OFF-SHORING: AN ELUSIVE PHENOMENON

The impact of shifting U.S. business operations to foreign countries on the nation’s workforce and economy is not a new or unstudied issue. For decades, it has been central to the debate about the benefits and costs of economic growth and trade expansion. However, this debate has not produced consensus on the magnitude and significance of off-shoring, which occurs when companies contract out activities abroad, either to their own affiliates or to other firms.

The disparity of viewpoints stems from many factors, including the varied reliability and use of data, as well as the difficulty in directly measuring off-shoring and estimating its impacts.

Federal agencies and others have tried to expand the range of data, but collection remains fragmentary and hampered by a lack of consensus about what needs to be measured.

What distinguishes current concerns from past ones are perceptions that the services sector—particularly white collar, high-technology jobs—is at risk after years of being considered less vulnerable to off-shoring than the manufacturing sector. Beyond the immediate impact on current workers, extensive services off-shoring could weaken the United States’ long-standing leadership role in scientific innovation and technological advances by siphoning off high-skilled science and engineering workers from the United States to emerging foreign competitors.

Simply put, shifting business operations to off-shore locations is an elusive and exceedingly complex phenomenon that is difficult to measure and estimate. Yet the need for a better understanding of this phenomenon is greater than ever. In 2005, Congress asked the National Academy of Public Administration to undertake a wide-ranging study of off-shoring and its impacts.

An Academy Panel, led by Academy Fellow and former U.S. Commissioner of Labor Statistics Janet Norwood, directed the study, which included key recommendations aimed at enhancing the U.S. position in a global economy and strengthening the data used to assess off-shoring, particularly in the services sector.

The Panel’s work resulted in three major reports released between January 2006 and February 2007:

• Off-Shoring: An Elusive Phenomenon
• Off-Shoring: How Big Is It?
• Off-Shoring: What Are Its Effects?

These reports can be accessed on the Academy’s website at www.napawash.org.

This document highlights the results of all three reports. Appendix A contains the complete set of findings and recommendations issued as a result of the Academy Panel’s work.

Download Off-Shoring: New Challenges and Opportunities in an Expanding Global Economy

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A Report by a Panel of the NATIONAL ACADEMY OF PUBLIC ADMINISTRATION for the U.S. Congress and the Bureau of Economic Analysis. 2007

OFFICERS OF THE ACADEMY
Valerie A. Lemmie, Chair of the Board
Jonathan D. Breul, Vice Chair
Jennifer L. Dorn, President
J. Christopher Mihm, Secretary
Franklin S. Reeder, Treasurer

PROJECT STAFF
J. William Gadsby,* Vice President, Academy Studies
Terry F. Buss, PhD, Program Area Director
Kenneth F. Ryder Jr., Project Director
Harry G. Meyers, PhD, Senior Advisor
Gwyneth H. Caverly, Senior Research Analyst
Jennifer Blevins, Senior Research Analyst
Noel A. Popwell, Senior Research Associate
Martha S. Ditmeyer, Senior Administrative Specialist

The National Academy of Public Administration is the preeminent independent, non-profit organization for public governance. Established in 1967 and chartered by Congress, the Academy has become an independent source of trusted advice for every branch and level of government, Congressional committees and civic organizations.

The Academy works constructively with government agencies to improve their performance and management through problem solving, objective research, comprehensive analysis, strategic planning, and connecting people and ideas. The Academy is led by its elected membership of more than 600 distinguished Fellows.

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