Monday, April 24, 2006

Are You Being Served?



Brandon’s post last Thursday touched on globalization and the anxiety created by outsourced jobs. While fears of outsourced radiology jobs have been overstated, the anxiety over globalization is real, and for some other industries so is the outsourcing. So, how can the U.S. labor force cope with these trends?

According to President Bush, education is the best response to globalization, allowing American workers to “fill the jobs of the 21st century.” The key is for workers to retool themselves for jobs that are unlikely to be shipped overseas. Where do you find such jobs? Many academics and corporations think the answer is a developing field of study called services science, which combines quantitative methods with technology and management.

Remember, Adam Smith once called services the parasite of the economy. But, with over 75% of the U.S. workforce employed by the service industry, services science is designed to improve efficiency and create new opportunity in a variety of industries including health care, transportation, customer service, etc. Several prominent universities (including Cal-Berkley, Stanford, North Carolina State, and Georgia Tech) are now implementing courses and devoting research resources to services science, while IBM leads the business-to-business charge, having seen half of its business become services.

Many are applauding this co-evolution of business, technology, and education, including OECD economist Jerry Sheehan who said, “This is how you address the global challenge. You have to move up to do more complex, higher-value work.”

Of course if that doesn’t work … who knows, maybe livelihood insurance is just around the corner.

1. What role did services science play with the Apple iPod?

2. Which workers will services science benefit the least? Why?

3. How does the theory of comparative advantage help explain outsourcing and the purpose of services science?

4. As more collegiate services science programs develop, will that create more jobs for the existing workforce or only new entrants into the workforce?

If you care to listen to Jim Spohrer, director of services research for IBM, talk about the evolution of services science, link here.

Topics: Globalization, Outsourcing, Services science

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