Follow the Intellectual Property, How does Industry pay Programmers' Salaries when they move the related IP rights to offshore taxhavens?"

In the ongoing discussion about offshoring in the computer and data-processing industries, the 2006 ACM report Globalization and Offshoring of Software addressed job shifts due to globalization in the software industry. But jobs represent only half of the labor and capital equation in business. In today’s high-technology industries, intellectual property (IP) supplies the other half, the capital complement. Offshoring IP always accompanies offshoring jobs and, while less visible, may be a major driver of job transfer. The underlying economic model—involving ownership of profits, taxation, and compensation of workers from the revenue their products generate—has not been explicated and is largely unknown in the computer science community. This article presents the issue of software income allocation and the role IP plays in offshoring. It also tries to explain why computer experts lack insight into the economics of software, from investments made, to profits accumulated, to capital becoming available for investment in new projects and jobs.Offshoring, offshore outsourcing, tax havens, job loss, intellectual property, tax avoidance, non-routine profits

Flexible Global Software Development (GSD): Antecedents of Success in Requirements Analysis

Globalization of software development has resulted in a rapid shift away from the traditional collocated, on-site development model, to the offshoring model. Emerging trends indicate an increasing interest in offshoring even in early phases like requirements analysis. Additionally, the flexibility offered by the agile development approach makes it attractive for adaptation in globally distributed software work. A question of significance then is what impacts the success of offshoring earlier phases, like requirements analysis, in a flexible and globally distributed environment? This article incorporates the stance of control theory to posit a research model that examines antecedent factors such as requirements change, facilitation by vendor and client site-coordinators, control, and computer-mediated communication. The impact of these factors on success of requirements analysis projects in a “flexible” global setting is tested using two quasi-experiments involving students from Management Development Institute, India and Marquette University, USA. Results indicate that formal modes of control significantly influence project success during requirements analysis. Further, facilitation by both client and vendor site coordinators positively impacts requirements analysis success

Follow the Intellectual Property, How does Industry pay Programmers' Salaries when they move the related IP rights to offshore taxhavens?"

In the ongoing discussion about offshoring in the computer and data-processing industries, the 2006 ACM report Globalization and Offshoring of Software addressed job shifts due to globalization in the software industry. But jobs represent only half of the labor and capital equation in business. In today’s high-technology industries, intellectual property (IP) supplies the other half, the capital complement. Offshoring IP always accompanies offshoring jobs and, while less visible, may be a major driver of job transfer. The underlying economic model—involving ownership of profits, taxation, and compensation of workers from the revenue their products generate—has not been explicated and is largely unknown in the computer science community. This article presents the issue of software income allocation and the role IP plays in offshoring. It also tries to explain why computer experts lack insight into the economics of software, from investments made, to profits accumulated, to capital becoming available for investment in new projects and jobs

Everywhere and nowhere: Nearshore software development in the context of globalisation

Offshore software outsourcing, a major contributor to globally distributed work (GDW), has been identified as one of the most striking manifestations of contemporary globalisation. In particular, offshoring resonates with influential views that suggest that ICTs have rendered location irrelevant. Some research, however, has questioned this “placeless logic” and suggested that location may be significant to the success of offshoring ventures. In this paper, we draw on evidence from two nearshore software development ventures in the Caribbean to identify a number of locational characteristics relating to the physical, economic and cultural setting, local resources and government policy that may be important in influencing the suitability of offshore outsourcing venues. Some of these are recognised, even by companies pursuing placeless location strategies, while others were unanticipated. The cases also suggest that companies may be able to actively shape certain characteristics to their advantage. Implications for vendors and clients of nearshore information services, and potentially also for companies considering offshore ventures in non-traditional locations, are identified

Globalization and the Flattening of the World: A Book Review of “The World is Flat”

There is no doubt the world is changing. In cultures, in politics, and in economies, increased awareness of foreign and domestic practices has become a focal point of society. Trade has always proven beneficial to a nation due to the laws of absolute and comparative advantage, but in the modern world, international relations go beyond the boundaries of exchanging products. Now, services and collaboration are added to that realm. In his book “The World is Flat,” Thomas Friedman pinpoints the history and future of globalization in economics. Highlighting how globalization has made the world “flat” by allowing fair competition between large and small companies, corporations and individuals, and countries and continents, Friedman gives insight into how the world has changed because of innovation and history colliding at the right time

Innovation Offshoring:Asia's Emerging Role in Global Innovation Networks

Most analysts agree that critical ingredients for economic growth, competitiveness, and welfare in the United States have been policies that encourage strong investment in research and development (R&D) and innovation. In addition, there is a general perception that technological innovation must be based in the United States to remain a pillar of the American economy. Over the past decade, however, the rise of Asia as an important location for "innovation offshoring" has begun to challenge these familiar notions. Based on original research, this report demonstrates that innovation offshoring is driven by profound changes in corporate innovation management as well as by the globalization of markets for technology and knowledge workers. U.S. companies are at the forefront of this trend, but Asian governments and firms are playing an increasingly active role as promoters and new sources of innovation. Innovation offshoring has created a competitive challenge of historic proportions for the United States, requiring the nation to respond with a new national strategy. This report recommends that such a strategy include the following elements: output forecasting techniques ... Improve access to and collection of innovation-related data to inform the national policy debate; Address "home-made" causes of innovation offshoring by sustaining and building upon existing strengths of the U.S. innovation system; Support corporate innovation by (1) providing tax incentives to spur early-state investments in innovation start-ups and (2) reforming the U.S. patent system so it is more accessible to smaller inventors and innovators; and Upgrade the U.S. talent pool of knowledge workers by (1) providing incentives to study science and engineering, (2) encouraging the development of management, interpretive, cross-cultural, and other "soft" capabilities, and (3) encouraging immigration of highly skilled workers.Innovation Networks, Innovation Offshoring, Asia

The Accounting Industry in the Age of Globalization and Offshore Outsourcing

The phenomenon of outsourcing has engulfed the accounting industry and offers a wide range of services from bookkeeping, accounts payable, debt collection, invoicing, to tax return preparation. As companies become more comfortable with the services provided by outsourcing facilitators, the level of outsourcing in the accounting industry will increase to allow U.S. firms to focus on higher margin services and meet client demands in more technical areas of tax, estate, and retirement planning. This research uses a survey to collect primary data focusing on three areas, namely outsourcing drivers, concerns stakeholders have about outsourcing, and the perspectives about the offshorability of specific functions. The study concludes that firms that are engaging in outsourcing activities realize benefits in and ease their perceptions about doing so. Firms who outsource have been able to cut costs and increase staff. These same firms also are less concerned about most of the issues (privacy, client relationships, etc.) which may be as a result of their positive experience with outsourcing activities. Furthermore, these firms also have a higher confidence about the outsourecability of most of the functions in the accounting industry. The study further presents policy implications to all stakeholders in the accounting industry: students, professors, accounting professionals and firms, regulatory bodies, and politicians

Sending Jobs Overseas: The Cost to America’s Economy and Working Families

[Excerpt] This report was created by Working America and the AFL-CIO as a companion piece to Work­ing America’s Job Tracker, a ZIP code –searchable database of jobs exported (as well as Occupational Safety and Health Act violations and other work­place issues). Users can search their area for com­panies that have sent jobs overseas. Though Job Tracker is one of the largest publicly available, fully searchable records of the extent and specifics of outsourcing, it only reveals the tip of the iceberg. This report and Job Tracker contextualize each other—Job Tracker by mapping specific job losses due to outsourcing, the report by taking a broad view of the national-level numbers that are avail­able and offering case studies of key industries

Offshoring (or Offshore Outsourcing) and Job Loss Among U.S. Workers

[Excerpt] Offshoring, also known as offshore outsourcing, is the term that came into use more than a decade ago to describe a practice among companies located in the United States of contracting with businesses beyond U.S. borders to perform services that would otherwise have been provided by in-house employees in white-collar occupations (e.g., computer programmers and systems designers, accounting clerks and accountants). The term is equally applicable to U.S. firms’ offshoring the jobs of blue-collar workers on textile and auto assembly lines, for example, which has been taking place for many decades. The extension of offshoring from U.S. manufacturers to service providers has heightened public policy concerns about the extent of job loss and the adequacy of existing programs to help unemployed workers adjust to the changing mix of jobs located in the United States so they can find new positions

Globalization: threat or opportunity for the U.S. economy?

Presentation to Hawaii Society of Investment Professionals, Honolulu, HI, April 29, 2004Globalization ; Free trade