign competition is now affecting the services sector in ways that is reminiscent of the outsourcing of manufacturing jobs and argues that the disruption to employment patterns is exaggerated.
• A seminar organized in January 2004 by TiE, an RTP-based networking organization for Indian entrepreneurs is provocatively entitled, "Outsourcing - Savior of Western Society or a Threat?"
  http://www.tie-carolinas.org/get.cgi?News.html

Even as different observers take diverging positions on the overall merit of global outsourcing, these reports and discussions nevertheless have one theme in common. The focus has been on a single aspect of outsourcing: the migration of jobs, and in particular, the outsourcing of white-collar jobs. A few countries, notably India and China, are often targeted as the ones that are displacing American workers by offering cheap labor. The intense attention on the outflow of work to overseas locations has generated fear about which jobs will be outsourced next. On his website, Senator Schumer has a memo which begins: "Journalists could see their jobs go overseas as well; Reuters recently announced plans to hire reporters in India to cover the US financial sector."

While it is understandable that job losses receive such scrutiny, given the direct bearing it has on the economy and the immediate effect on the lives of displaced workers, it is necessary to deepen our understanding of the issues of outsourcing in order to separate fact from fiction. One way to comprehend the multifaceted nature of global outsourcing is to examine its impact on a diversity of industries in a specific location. North Carolina, with its unique mix of industries, from IT and biotechnology centered around the Research Triangle Park, to the traditional sectors of apparel, textiles, furniture and hog farming, is a microcosm of trends observed in the rest of the country. It is important to keep in mind that although white-collar job loss in the IT industry has brought this issue to the forefront, it is far from being new to the apparel, textiles and furniture industries in North Carolina that have felt the consequences of global outsourcing for at least a decade. As the state grapples with a series of downsizing moves, it is faced with concerns regarding the retraining of laid-off workers while at the same time encouraging companies to remain innovative and maintain their competitive edge.

Global outsourcing and job migration raise several critical policy questions. How can the state best respond to job losses? Re-training is no longer a simple answer. We need to look more closely at the existing educational infrastructure in the state and local attempts towards skill development. Furthermore, North Carolina, like other states experiencing industrial change, consists of both winners and losers. Even as there is a flight of jobs overseas, several leading companies have located their main R&D facilities in RTP. Global outsourcing is a response by corporations to improve productivity and increase efficiency. Given that there are different interests represented by workers, corporations and trade unions, policy makers have to consider various constituencies in framing appropriate policies.

To promote broader dialogue on this issue at Duke and elsewhere, we have put together a panel that consists of academics, industry representatives and policy makers to unravel the complex dynamics behind global outsourcing. Some of the key questions we wish to address are:

• Is global outsourcing inevitable and irreversible?
• How much scope do policy makers have in supporting US jobs while at the same time promoting innovation?
• Are companies that outsource "Benedict Arnold CEOs" or is global outsourcing the only way for corporations to remain competitive?
• Do we need a new societal "New Deal" that will adequately address the concerns of workers, union leaders, and corporations?
• Is outsourcing a direct outcome of America's addiction to low prices?
• What kinds of skills are marketable in this fragile economy? How does one train a workforce for the 21st century?