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A California Confab On 'Outsourcing'
by Chloe AlbanesiusLawmakers and interest-group leaders gathered in Sacramento, Calif., on Tuesday for a five-hour hearing on the "outsourcing" of U.S. jobs to other nations and the economic and privacy implications of that trend.
State Sen. Liz Figueroa, a Democrat and chairwoman of the Senate Business and Professions Committee, convened the hearing. "As these technical jobs relocate in other countries, personal, financial and medical data is threatened and becomes vulnerable to exploitation," she said in a statement. "Unfortunately, California's tough privacy laws do not apply overseas."
Outsourcing is not new, but the recent wave "cuts across industrial sectors" and quickly affects new geographic areas," said Cynthia Kroll, a regional economist for at the University of California at Berkeley's business school.
The bursting of the dot-com bubble and the rise in popularity of the Internet has contributed to recent outsourcing, she said, because "the ability to move [a] product over remote communications networks [makes] it much easier to move ... jobs abroad."
During the height of the dot-com boom, high labor and property costs, as well as unemployment rates of less than 3 percent, "led firms to look for alternative locations and labor sources to remain competitive." That was not problematic then, Kroll said, but "firms that now have established employment networks overseas will be slower to add jobs in California as the recovery begins."
Outsourcing can lower costs for consumers and generate more varied products, Kroll added. "As the venture-capital center of the world, Silicon Valley has the business infrastructure to bring new innovations into production, even if the innovations occur outside of California," she said.
With those pros and cons in mind, Kroll advocates a "multi-faceted strategy of providing services to displaced workers, support for new business development and maintenance of a strong technical base in the higher education system" as a way to address outsourcing.
But Ellen Shaffer, director of the Center for Policy Analysis on Trade and Health, said she is concerned about the privacy implications of certain jobs being performed by foreigners. "Increasingly at risk for outsourcing are a wide range of high-tech and highly skilled professional jobs," she said. "Outsourcing these jobs to countries with different privacy laws makes billions of personal, medical and financial transactions vulnerable to invasions of privacy."
Shaffer pushed for lawmakers to "take a leading role" in ensuring global trade while also maintaining respect "for social values such as political and economic security." Trade agreements, she said, threaten to "weaken the authority of state legislatures to constrain outsourcing and to protect our privacy."
Trade rules are being reviewed, and states can influence their outcome, she added. "Short-term programs and support are in order. Engaged and proactive leadership in drawing the roadmap to sustainable development in California and among our trading partners is also imperative."
Jeff Lande, a senior vice president at the Information Technology Association of America, took issue with how much attention outsourcing has received. "The picture is not as dire as many of the inflammatory headlines indicate," he said. "The U.S. IT industry continues to run large trade surpluses with the rest of the world in IT software and services."
He acknowledged that the "global source challenge ... is real" but advocated "running faster and jumping higher [as a] path to success, not trying to erect artificial obstacles in the lanes of our opponents."
N.J. Governor Advocates Tech Investments
New Jersey Gov. James McGreevey on Wednesday announced millions of dollars in proposed investments for the state's technology companies.
"New Jersey has a critical mass of scientists, engineers and technicians, and a wealth of research talent that our high-tech industry needs," the Democrat said during a Wednesday meeting of the New Jersey Technology Council. "We are committed to helping the high-tech industry thrive -- and to keeping New Jersey a world leader in scientific research."
One initiative to help with that goal includes $8 million for the New Jersey Commission on Science and Technology. Under the leadership of Sherrie Preische, the governor's current science and technology adviser, the commission aims to strengthen relationships between state universities and tech companies.
To aid companies in the state, McGreevey has requested that the tax credit for technology transfers to the private sector receive $40 million so that high-tech firms can sell their tax credits to larger businesses. Those companies cannot survive without able employees, the governor's office said, so McGreevey also has requested new funding for construction and renovation at community colleges in order to create space to train an additional 30,000 workers.
Kansas House OKs Sales-Tax Overhaul
The Kansas House on Tuesday approved a measure that would suspend a law enacted last year requiring businesses to apply to the sales taxes of the delivery location to commerce that involves more than one state. The vote was 95-29.
The Kansas City Star reports that the House vote suspends the "destination sales tax" system until Congress allows states to collect sales taxes on catalog and Internet sales. The measure now heads to an uncertain future in the Senate, where similar amendments were defeated two weeks ago.
Democratic Gov. Kathleen Sebelius is expected to veto the bill if the Senate clears it.
Report Analyzes Tech Market In Pennsylvania
The Pittsburgh Technology Council recently released its fifth annual "state of the industry" report and found that for the first time in the last decade, companies in southwestern Pennsylvania saw a "universal decline" in 2002 across most tech categories tracked by the study.
Data for 2002 is the most complete to date, but the study predicts an upswing in 2004.
The region traditionally has focused on five main areas: information technology, life sciences, advanced manufacturing, advanced materials and environmental technology. Evidence suggests, however, that the area also will benefit in future from work in fields such as cyber security, nanotechnology, data storage and robotics.
School Chiefs Honored For Tech Plans
Ten school superintendents from eight states were honored last month in San Francisco for developing and implementing district-wide technology plans. The awards were sponsored by Gateway and given by the educational technology newspaper eSchool News.
Judges weighed the superintendents' ability to equitably distribute technology resources among students and staff, and their efforts in the field of education technology. States with winning districts are: California, Kansas, Louisiana, New Mexico, New York, North Carolina, South Carolina, Texas and Utah.
Boston College, meanwhile, will host a finance conference on Friday, featuring speakers from Comcast, Lucent Technologies and Yahoo. Rep. Edward Markey, D-Mass., will host the event.
In other news, the Virginia High-Tech Partnership (VHTP) will hold its annual internship and job fair March 12 at the Greater Richmond Convention Center for students from the state's historically black colleges and universities. Gov. Mark Warner will deliver opening remarks.
The partnership "serves as a bridge between the five Virginia-based [schools] and the high-tech companies," partnership Chairman Joseph Watson said in a release. "The program provides both the schools and companies with better access to the valuable resources each has to offer."
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