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The Changing Face of the Global Business


All jobs, even the most low-skilled, will require higher levels of basic ... 'Companies are moving more service jobs overseas because trade barriers are ... – PowerPoint PPT presentation

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Title: The Changing Face of the Global Business

The Changing Face of the Global Business
What do labor experts agree on?
  • There will be no shortage of opportunities in the
    knowledge sector for those with the education and
    intelligence to perform in it
  • All jobs, even the most low-skilled, will require
    higher levels of basic education, math,
    communication and technology skillsfor survival
    and growth
  • 3. Those without some specialized knowledge or
    skill are likely to suffer declining real wages

What do experts agree on? (II)
  • 4. The Digital Divide exists and those on the
    wrong side will have limited hiring and
    advancement opportunities
  • 5. Jobs requiring human touch will continue to
    be in demand e.g. health services and nursing,
    constructionno robot plumbers!
  • 6. Workplace settings and business practices and
    knowledges will change rapidly, making lifelong
    learning essential e.g. life after paving the
    cow path

Global Labor Market of the 21st Century and
Unfettered Global Capitalism
  • Creative destructionThe process of simultaneous
    job creation and job destruction as new skill
    sets are required and old skills become outdated.
    The same employers will be both hiring and laying
    off continually regardless of labor market
    conditions to enhance productivity and
    competitive edge. Joseph Schumpeter

A Changing Texas Labor Market (6)
  • Globalization is changing economic theory,
    business practices and labor supply options

How Globalization Impacts the Labor MarketThe
  • Globalization new digital technology opens
    producer/consumer markets around the world
  • Increased customer access to producers leads to
    global price competition, driving employer need
    for greater productivity, lower prices
  • Increased price competition leads to cost
    containment pressures
  • Cost containments leads employers to new supply
    chain practices, concerns over labor costs,
    alternative labor options

Everybodys Talking About IT
  • "By 2004, more than 80 percent of U.S. executive
    boardrooms will have discussed offshore sourcing,
    and more than 40 percent of U.S. enterprises will
    have completed some type of pilot or will be
    sourcing IT (information technology) services."
  • Gartner Inc., a technology consulting firm

Everybodys Doin IT
  • IBM's top employee relations executives said
  • three million service jobs were expected to shift
  • foreign workers by 2015 and that IBM should move
  • some of its jobs now done in the U.S., including
  • software design jobs, to India and other
  • "Our competitors are doing it and we have to do
  • Tom Lynch, IBM Director for Global Employee

An I.T. MegaTrend
  • "It's a very important, fundamental
  • transition in the I.T. service industry that's
  • taking place today," said "Its a megatrend
  • in the I.T. services industry."

Digital Technology Makes it Possible
  • Companies are moving more service jobs overseas
    because trade barriers are falling, because
    India, Russia and many other countries have
    technology expertise, and because high-speed
    digital connections and other new technologies
    made it far easier to communicate from afar.
  • Bruce P. Mehlman, Commerce Department assistant
    secretary for technology policy

ITAA Notes Demand Changes
  • Failing a dramatic turnaround in the national
    economy a recovery in the IT sector in 2004 will
    most likely continue to be a jobless one.
  • ?ITAA predicted 1.6 million job openings in 2000
  • ?ITAA predicted 1.1 million job openings in 2002
  • ?ITAA predicts 493,000 job openings in 2003
  • In May 2003, ITAA survey says 67 of hiring
    managers thought demand would stay the same or
    decline over he next 12 months.

Offshoring Doesnt Just Affect IT
  • "Over the next 15 years, 3.3 million U.S. service
    industry jobs and 136 billion in wages will move
    offshore to countries like India, Russia, China
    and the Philippines," Forrester analyst John
    McCarthy predicted in a report last year. "The IT
    industry will lead the initial overseas exodus."

Dilemma for Business
  • "One of our challenges that we deal with every
    day is trying to balance what the business needs
    to do versus impact on people."
  • "This is one of these areas where this challenge
    hits us squarely between the eyes."
  • Tom Lynch, IBM Director for Global Employee

Business Knows the Consequences
  • The American economy is in an "anemic" state,
  • difficulties and backlash from relocating jobs
  • be greater than in the past.
  • "The economy is certainly less robust than it was
  • decade ago and to move jobs in that environment
  • going to create more challenges for the re-
  • absorption of the people who are displaced."

    Tom Lynch, IBM

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A Slower Growing European Economy
Business Knows the Consequences (part II)
  • "Once those jobs leave the country, they will
    never come back."
  • "If we continue losing these jobs, our schools
    will stop producing the computer engineers and
    programmers we need for the future."
  • Phil Friedman, chief executive of Computer
    Generated Solutions, a 1,200-employee computer
    software company

Corporate Employment Alternatives
  • Even When Business Picks up
  • Work existing workers more hours
  • Employ temporary or leased workers
  • Use contract workers for fixed periods
  • Merge with support services company
  • Outsource all non-core functions
  • Take advantage of H1B and L1 visas
  • Add full-time domestic employees

Off-shoring May Be Short-sighted
  • It's a bad thing because high-tech companies
    like I.B.M., Microsoft, Oracle and Sun, are
    making the decision to create jobs overseas
    strictly based on labor costs and cutting
    positions. It can create huge downward wage
    pressures on the American work force.
  • Marcus Courtney, president of an affiliate of the
    Communications Workers of America.

Its Largely About the Money
  • Another important reason for moving jobs abroad
    is lower wages. You can get crackerjack Java
    programmers in India right out of college for
    5,000 a year versus 60,000 here." "The
    technology is such, why be in New York City when
    you can be 9,000 miles away with far less
  • Stephanie Moore, vice president for outsourcing
    at Forrester Research

But Also About a New Business Model
  • The expansion of operations in India was
    "additive" and was not resulting in any jobs
    losses in the United States. Our aim here is not
    cost-driven, its to build a 24/7
    follow-the-sun model for development and support.
    When a software engineer goes to bed at night in
    the U.S., his or her colleague in India picks up
    development when they get into work. They're able
    to continually develop products." David
    Samson, an Oracle spokesman

And Getting Value in Return
  • A February survey of 145 U.S. companies by
    consultant Forrester Research found that 88
    percent of the firms that look overseas for
    services claimed to get better value for their
    money offshore while 71 percent said offshore
    workers did better quality work.

U.S has not been creating jobs between 2000 and
  • -624,900 total payroll jobs were lost between
    January 2000 and March 2003
  • Of 258 industry sectors, 164 (63.5) lost a total
    of 4.71 million jobs. Bottom 10 lost 2.2
    million jobs
  • Of 258 industry sectors, 93 (36.0) gained a
    total of 4.09 million jobs. Top 10 added 2.4
    million. Top 5 added 1.64 million new jobs

U.S. Industries as Job Losers 2000-03
  • Employment Services -508,767
  • Cut and Sew Apparel -151,567
  • Grocery Stores -150,667
  • Semiconductor Mfg. -149,267
  • Motor Vehicle Parts -129,400
  • Comptr Equip Whlsalrs -84,200
  • Plastics Products Mfg -81,533
  • Wired Telecom Carriers -77,467
  • Aerospace Product Mfg -75,700
  • Computer Equip Mfg -72,900
  • Print Publishing -71,400
  • Others of Note
  • Machinery Whlsalrs
  • Computer System Design
  • Air Transportation
  • Communications Equip Manufacturing
  • Electric/Electronic Goods Wholesalers
  • Advertising Services
  • Fabric Mills

U.S. Industries as Job Gainers 2000-03
  • Local Government 753,000
  • General Hospitals 239,933
  • Full-service Restaurant 237,700
  • Offices of Physicians 211,767
  • State Government 201,333
  • Colleges/Universities 199,433
  • Family Social Services 124,667
  • Limited-service Eatery 105,333
  • K-12 Schools 90,900
  • Accounting Services 80,300
  • Nursing Care Facilities 76,100
  • Others of Note
  • Mortgage Financing
  • Eldercare Facilities
  • Amusemnt/Recreation
  • Commercial Banking
  • Home Health Care
  • Legal Services
  • General Merchandise Stores
  • Offices of Dentists
  • Mgmt Consult Srvcs

Opportunities More Jobs in Services
  • Expected Job Growth in 2003-2004
  • Educational Services
  • Food Services/Drinking Places
  • Ambulatory Health Care Services
  • Professional and Technical Services
  • Local Government
  • Specialty Trade Contractors
  • General Merchandise Stores
  • Hospitals
  • Heavy and Civil Construction
  • Motor Vehicle and Parts Dealers

Job Declines in Goods Producing Sectors
  • Expected Job Losses in 2003-2004
  • Agriculture/Forestry Support
  • Computer/Electronic Manufacturing
  • Apparel Manufacturing
  • Transportation Equip Manufacturing
  • Fabricated Metal Manufacturing
  • Chemical Manufacturing
  • Oil Gas Extraction
  • Food Beverage Stores
  • Administrative Support Services
  • Federal Government

Occupational Growth in USAfastest Growing
  • 8. Database Administrators
  • 9. Medical Records Technician
  • 10. Social Services Assistants
  • 11. Special Education Teachers
  • 12. Computer Systems Analysts
  • 13. Medical Assistants
  • 14. Physician Assistants
  • 15. Information Systems Mgrs.
  • 1. Computer Support Specialists
  • 2. Computer Software Engineers, Apps
  • 3. Network Systems Administrators
  • 4. Desktop Publishers
  • 5. Computer Software Engineers, Systems
  • 6. Network Data Communications Analysts
  • 7. Computer Specialist, NEC

Occupational Growth Most Jobs Created 2000-2010
  • 1. Customer Service Representatives
  • 2. Food Prep and Serving Workers, Fast Food
  • 3. Child Care Workers
  • 4. Retail Salespersons
  • 5. Registered Nurses
  • 6. Cashiers
  • 7. Computer Support Specialists
  • 8. Office Clerks, General
  • 9. Waiters Waitresses
  • 10. General and Operations
  • 11. Elementary School Teacher
  • 12. Teacher Assistants
  • 13. Secondary School Teacher
  • 14. Janitors and Cleaners
  • 15. Truck Drivers, Heavy and Tractor

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