Phan Truong Quoc BAIU08104Nguyen Huynh Long Hung

BAIU08090

11.3 SERVICE OUTSOURCING: BENEFIT AND DRAWBACKS FOR

ALL?

Terms Definition

1.Outsourcing2.Offshoring3.Captive Outsourcing4.Offshore Outsourcing

OutsourcingJob done by unaffiliated companies

Abroad Captive OutsourcingDomestic

OffshoringJob done overseas, whether by:Affiliated, internal: Intel, FujitsuUnaffiliated, external: FPT

Offshore Outsourcing

When abroad, logistics cost should be taken into consideration

2.1 Outsource Trend

Figure 2. United Kingdom: Outsourcing intensity of intermediate inputs(weighted average across all industries by outputs)

2.1 Outsource TrendSERVICE OUTSOURCE TREND INCREASING:1.Room for Growth (50% manufacturing 10%

service)2.Rate increase3.All sectors of economic – Outsourcing

Service Function4.Improvement of Education in LDCs5.Mobile of Service

2.1 Outsource Trend

THERE IS A TREND IN SERVICE OUTSOURCING

2.2 Biggest Outsourcers

2.2 Biggest Outsourcers

2.2 Biggest Outsourcers

IN SUM, SUPPORTED BY TRADE DATA

LARGE DCs Countries DOES NOT OUTSOURCE MORE INTENSELY THAN LDCs Countries

2.3 Biggest Insourcers

2.3 Biggest Insourcers

2.3 Biggest Insourcers

SMALLER Economies TURN OUT to be more INSOURCING-INTENSE Than the LARGER Ones

2.4 Surplus & Deficit

2.5 Outsource Service & Job Reduce

DOES SERVICE OUTSOURCING REDUCE JOB?

ANSWER IS NO- Outsourcing does NOT have a negative

effect on Service Employment- “In fact, the evidence suggest that workers

who lose jobs in one industry manage to find jobs in other growing industries.

2.6 Summary Key PointsThere is a Trend of Service Outsourcing

OUTSOURCE & INSOURCE, Largest Economies does NOT more INTENSE than Smaller Economies

Service Outsource does NOT come up with Job Reduction

3.0 Outsourcing in Vietnam

MENTION 2 THINGS:- Benefits- Challenges

3.1 Benefits

Cost: 1/9 of US; 1/3 of IndiaBig pool of laborStabilityGovernment Incentives Viet Kieu

3.2 Challenges

Government-related issues: weak macroeconomics policies, corruption, piracy

Poor InfrastructureLabor limits

THANK YOU FOR LISTENINGReference:-“Fear of Service Outsourcing, Is it justified?”, Mary Amiti and Shang-Jin Wei-Research Department, International Monetary Fund and CEPR-Research Department, International Monetary Fund, CEPR & NBERUS news sources: Dow Jones News Service, Financial Times, The New York Times (Abstracts), The SeattleTimes, The Wall Street Journal, The Washington Post. (2) UK news sources: Daily Mail (UK), Financial Times, TheEconomist (UK), The Guardian (UK), The Observer (UK), The Sunday Times (London), The Times (London).