Globalization in the Service Industry

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Globalization in the Service Industry

• Presentation by Will Todd, University of Southern
  Mississippi

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Exam Questions

• Has the service industry become globalized?
• Has immigration affected the service industry?

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What is Globalization?
Worldwide flow of capital, labor, and goods
Google Images.  The Moderate Voice.  Retrieved
November 1, 2008 http//themoderatevoice.com/soci
ety/multiculturalism/20331/globalization-dont-leav
e-it-unmanaged/    
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The inhabitant of London could order by
telephone, sipping his morning tea in bed, the
various products of the whole earth ... he could
at the same moment and by the same means
adventure his wealth in the natural resources and
new enterprises of any quarter of the world.
-John Maynard Keynes
The New York Times. The Great Illusion. Retrieved
November 3, 2008. http//www.nytimes.com/2008/08/1
5/opinion/15krugman.html
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Origins of Globalization

• Economists began to use the term in the 1980s
•  
• The 19th Century, "The First Era of
  Globalization" 
•  
• "Help me build a bridge to the 21st century"
•    -Bill Clinton
•  
• Promotion of free trade WTO, NAFTA
•  
•  
•  

Economist.com. A-Z Economic Terms. Retrieved
November 3, 2008. http//www.economist.com/researc
h/Economics/alphabetic.cfm?termglobalisation  
USIA.  United States Foreign Policy Agenda,
October 1996.  Retrieved November 2, 2008  
http//usinfo.state.gov/journals/itps/1096/ijpe/p
j14bill.htm      
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New Era of Globalization

• Dubai ports
•  
• Immigration reform
•  
• Wall Street

Continetti, Matthew.  "The Pros Lose to the
Cons"  The Weekly Standard.  October 13, 2008
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"The world economy is teetering.  Suddenly
globalization seems frightening.  Construction on
Clinton's bridge has been indefinitely
postponed.  And apparently the world is no longer
simply flat.  It's Hot, Flat and
Crowded." -Matthew Continetti
Contineti, Matthew.  "The Pros Lose to the Cons" 
The Weekly Standard.  October 13, 2008
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What is the Service Industry?

• Any industry in the part of the economy that
  creates services rather than tangible objects

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Goods vs. Services

• Economists divide economic activity into two
  categories goods and services
•  
• Examples of Goods-producing industries
  agriculture, mining, manufacturing, and
  construction, each of them creates some kind of
  tangible object.

Encyclopedia Britannica Online. Entry Service
Industry. Retrieved November 1, 2008.
http//www.britannica.com/EBchecked/topic/53 5980/
service-industry
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Service Industry Includes

• Banking
• Communications
• Wholesale and retail trade
• All professional services such as engineering,
  computer software development, and medicine
• Nonprofit economic activity
• Consumer services
• Government services
•  

Encyclopedia Britannica Online. Entry Service
Industry. Retrieved November 1, 2008.
http//www.britannica.com/EBchecked/topic/53 5980/
service-industry
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Has the Service Industry Become Globalized?

•  
•  
•  

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The Newest Trend of Globalization in the Service
Industry

• Outsourcing procurement of products or services
  from outside suppliers (3rd parties) to lower
  costs

Business Week Online. The Future of Outsourcing.
Retrieved November 4, 2008. http//www.businesswe
ek.com/magazine/content/06_05/b3969401.htm
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Virtualstaffingservices.com. Outsourcing Trends
Bring Globalization. Retrieved November 1, 2008.
http//www.virtualstaffingservices.com/outsourcing
_trends.php
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Virtualstaffingservices.com. Outsourcing Trends
Bring Globalization. Retrieved November 1, 2008.
http//www.virtualstaffingservices.com/outsourcing
_trends.php
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Global Outsourcing Trends

• Creates and expands new markets
• Effectively and efficiently promotes global
  citizenship
• Recognizes the benefits of a global economy
• Enhances technological creativity and diversity

Virtualstaffingservices.com. Outsourcing Trends
Bring Globalization. Retrieved November 1, 2008.
http//www.virtualstaffingservices.com/outsourcing
_trends.php
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• "The business services industry is undergoing a
  revolution, as a growing range of back-office
  activities are being moved to developing
  countries such as India and China. Public
  discussion about offshore as the phenomenon
  is known within industry circles - may be low
  profile so far, but a growing coalition of
  critics could make it the next battleground in
  the globalisation debate."
• -Paul Morrison 

Global Policy Forum. Globalization of Services
The Backlash Begins. Retrieved November 2, 2008.
http//www.globalpolicy.org/globaliz/econ/2003/062
7services.htm
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The Offshore Debate
Large companies are increasingly shifting service
functions to developing countries Following the
trend of manufacturing in the 1970s and
80s Ethical concerns The Job Exodus

• Global Policy Forum. Globalization of Services
  The Backlash Begins. Retrieved November 1, 2008.
  http//www.globalpolicy.org/globaliz/econ/2003/062
  7services.htm

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Has immigration affected the service industry?

• "We both recognize how important the contribution
  to our economy the Mexican workers have made
  that we want people treated with respect that we
  both have a mutual and shared responsibility to
  make sure our border is safe, and that we enforce
  the border that I hope to come forward with a
  program that will pass the Congress, that deals
  with guest workers with some sense of
  normalization.  And I would like to do that as
  soon as possible."
• -President Bush

Immigration Policy Focus. Volume 1, Issue 2.
September, 2002. http//www.robparal.com/downloads
/Mexican_immigrant_workers.pdf
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Guest Worker Programs
The H-1B is a nonimmigrant classification used by
an alien who will be employed temporarily in a
specialty occupation or as a fashion model of
distinguished merit and ability.
U.S. Citizenship and Immigration Services. H1B
Visas. Retrieved November 1, 2008. http//www.usci
s.gov/portal/site/uscis/menuitem.5af9bb95919f35e66
f614176543f6d1a/?vgnextoidc487d92e8003f010VgnVCM1
000000ecd190aRCRD
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What is a specialty occupation?

• A specialty occupation requires theoretical and
  practical application of a body of specialized
  knowledge along with at least a bachelors degree
  or its equivalent. For example, architecture,
  engineering, mathematics, physical sciences,
  social sciences, medicine and health, education,
  business specialties, accounting, law, theology,
  and the arts are specialty occupations.

U.S. Citizenship and Immigration Services. H1B
Visas. Retrieved November 1, 2008. http//www.usci
s.gov/portal/site/uscis/menuitem.5af9bb95919f35e66
f614176543f6d1a/?vgnextoidc487d92e8003f010VgnVCM1
000000ecd190aRCRD
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Service Industry Suffers

• Failed Comprehensive Immigration Reform and Guest
  Worker Extensions
• Hotel and Restaurants

Kiplinger Business Report. Service Industry
Struggles Under Immigration Crackdown. Retrieved
November 2, 2008. http//www.kiplinger.com/busin
essresource/forecast/archive/service_industry_ wor
ker_shortage_070717.html
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Immigration Policy and Enforcement in Mississippi

• Largest Immigration Raid in U.S. History
• Senate Bill 2988

USA Today Online. Nearly 600 Detained in
Mississippi Immigration Raid. Retrieved November
2, 2008. http//www.usatoday.com/news/nation/2008-
08-26-raid-miss_N.htm
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• Today, I have signed into law SB 2988, a bill
  designed to discourage illegal immigration in
  Mississippi by creating new penalties for hiring
  illegal immigrants.
• Governor Haley Barbour, March 17, 2008

Press Release from Governor Haley Barbour. March
17, 2008. Retrieved November 3,
2008. http//www.governorbarbour.com/news/2008/mar
/SB2988.htm
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Thank You

• Questions?
• Comments?