Lazonick's Globalization of the ICT's Labor Force

Lazonick's Globalization of the ICT's Labor Force

The article “Globalization of the ICT Labor Force” was written by William Lazonick in 2007 in the Oxford Handbook of Information and Communication Technologies. Lazonick studied economics at the University of Toronto, and is now a Professor and Director of the University of Massachusetts Center for Industrial Competitiveness and as well as the President of The Academic-Industry Research Network. Lazonick’s work deals with topics like economic development, the theory of innovative enterprise, high tech innovation, and the globalization of high-tech labor. His expertises are considered to be the innovation and development of the economy. Some of Lazonick’s other works include Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States, which won the 2010 Schumpeter Prize.

In this article, Lazonick talks about how offshoring has developed throughout history. At first, it was used to find low wage labor for low skilled tasks. However, in the 1970s the “East Asian miracle” occurred, which was the growth of a highly educated, high-tech labor force in Asian. This change was caused by the investment in education from local governments. However, the new growth of educated individuals in Asia did not immediately help local economies due to the “brain drain”: when developed countries took the best individuals the developing countries had to offer. For example, Lazonick mentions, “One study estimated that, given the cost of educating S&E and their lost value‐added, India transferred $51 billion to the US between 1967 and 1985” (Lazonick, Globalization of the ICT Labor Force). However, MNCs began FDI in these Asian countries, and high skilled jobs immerged offering engineers and managers opportunities to do this ICT work while at home. This caused the brain drain to slowly reverse.

Lazonicks main argument is that the globalization of the ICT labor force will continue to develop, based on the strategies of the nations involved and their demand for capital and or labor. Because India and China are so large and have so much potential for growth, these two countries demand special attention. Lastly, although the brain drain is almost reversed, Lazonick still believes future research involving his theory of the “investment triad” is needed in order to reverse the drain as well as promote as most growth as possible in China and India. This triad involves coordination between MNCs and local/ national governments.

Most negative reactions to this paper dealt with individuals who see US offshoring and outsourcing as hurting the US economy because Americans are losing jobs. In contrast, Lazonick is saying that this outsourcing and offshoring is building economies in underdeveloped countries as well as increasing their GDPs. A similar article on this topic that I discovered was titled A Perceived Role of Offshore Outsourcing Strategy in Achieving Success of Technology Start-Ups, and was written by Jayaram Madireddy. In this article, Madireddy argues offshoring and outsourcing strategies can help technology start-ups achieve success only if the MNCs monitor and control the outsourcing activities more closely. Like Lazonick, Marieddy is arguing the benefits of outsourcing, and how it can help the global economy as a whole, rather than just looking at how it effects a single country.

Works Cited

William Lazonick, “Globalization of the ICT labour force,” in R. Mansell et al. eds., The Oxford Handbook of Information and Communication Technologies (2007).