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

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

The offshoring of financial services : a reassessment

Operating in increasingly competitive market environment, financial services companies are engaged in international re-engineering of business processes mirroring developments in manufacturing over the past four decades. Drawing upon interviews conducted with senior managers and partners from two leading international banks, a multinational 'consumables' provider and a leading finance consultancy, as well as extensive published surveys, we examine the distinctive 'anatomy' of offshoring in financial services, and industry which also manifests a high degree of geographical concentration for 'higher order' functions. We conclude that the reality of process re-engineering in the sector has frequently failed to meet business objectives, and has run the risk of creating 'backlash' from employees in both home and host environments

Intellectual Property Rights and South-North Formation of Global Innovation Networks

With the rise of the knowledge economy; delivering sound innovation policies requires a thorough understanding of how knowledge is produced and diffused. This paper takes a step to analyze a new form of globalization; the so-called system of Global Innovation Networks (GINs); to shed light on how the protection of intellectual property rights (IPRs) influences their creation and development. We focus on the role of IPR protection in fostering international innovative activities in emerging economies (South); such as China and India; and more generally; how IPRs affect the development of GINs between newly industrialized countries and OECD countries. Using both survey-based firm-level and country-level global data; we find IPRs to be an important determinant of participation in GINS from a Southern perspective. We find IPR protection at home and its harmonization across county pairs foster South-North formation of GINs. We also find that a stringent regime in the destination country discourages foreign international innovative activities that originate in NICs. Both levels of our analysis confirm the ICT industry; particularly the hardware segment; to rely on IPRs when engaging in the international outsourcing and offshoring of innovation or in patenting activities abroad.Gravity Model; Information Communication Technology; Innovation; Intellectual Property Rights; International collaborations; Networks

Report on the State of Available Data for the Study of International Trade and Foreign Direct Investment

This report, prepared for the Committee on Economic Statistics of the American Economic Association, examines the state of available data for the study of international trade and foreign direct investment. Data on values of imports and exports of goods are of high quality and coverage, but price data suffer from insufficient detail. It would be desirable to have more data measuring value-added in trade as well as prices of comparable domestic and imported inputs. Value data for imports and exports of services are too aggregated and valuations are questionable, while price data for service exports and imports are almost non-existent. Foreign direct investment data are of high quality but quality has suffered from budget cuts. Data on trade in intellectual property are fragmentary. The intangibility of the trade makes measurement difficult, but budget cuts have added to the difficulties. Modest funding increases would result in data more useful for research and policy analysis.

Intellectual Property Rights and South-North Global Innovation Networks

This paper explores the role of IPR protection in the emergence of R&D linkages from newly emerging economies. Using data from a new survey on Chinese and Indian firms in the ICT sector, we find IPR protection to be key in the engagement of Southern firms in global innovation networks. A complementary exercise uses global bilateral patent data to investigate the location-specificity of IPR enforcement for this phenomenon. We find that a stringent IPR regime in the North (South) discourages (encourage) foreign patenting activities of firms in the South, suggesting that a global convergence of IPRs can stimulate Southern innovation.

Intellectual Property Rights and South-North Formation of Global Innovation Networks

With the rise of the knowledge economy, delivering sound innovation policies requires a thorough understanding of how knowledge is produced and diffused. This paper takes a step to analyze a new form of globalization, the so-called system of Global Innovation Networks (GINs), to shed light on how the protection of intellectual property rights (IPRs) influences their creation and development. We focus on the role of IPR protection in fostering international innovative activities in emerging economies (South), such as China and India, and more generally, how IPRs affect the development of GINs between newly industrialized countries and OECD countries. Using both survey-based firm-level and country-level global data, we find IPRs to be an important determinant of participation in GINS from a Southern perspective. We find IPR protection at home and its harmonization across county pairs foster South-North formation of GINs. We also find that a stringent regime in the destination country discourages foreign international innovative activities that originate in NICs. Both levels of our analysis confirm the ICT industry, particularly the hardware segment, to rely on IPRs when engaging in the international outsourcing and offshoring of innovation or in patenting activities abroad.Gravity Model, Information Communication Technology, Innovation, Intellectual Property Rights, International collaborations, Networks

Drivers of the Offshore Outsourcing of R&D: Empirical Evidence from French Manufacturers

The pace of technological change and the challenges faced by companies to remain competitive in global markets have contributed to a global expansion of R&D transactions. This paper shows that French companies engaged in the offshore outsourcing of R&D are outward oriented essentially through exports. Further, single unit companies seem more active in this type of R&D transaction than companies belonging to a group. These findings suggest a stronger integration of small and medium size exporting companies into international networks of innovation. Technological sourcing seems to be leading this phenomenon more than cost-opportunities motivations.R&D Outsourcing, Offshore of Research and Development Activities, Globalization.

Asia-Pacific Trade and Investment Review

This book reviews latest trends in trade and investment policy issues facing Asia-Pacific region.Trade, Foreign Direct Investment, Financial Crisis, Environment, Agricultural Trade Liberalization, WTO