Washington, DC, March 24, 2004—AeA’s new paper, "Offshore Outsourcing in an Increasingly Competitive and Rapidly Changing World," finds that offshore outsourcing is just one part of today’s dramatically changing and increasingly competitive world. Therefore, offshore outsourcing cannot be viewed in isolation. The report acknowledges that although offshore outsourcing is exaggerated as the primary cause of lost jobs, the report does acknowledge that some people will be hurt.

The paper provides data and analysis on a number of issues:

1. The magnitude of offshore outsourcing is unknown.
2. A weak international and domestic economy and productivity improvements are the primary cause of the lost jobs over the last three years—not outsourcing.
3. Changes in the international marketplace are posing far more significant new competitive challenges for U.S. companies than is offshore outsourcing.
4. The United States experienced a similar anxiety to offshore outsourcing in the late 1980s and early 1990s when there was a common view that Japan was going to take over the world. It didn’t.
5. We should not forget that the United States remains an immensely attractive location for foreign direct investment and insourcing by foreign companies, employing millions of Americans.
6. Although some people will be hurt, offshore outsourcing is likely to be a long-term benefit for the United States.
7. If protectionist legislation should emerge from the states or Congress, high tech, as the largest exporter, stands to lose the most.

The paper shows many countries have caught up with the United States, particularly in education. Over the long run, that may be the single biggest competitive challenge.

"Today's world is increasingly more competitive. Given the intense competition, many of the companies that outsource jobs overseas usually have no alternative as that is exactly what their competitors are doing. Failure to do so will result in an even greater loss of jobs than would be lost to offshoring alone," said William T. Archey, President and CEO, AeA.

"The challenges facing American high tech in the world marketplace are formidable. We believe that public policy officials at all levels, executives, and employees need to understand this rapidly changing and intensely competitive new world. In addition to providing an analysis of both offshore outsourcing and the context in which it is occurring, AeA includes a list of recommendations to address the challenges facing the United States," Archey concluded.

Get a copy: Offshore Outsourcing in an Increasingly Competitive and Rapidly Changing World