Dr. Raynor is a Professor of Finance at the State University of New York (SUNY) at Delhi, and, during the summer, is a visiting professor at Universidad Catholica Santo Toribio De Mogrovejo in Peru. He has had broad professional experience in both academic settings and the private sector, as well as extensive international experience in Peru, Ecuador, Puerto Rico, the Dominican Republic, Mexico, and China. He has special interest in Latin American economic and trade issues.

"Is your job next?: A new round of globalization is sending upscale jobs offshore. They include chip design, engineering, basic research - even financial analysis. Can America lose these jobs and still prosper?" (Engardio, Bernstein, and Kripalani, 2/3/03). This was the title (and sub-title) of a 2/3/03 Business Week article that received much attention in many sectors of the economy. The article was startling, because it consolidated the outsourcing trends of white-collar jobs across so many industry lines.

Has globalization finally gone too far? Do the economic and societal costs of globalization now outweigh the benefits? As we approach the tenth anniversary of the implementation of NAFTA, much of the free-trade debate has diminished. Many of the blue-collar manufacturing jobs that were lost over the years were offset by new jobs and markets for U.S. workers. Many of the displaced workers have since retrained to higher skilled, often white-collar types of jobs. The shift to our current service and information-based economy ("the new economy") accelerated. But if white-collar jobs are now being outsourced also, where will the replacement jobs in the U.S. come from?

Ironically, because of enhanced productivity and technology, especially in communications, we may have become victims of our own success. "These days, tasks such as drawing up detailed architectural blue-prints, slicing and dicing a company's financial disclosures, or designing a revolutionary microprocessor can easily be performed overseas... What makes this trend so viable is the explosion of college graduates in low-wage nations." (Engardio, Bernstein, and Kripalani, 2/3/03, p. 52 & 58). Examples: Well-educated accountants in developing countries now know U.S. GAAP (Generally Accepted Accounting Principles), IT professionals who are willing to work for a few thousand dollars a year know the latest technologies, etc. "Proctor & Gamble Co.'s 650 Manila employees, most of whom have business and finance degrees, help prepare P&G's tax returns around the world." (Engardio, Bernstein, and Kripalani, 2/3/03, p. 58). How can U.S. workers compete with equally qualified professionals in developing countries for a fraction of the salary?

To what extent will the new outsourcing trend change the globalization debate? It is difficult to predict, but initial considerations may include the following:

- Renowned researcher and academic Dr. Paul Roberts asks a fundamental question: "Is outsourcing trade?... Trade implies reciprocity. It is a two-way street. There is no reciprocity in outsourcing, only the export of domestic jobs." (Roberts, 3/7/03). Dr. Roberts indicates "... if there are no given endowments because business know-how, capital and technology are globally mobile, the advantage lies with countries with untapped pools of educated and skilled low-wage labor.The advantage increases with the absence o... IRS, EPA, OSHA, EEOC and other regulatory bureaucracies..." (Roberts, 3/7/03).

- Should new societal safety nets such as universal health insurance, traditionally acquired through jobs, be developed? Even some conservative economists might argue for changes, if the free flow of labor across international lines is taken to yet a higher level.          

- Can the U.S. economy recover from the loss of highly paid "knowledge" jobs? Are there enough even higher new jobs in the pipeline that can replace them? If not, what will that do to consumer demand for products and services in the U.S.? Putting aside current geopolitical concerns, normal economic cycles, etc., can our economy absorb this type of structural change?

- Will there be a public backlash and a movement for more protective measures? "Until now, the adverse impact of free trade has been confined largely to blue-collar workers. But if more politically powerful middle-class Americans take a hit as white-collar jobs move offshore, opposition to free trade could broaden." (Engardio, Bernstein, and Kripalani, 2/3/03, p. 57).

- It is not just the private sector: "Now offshore outsourcing is poised to grow in the public sector, as foreign services target what they see as a growth market of cash-strapped state and local governments looking to cut costs. It's a dilemma-in-the-making for government agencies: save taxpayers money or protect U.S. jobs." (Hayes & Chabrow, 3/17/03).

- Will anti-free trade activists concerned about sweatshops need a new agenda? As more of these jobs shift to developing countries, with the implications of improved living standards and higher wages, will their arguments dissipate? Will there be a global equilibrium of living standards, with U.S. and Western economies declining while developing economies are improving?

- In an information-based economy, a firm's assets are primarily intangible. They consist of employee knowledge, databases, R&D, ideas, etc. These intangible assets are what gives a firm value, as opposed to tangible assets like plant and equipment in a manufacturing-based economy. But if U.S. companies shift these intangibles assets--knowledge jobs--overseas, how much value is lost in our national economy as well? 

What will be the end results of outsourcing knowledge jobs? "The truth is, the rise of the global knowledge industry is so recent that most economists haven't begun to fathom the implications. For developing nations, the big beneficiaries will be those offering the speediest and cheapest telecom links, investor-friendly policies, and ample college grads. In the West, it's far less clear who will be the big winners and losers. But we'll soon find out." (Engardio, Bernstein, and Kripalani, 2/3/03, p. 60).