Tuesday, September 30, 2014

Globalization of the ICT Labour Force (Blog Post Week 5)

William Lazonick’s article, “Globalization of the ICT Labour Force”, details how offshoring has evolved over the past few decades. Throughout the manufacturing and production industries, there is a continuous search for low-wage labor; therefore, companies are willing to go to great extents to save money. The United States has been engaging in large-scale offshoring of job for the past five decades in search of hardworking, low-wage labor to perform low-skill work. Semiconductor assembly companies in the 1970s found that the hourly wage in East-Asian countries was less than one tenth than that in the United States. This reduction in labor expenses was hard to resist and companies increased productivity as they moved overseas, specifically information and communication technology (ICT) companies. More recently, the search has switched to low-wage labor to perform high-skill work. Engineering and programming jobs are sent abroad; something we never thought would be a high-tech industry outside of the United States due to the education in low-wage developing economies. This article details the strategy to develop East-Asian nation in communication and education infrastructures and how it interacts with the investment strategy of US-based ICT companies to produce high-skill ICT labor. 

One of the major concerns with this globalization development was that young minds would come to the United States and get educated or be well educated in their home country due to the investment in high-tech education, but then find that the best career path for them would be in the United States and not in their low-wage developing country. This danger of the ‘brain drain’ was seen as threatening to the global expansion plan of ICT companies. The challenge was to create attractive domestic employment opportunities in countries overseas in hopes to turn the ‘brain drain’ into a ‘brain gain’. The goal was to get people to not go abroad to get educated and for careers in the first place. The article goes on to detail three cases – Motorola in Korea, Intel in Malaysia, and Texas Instruments in India – that do just that; generating domestic job capabilities for the well educated labor force by investing in education, upgrading government strategies, and being innovative when developing enterprises.

Written by William Lazonick, “Globalization of the ICT Labour Force” was published as a chapter in The Oxford Handbook of Information and Communication Technologies in February 2007. The author, William Lazonick, has his Ph. D in Economics from Harvard University and is a professor at the University of Massachusetts Lowell. This shows credibility and that his ideas are well thought out and researched. Other published pieces of his include, Sustainable Prosperity in the New Economy?: Business Organization and High-tech Employment in the United States and Entrepreneurial Ventures and the Developmental State: Lessons from the Advanced Economies. Because this is a scholarly article the audience is most likely students and researchers who have sought out this article and show interest in the topic. This is not a light read that you would stumble upon while casually searching the web. The audience is willing to read in-depth for details and the main argument of the article. The negative reaction to this work comes from those who believe that outsourcing is hurting the United States and our domestic economy. However, most positive reviews come from those who see developing the economies of low-wage, low-skill countries as benefiting both them and us as a high-wage, high-skill country.  

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