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Strategies & Market Trends : The New Economy and its Winners

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To: Bill Harmond who wrote (20943)	5/30/2004 6:54:39 PM
From: Lizzie Tudor	Read Replies (2) of 57684

Offshoring the workforce is the key reason the capex economy never recovered imho. Some companies like HP and Oracle were facing competitive threats from upstarts and in offshoring their workforce, they effective drove costs down to the point where the new companies were destroyed. The problem is when the workers went, there was no need for expensive capex either. The offshore workers who contract through development shops in Poland just buy Chinese equipment. This is NOT a good thing for the overall health of our industry. I fully expect a John Nash type economist to rise up in the near future and present a theory that challenges comparative advantage for the IP workforce. An engineering dept is not just a cost, it is an investment in the specific company and the industry. Also, the Cisco IP theft this time around (not the Huiwei case) I am certain was related to offshoring. Cisco sends QA or who knows what to some third world location for engineering talent and their code gets stolen. Then they expect the US government to get involved as if IP theft is not a given with the offshore business model. I guess they have problems with this in the film industry too.

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