[hironegro]

December 17, 2008, 2:42 pm

Between 21% and 42% of U.S. jobs are potentially offshorable, according to research conducted by students at Harvard Business School.

The study aimed to replicate a finding by Princeton economist and former Federal Reserve Vice Chairman Alan Blinder, reported last year in the Journal. The students largely agreed with Blinder’s low-end estimate of 22%, but the high end of the range surpassed Blinder’s 29%.

Nearly 900 members of the MBA Class of 2009 participated in the study, which had students assess the potential offshorability of 800 occupations.

“We wanted students to understand that, as future business leaders, they are likely to face an unprecedented array of options concerning what they can do where,” Harvard Professor Jan W. Rivkin, who co-authored the study, told the Business School’s Web site. “The idea that you might offshore the reading of radiology films or the research done by consulting firms would have been unthinkable 25 years ago.”

The Harvard study estimated that 25.2 million to 31.8 million jobs could potentially be moved overseas. The number included high-paying white-collar positions, as well as manufacturing and other blue-collar labor.

Blinder’s study led to a contentious debate among economists about whether the benefits of globalization outweigh the pain it can cause workers. The Harvard study raises the same questions among future business leaders who might see the benefits of offshoring jobs, while understanding the danger that they could see their positions moved overseas as well.

“The case raises an uncomfortable question: Why should Monitor pay a Harvard MBA top dollar to conduct business research in the United States while an Indian Institute of Management graduate could do the work just as effectively in Delhi for much lower pay?” Rivkin is quoted as saying. “I think that brought home to many students that offshoring could affect them personally.”

That prospect is even scarier for students looking to graduate during the worst financial crisis in more than a generation. Just yesterday, Harvard Business School Dean Jay Light sent a note to MBA students telling them the school is working to help them in these troubled times. “The economic crisis we are experiencing today undoubtedly will necessitate a restructuring of the global financial system and a rethinking of how business is conducted,” he wrote. “This is the long-term view; in the short term, the effects of the crisis are going to be felt here at HBS in a much more immediate way. Most significant for you, of course, is the potential impact on the recruiting experience and job and internship opportunities.” –Phil Izzo

http://blogs.wsj.com/economics/2008/12/17/up-to-42-of-us-jobs-potentially-offshoreable/

[lawnchair]

What is the US competitive advantage? Really? We have pretty good cropland. That employs maybe 3% of the nation. And, then what? Average IQ here isn't really any higher than anywhere else.

When we say "the world is flat", know that you are competing against billions of reasonably smart people. The median one of whom lives on $2 a day and poops in the gutter outside his squalid hovel. Meanwhile, if we cut back to the very basics of need (100 square feet per person, rice and beans), we've mechanized effectively enough that 5% of the world's labor force working would provide sustenance for most of the world.

This 'offshoring' comes about from two directions. First, we really have flattened the world. Containerized freight and fiber optic telecoms. And, second, we have traded in our protectionist heritage. For the entire history of the US until the early 1970s, the US was known for its protectionism. So much so that it was known as the "American School of Economics". Yet, now, crack a US history textbook (as I did recently), and Adam Smith gets three quotes, while List and Carey are not mentioned, and Alexander Hamilton only in passing.

The fact that we became born-again globalist free-traders in the early 1970s is no coincidence. We were, for the first time, critically dependent on an imported natural resource. We chose to eat the seed corn of our industrial base and middle class rather than get off the black tar heroin of oil-based growth.

[Specop_007]

What are we competitive at? Whatever we really put our minds to. Problem is your average American worker is more concerned with keeping his coffee cup full and leaving early then actually putting in an honest days work and making a quality product. We take the worst of every culture and expand on it.

We demand the pay of the Japanese.
We expect the time off of the Europeans.
We work like South Americans.

None of this in an of itself is bad. Japanese get paid very well, they also make some of the finest products in the world. Euopeans have some pretty good labor laws for the worker and the South Americans embrace "work to live" as opposd to live to work.

The problem is you cant be a half ass lazy worker and expect top dollar. Theres some notable exceptions mind you. High tech or extreme precision jobs we can still compete, although Germans and Japanese are frankly better. But for every day tasks we get trumped by about everyone else. We dont have the drive to keep quality high and we wont accept the pay to do the jobs we do at the level we do it.

So one outsources. Find people who can meet your quality controls and pay them well or find someone who gets the job done for pennies. Neither to be found onshore it seems in any appreciable quantity........