Debunking 3 myths of ‘bogeyman’ outsourcing
OUTSOURCING of services has been a persistent cause of panic and protectionism in recent years, especially in the US since the 2004 presidential election.
Back then, the Democratic candidate, Senator John Kerry, upon hearing that digital x-rays had been outsourced from Massachusetts General Hospital in Boston for examination by radiologists in India, denounced firms that outsourced as Benedict Arnolds, the most infamous traitor in US history.
Kerry’s misstep was followed by alarm over outsourcing across the West. If free trade is to regain the support of statesmen who hesitate over liberalizing trade with developing countries, the myths that turn outsourcing into an epithet must be countered.
Myth 1: Outsourcing will be like a tsunami. While even a shrewd economist like the former US Federal Reserve Board member Alan Blinder thought this, it is not likely for several reasons, both “natural” and man-made. Consider just two.
First, it is simply not possible to outsource everything.
For example, the fact that I can call someone in Bangalore to tell me how to fix a computer problem presupposes that I can understand her instructions. I tried this with a Dell computer and gave up after repeated attempts. I was so desperate that I asked Michael Dell, whom I met at the World Economic Forum in Davos, for a replacement.
That is a remedy unavailable to others, of course. So Dell has now given up relying on call centers. Besides, many “electronic plumbers” have emerged who will come to your computer and fix the problem while you while away the hours working where your competence lies.
Second, there are man-made restrictions to outsourcing particular types of expertise: professional organizations often intervene to kill outsourcing simply by requiring credentials that only they can provide. Thus, foreign radiologists need US certification before they are allowed to read the x-rays sent from the US. Until recently, only two foreign firms qualified.
Rich to poor
Myth 2: Outsourcing will be only from rich to poor. This fear is baseless.
Indeed, there has been substantial growth in “reverse outsourcing,” ie, “insourcing.” Indian firms like Infosys and Wipro, giants in the information-technology sector, are now looking for cutting-edge services and high-grade talent as they compete for local markets such as the US.
At IQor, the hugely successful outsourcing entrepreneur Vikas Kapoor now has 12 US locations, which account for half of its 11,000 employees.
Myth 3: Outsourcing costs jobs.
Senator Barbara Boxer railed continually against Carly Fiorina, a former CEO of Hewlett-Packard, that she had exported 35,000 jobs. The obvious reply should have been: “Yes, I outsourced 30,000 jobs. But, if I had not, HP would have become uncompetitive in fiercely competitive markets, and I would have lost 100,000 jobs.”
Another “jobs fallacy” is that when a job disappears in a Western country and turns up in India, it must have been “exported” by nefarious businessmen. But, in many cases, the job has simply become uneconomic to maintain in the West, regardless of whether or not India exists.
If it costs a US nursing home US$2 per call to get someone to remind a patient to take her medicine, the job of providing such reminders will disappear. But if Indians can make the call for US$0.25, the nursing home might well sign on. This would make its patients healthier, drug makers more profitable, and India better off, because employment increases.
Everyone wins from outsourcing of services. Alas, few understand this.
Jagdish Bhagwati, professor of economics and law at Columbia University and senior fellow in International economics at the Council on Foreign Relations, was co-chair of the High-Level Trade Experts Group appointed by the British, German, Indonesian, and Turkish governments. Copyright: Project Syndicate, 2011.www.project-syndicate.org
Have a heart, it’s chocolate you know?
CHOCOLATE may be good for the heart but cardiologists are not giving you a licence to indulge.
New research presented at Europe’s biggest medical meeting yesterday suggested chocolate consumption might be associated with a one third reduction in the risk of developing heart disease.
Just why there should be such a link was unclear, the European Society of Cardiology congress was told.
There has been a string of studies in recent years showing a potential health benefit from eating chocolate. Dark chocolate, in particular, contains compounds called flavanols thought to be good for the blood system.
In an attempt to paint a clearer picture, Oscar Franco and colleagues from the University of Cambridge pooled results from seven studies involving 100,000 people.
Five of the studies showed a beneficial link between eating chocolate and cardiovascular health, while two did not.
Overall, the findings showed the highest levels of chocolate consumption were associated with a 37 percent reduction in cardiovascular disease and a 29 percent reduction in stroke compared with the lowest levels.
Franco said there were limitations with the pooled analysis, which did not differentiate between dark and milk chocolate, and more research was needed to test whether chocolate actually caused better health outcomes or if it was due to some other confounding factor.
“Evidence does suggest chocolate might have some heart health benefits but we need to find out why that might be,” said Victoria Taylor, of the British Heart Foundation. “If you want to reduce your heart disease risk, there are much better places to start than a box of chocolates.”
Gov’t leadership changes continue
More regional leadership reshuffles may be expected following changes to the top leaders of five provincial-level regions last week, as the Communist Party of China (CPC) gears up for next year’s Party congress, experts said.
Zhu Lijia, a public administration expert at the Chinese Academy of Governance, told China Daily on Monday that last week’s personnel changes, in which seven provincial governors and Party chiefs from five provinces and autonomous regions were removed, were part of a national reshuffle, and more rearrangements may be expected in the near future.
“Such personnel changes are being made to pave the way for the impending 18th National Congress of the CPC, when a new leadership lineup will be elected,” Zhu said.
Chen Quanguo has been appointed secretary of the CPC committee of Tibet.
In addition, Qin Guangrong has been appointed secretary of Yunnan Provincial Committee of the CPC, replacing Bai Enpei, while Luo Baoming has been appointed secretary of Hainan Provincial Committee of the CPC, replacing Wei Liucheng.
All of the departing leaders have turned 65, a standard retirement age for ministerial-level officials in China, and have been appointed as senior officials in the National People’s Congress, China’s top legislature.
Zhang Yunchuan, former Hebei Party chief, and Bai Enpei, former Yunnan Party chief, were appointed deputy directors of the NPC Environment Protection and Resources Conservation Committee.
Wei Liucheng, former Party chief of Hainan, and Lu Zushan, former governor of East China’s Zhejiang province, were appointed deputy directors of the NPC Financial and Economic Affairs Committee.
Lu’s successor has not yet been named.
Zhu said such rearrangements usually start at least two years before the CPC’s national congress, a five-yearly personnel change in the country’s top ruling body.
In particular, Zhang Qingli, 60, who had been working in ethnically concentrated Xinjiang Uygur and Tibet autonomous regions for 12 years, was appointed Party chief in Hebei province, which borders Beijing and Tianjin municipalities.
Zhang Qingwei, 50, former president of a leading commercial airplane manufacturer, was nominated acting governor of Hebei, replacing his predecessor, Chen Quanguo. Chen was designated the Party chief of Tibet.
“Zhang is not the first entrepreneur in China who has become a provincial leader,” said Liu Shanying, a political researcher at the Chinese Academy of Social Sciences.
“Businessmen-turned-political leaders can make the best use of their social resources to attract investment for a relatively underdeveloped region.”
Last week’s reshuffle was made along with the nomination of dozens of director-level officials, in which at least three officials from the central government departments responsible for the economy, finance and foreign trade, were appointed deputy mayors or Party officials of coastal cities.
Liu said the purpose of the reshuffle was to help local governments better balance economic development and improvement of people’s living standards.
“By selecting officials from Beijing, the central government hopes local leaders can better comprehend and carry out its policies,” Liu said.
generous individual investors appeared Ultrapower strange hands, planted doubts heavy
Ultrapower a bland report, impressively mysterious flash of the Phantom of the Opera retail supermarkets. Company movements are shown, a man named Qi Liu, Should try to figure out is, Qi Liu, accumulation behind the madness, against the background of the selling shareholders Peng Jie track, but the logic of which is difficult to understand.
Ultrapower Annual Reports, 2010 net profit of 328 million, an increase of 21.28%, to be sent 3 10 to 2 yuan (including tax). Plans to send one after another in the high turn GEM companies in the annual report Ultrapower not eye-catching. Yesterday, the stock Ultrapower opened low, ended down 4.5%.
, however, look Ultrapower list shares in circulation, in the crowding together of a new face appears in the fund – Liu, Qi, and its two shareholders holding 615 shares among the seats, accounting for 7.15% float caps only Yinhua holds 650.98 million shares secondary to the core values of preferred funds, the other seven funds far behind. Information, Qi Liu, a promoter is not Ultrapower shareholders, had never appeared shareholders of listed companies list.
to Ultrapower estimated average price of the fourth quarter of last year, Liu, Qi as the most generous shot GEM retail.
Objective analysis of the investment, the 2009 has been implemented 10 years of mediocre performance of the transferred 15,2010 Ultrapower obviously difficult to have high turn sent plans to send high betting market are not likely to switch, Liu, Qi is based on the long-term investment value of up ? Secondly, Liu, Qi is not a frequent visitor to the capital market, and suddenly threw hundreds of millions of stunning debut, is the protagonist behind the scenes while others?
many answers to be exposed. However, the recourse to large transactions can be seen, Qi Liu, accumulation of the other side of madness, it is the former shareholders Ultrapower lightning Peng Jie reduction.
Shenzhen Stock Exchange data show that last December 10 to December 22 9 trading days, there were 15 pen Ultrapower large transactions, the total turnover of 1230 million with a turnover of 720 million yuan. Check bulletin shows that Restricted Shares held by Ultrapower, only 1 has been lifted – November 1 last year, Peng Jie held 706.65 million shares (2.23% of total share capital) Restricted Shares lifted its shares from the subject Let the name of her ex-husband Zhenyue Bin option. Ultrapower 2010 Annual Report shows Peng Jie has disappeared in the top ten shareholders of tradable shares can be corroborated by selling the stock is trading block Peng Jie.
However, careful people can easily see, Peng Jie 706.65 million shares held by the 1230 deal with shares of large transactions do not match. Re-open records, the original, the existence of large transactions The next day, the business department of Air China Securities and Shanghai Caoxi securities sold to the Air Village West sales department of Jingdezhen. For a cover, the actual number of shares traded was double counting, which led to these differences.
reporter noted that Ultrapower similar River North business department, and up to 11 times, seems intentional. The end result is that Qi Liu, had most of the chips smoking, pushing himself to the second position of tradable shareholders.
Another confusion resulting
: Since it is a reduction of cash for these shares back into the business of the seller and the Ministry of why it? This logic can not help but speculate chaos, Jie Liu, Qi Peng equity transactions and behind it a novelty?
transaction records from the bulk perspective, the transferee of equity Qi Liu, cost about 59 yuan / share, if the shares now, Fukui carrying more than 7000 million, a loss rate of about 20%.
28 killed in bus-truck collision in Cameroon
Twenty-eight people were killed in a road accident over the weekend when a truck transporting goods collided with a passenger transport bus with 36 passengers on board in Cameroon, state radio announced on Monday.
“The accident occurred when the truck was trying to over-take another truck parked along the roadside and came face-to-face directly with a passenger transport bus from the opposite direction,” said the commandant of the Boumnyebel gendarmerie brigade, Boum Bissoue.
He said beyond the 28 dead, seven others who were seriously injured were rushed to the Yaounde Central Hospital for urgent attention.
Most of the victims of the accident were students on holidays who were going back to the various localities of resident to prepare for the new school year which is scheduled to go underway on Sept. 5.
The weekend accident has again brought to sharp focus persistent request from the public that the very busy 265 km long Yaounde-Douala road, which also links the Douala sea port to landlocked Chad and Central African Republic as well as serve northern Congo Republic and Gabon, be transformed to a real highway with several lanes.
Moreover, users say the road is too narrow for its intense and characterized by many bends, making it impossible for drivers to see sometimes as far as just 200 meters ahead of them.
The situation is aggravated by heavy rains in this rainforest part of the country with foggy weather. According to statistics published by the semi-military National Gendarmerie in June, some 1,258 people died in road accidents in the country in 2010, with another 5,000 wounded.
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