Thursday, February 16, 2006

Outsourcing Moves up the Food Chain

According to the NY Times, a report to be delivered to the National Academies today predicts increased outsourcing of high level research jobs to China and India. The reason is apparently not, as it has been in so many other cases, cost control, but the desire of corporations to forge relationships with emerging economies.

Scholarly publishing has of course been by no means exempt from the trend of outsourcing. It started with data entry, and moved to data conversion to typesetting, editorial tasks, and now project management and programming. And of course, on the research side, journals are seeing increasing numbers of "off-shore" submissions from researchers.

My conversations with publishers in the last few years indicates that few have ethical problems with sending jobs overseas. They need to stay competitive and this is one way to do it. Publishers, unlike the corporations in this article, are primarily trying to control costs or to undertake huge legacy projects in a reasonable period of time.

Publishers have always outsourced the bulk of their production work: copyediting, proofreading, typesetting, printing, and now electronic hosting. It used to be mainly to local freelancers. With the improvement in the global communications systems, the natural evolution is to extend the reach beyond our local network. My background in economics tells me that this evolution makes sense.

Economics tells us (in a world of perfect information, anyway) that that salaries should evenutally equalize. Eventually, the outsourcing companies should have difficulty making a profit as the cost differential disappears, unless they offer sustainable competitive advantage. But we know the world is far from one of perfect information. In the meantime, my view is that increasing contact among people living on different points of the globe has got to be a good thing in the long term, although it is certainly difficult for those whose jobs are affected.

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