GOVERNMENT INVESTIGATES INNOVATION OFFSHORING

The Department of Commerce is also concerned about the offshoring of knowledge work and innovation. In 2004 it conducted a six-month study, based on expert testimony, on "the extent and implications of workforce globalization in knowledge-based industries such as life sciences, information technology, semiconductors and financial services." Recenty released, it can be found here.

The study reaches the following conclusions:

- The U.S. business climate, large consumer markets, and a formidable research and university system remain magnets for business activity and continue to attract leading scientific and technical talent to these knowledge-based industries.

- The U.S. companies that were surveyed generally tap labor pools in other countries for specific segments of their operations, rather than the entire value chain of work.

- U.S. companies aredividing business processes into smaller discrete elements-rather than the traditional divisions of research, production, and marketing. This allows them to outsource pieces within a larger business process.

- While India and China are attempting to develop national science and technology
education systems that meet international standards, they face obstacles in creating such systems.