Innovation and Production Offshoring: Implications on Welfare

I theoretically analyze the effects of a strengthening IPR protection and an improvement of technology of innovation of offshoring on the rate of innovation offshoring, rate of imitation, rate of innovation, relative wages, real wages and domestic welfare. A North-South dynamic general equilibrium model of trade with endogenous imitation and innovation and production offshoring is constructed. To trade with lower Southern wages, Northern firms confront the problem of information leakage to the Southern firms and monitoring costs if they do offshore innovation and production. The model predicts that a strengthening of IPR protection decreases the rate of innovation and the rate of imitation but increases the rate of innovation offshoring. Northern real wages also decrease with a strengthening of IPR protection but Southern real wages increase. It may hurt the North but benefit the South. An improvement in technology of innovation offshoring increases the rate of innovation, the rate of imitation and the rate of innovation offshoring. Northern relative real wages decrease with such improvement but Southern real wages increase. It may benefit the North and the South.offshoring, innovation, information leakage, productivity gap, welfare, trade policies

Unraveling the success of India’s IT-ITES industry: Can India sustain this success?

India has established itself as a global leader in the Information Technology-Information Technology Enabled Services (IT-ITES) offshoring industry. Different factors have been responsible for India’s success. In this paper we examine the success of India’s IT-ITES industry from multiple lenses to present a holistic view. Research frameworks from the Information Systems and International Business literature are reviewed to understand the factors that led to the success of Indian IT-ITES industry since the emergence of offshoring. To develop a deeper understanding of the success of India’s IT-ITES industry and provide guidelines for the future, we use International Trade theory to explain what happened before the emergence of offshoring that led to the development of the Indian IT-ITES industry. The multidimensional view presented in the paper helps understand the bigger picture in the context of the offshoring phenomenon

Application of Ethical Frameworks to IT Offshoring

The global outsourcing of information technology (IT) activities, has received increased attention recently, given the controversy it generates. Differing views on IT offshoring prevail. One view claims IT offshoring steals jobs away from the United States economy, while another view maintains IT offshoring creates jobs and improves the overall Unites States economy. Despite the controversy created by IT offshoring, the ethical issues related to IT offshoring have received little attention. In this paper three major normative theories of business ethics: stockholder, stakeholder, and social contract theory will be introduced to examine the impact of IT offshoring from an ethical perspective. The application of these theories to a specific example of IT offshoring is presented in detail. This research represents an early attempt to examine the ethics of IT offshoring and could provide early insights into the IT offshoring decision

Global Accounting Standards And Curriculum

Offshoring of technology jobs and its adverse economic effects on the U.S. economy are making daily headlines.  Globalization of economy and advances in information technology have accelerated offshoring to low labor cost countries like China and India.   The latter have the advantage of abundant educated manpower, low labor cost and high entrepreneurial spirit.  However, just as globalization is taking lower-value jobs overseas, it is also creating markets for higher-value U.S. services and goods in those countries.  Development of global accounting standards could further accelerate offshoring of jobs in financial services.  It is time that business schools prepare their graduates to face the challenge through appropriate curriculum changes

Managing IT offshoring projects: an IT governance approach

IT offshoring is often carried out by different stakeholders with different working practices in complex and highly politicized settings, creating team boundaries between the stakeholders. Therefore, IT offshoring requires significant governance and coordination across the different teams. The information technology (IT) governance literature suggest that organizations apply IT governance mechanisms to oversee and coordinate IT-related activities to ensure the attainment of business objectives. Thus, on the basis of IT governance theory, this study seeks to better understand the nature of IT governance mechanisms and how they could be effective in bridging boundaries created during IT offshoring projects. These insights would contribute to the existing IT offshoring and IT governance literature, and help organizations have better understanding on how to manage the different boundaries that may arise during IT offshoring projects in order to achieve favourable offshoring outcomes

Analyzing the Debate over Offshore Outsourcing in the Service Industry: Is there a Reason for Concern?

The United States has experienced an increase in the offshore outsourcing (offshoring) of jobs in the service industry. Although offshoring is common in the manufacturing industry, it only recently began in the service industry. The recent increase in the service industry has occurred because of new technology and the ability to access information from anywhere. Those who oppose offshoring believe it takes away American jobs, lowers wages, causes a decline in America’s standard of living, and any benefits from offshoring are unevenly distributed. Statistics on unemployment rates, mass layoffs, the trade deficit, GDP, and wage rates are analyzed to show that overall, offshoring in the service industry has not negatively affected the United States. Currently, offshore outsourcing in the service industry has a net benefit to society and there is no reason for concern

Mapping the Global Offshoring Network Through the Panama Papers

Proceedings of the International Conference on Information Technology & Systems (ICITS 2018). Libertad City, EcuadorThis works maps the offshoring network between regions and countries worldwide through the Panama Papers. The Panama Papers 2016 divulgence is the largest leak of offshoring and tax avoidance documentation. The leaked documents contain 2.6 TB of information involving more than two hundred thousand of enterprises in more than two hundreds countries. Using the Offshore leaks database we related entities around the world through different types of relationships. These relationships were used in order to build an offshoring network at countries and geographical regions scales. The network is characterized and described using chord diagrams to map the intra and inter relation between the countries and regions, discovering which of them are the more prominent in the worldwide offshoring scenario.This work was funded by UAM-Santander CEAL-AL/2017-08, and UDLA-SIS.MG.17.02

Vicious and virtuous circles of offshoring attitudes and relational behaviours. A configurational study of German IT developers

Prior research has shown that the success of offshoring is affected by relational behaviours of the employees involved in an offshoring collaboration. However, hardly anything is known about the attitudes that onshore colleagues hold towards offshoring, and how such offshoring attitudes affect relational behaviours towards offshore colleagues. We therefore present an interpretivist, qualitative case study that explores the offshoring attitudes of German information technology developers. We found that offshoring attitudes affected relational behaviours towards Indian offshore colleagues, in terms of (1) treating Indian colleagues as fellow team members as opposed to suppliers; (2) spending more or less effort in communication and knowledge transfer; and (3) supporting vs. avoiding the task transfer. These relational behaviours fed back into participants' offshoring attitudes, leading to vicious and virtuous circles. The circles created two contrasting configurations of offshoring attitudes and relational behaviours, driven by opposing forces within the departmental context. Our findings highlight the value of taking a configurational perspective for understanding offshoring success and for identifying drivers that need to be managed in order to achieve favourable configurations. We suggest that future research should further expand the typology of attitude-behaviour configurations and could apply theories of efficacy, self-reinforcing spirals and planned behaviour

Exploring political risk in offshoring engagements

This research focuses on the analysis of political risk in the context of offshoring decisions. The study uses the Repertory Grid Technique, which entails a series of semi-structured interviews exploring key political risk experiences across offshoring engagements. The research extends the spectrum of political risk analysis in the context of offshoring engagements, and explores the varied impact of political risk across business activity types. The research identifies five key political risks affecting offshoring engagements and highlights the moderating effect of specific offshoring activity types Business Process Outsourcing, Information Technology Outsourcing or Knowledge Process Outsourcing on political risk implications. The research explores the conditioning effect of activity specific exposure to political risk and enhances the explanatory ability of the Transaction Cost Economics constructs, offering a novel operationalisation of the political risk component of external uncertainty. From a practical perspective, the research highlights the need for developing managerial tools to improve monitoring and identification of risks. The key practical contribution is the development of differentiated political risk typologies that can capture the nuances of external risks in offshoring, allowing for more accurate risk assessment of offshoring decisions

Information Technology Offshoring: Prospects, Challenges, Educational Requirements, and Curriculum Implications

Offshore provision of information systems/information technology-related services has been growing rapidly in recent years and seems firmly set to continue. This trend is fueled by the many advantages of offshore service procurement; however, there are dangers in this practice. Furthermore, offshoring requires adaptation of the IS function and IS management. This in turn suggests modifications of IS curricula in order to prepare graduates for the new environment. The advantages of offshoring are those of outsourcing in general: allowing the organization to focus on its core activities and cost savings. The main dangers include loss of business intelligence and reliance on remote suppliers who may suffer a major failure. The loss of jobs due to offshoring also introduces political considerations. Offshore operations are generally supervised by an organization’s CIO. This management responsibility requires awareness of cultural and legal differences and of risks associated with offshoring and outsourcing in general. Offshoring has an effect on job opportunities for graduates of information systems programs. The number of some jobs will shrink, but new positions with new responsibilities are likely to emerge. Training students to function in an environment of offshored operations will introduce new IS specializations and require adaptation of IS curricula; a framework for considering modifications is suggested