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11.3 SERVICE OUTSOURCING: BENEFIT AND DRAWBACKS FOR ALL?

11.3 SERVICE OUTSOURCING: BENEFIT AND DRAWBACKS FOR ALL?. Phan Truong Quoc BAIU08104 Nguyen Huynh Long Hung BAIU08090. Terms Definition. Outsourcing Offshoring Captive Outsourcing Offshore Outsourcing. Outsourcing. Job done by unaffiliated companies Abroad Captive Outsourcing

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11.3 SERVICE OUTSOURCING: BENEFIT AND DRAWBACKS FOR ALL?

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  1. 11.3 SERVICE OUTSOURCING: BENEFIT AND DRAWBACKS FOR ALL? Phan Truong Quoc BAIU08104 Nguyen Huynh Long Hung BAIU08090

  2. Terms Definition • Outsourcing • Offshoring • Captive Outsourcing • Offshore Outsourcing

  3. Outsourcing • Job done by unaffiliated companies • Abroad Captive Outsourcing • Domestic

  4. Offshoring • Job done overseas, whether by: • Affiliated, internal: Intel, Fujitsu • Unaffiliated, external: FPT Offshore Outsourcing When abroad, logistics cost should be taken into consideration

  5. 2.1 Outsource Trend Figure 2. United Kingdom: Outsourcing intensity of intermediate inputs (weighted average across all industries by outputs)

  6. 2.1 Outsource Trend SERVICE OUTSOURCE TREND INCREASING: • Room for Growth (50% manufacturing 10% service) • Rate increase • All sectors of economic – Outsourcing Service Function • Improvement of Education in LDCs • Mobile of Service

  7. 2.1 Outsource Trend THERE IS A TREND IN SERVICE OUTSOURCING

  8. 2.2 Biggest Outsourcers

  9. 2.2 Biggest Outsourcers

  10. 2.2 Biggest Outsourcers IN SUM, SUPPORTED BY TRADE DATA  LARGE DCs Countries DOES NOT OUTSOURCE MORE INTENSELY THAN LDCs Countries

  11. 2.3 Biggest Insourcers

  12. 2.3 Biggest Insourcers

  13. 2.3 Biggest Insourcers SMALLER Economies TURN OUT to be more INSOURCING-INTENSE Than the LARGER Ones

  14. 2.4 Surplus & Deficit

  15. 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.

  16. 2.6 Summary Key Points • There 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

  17. 3.0 Outsourcing in Vietnam MENTION 2 THINGS: • Benefits • Challenges

  18. 3.1 Benefits • Cost: 1/9 of US; 1/3 of India • Big pool of labor • Stability • Government Incentives • Viet Kieu

  19. 3.2 Challenges • Government-related issues: weak macroeconomics policies, corruption, piracy • Poor Infrastructure • Labor limits

  20. THANK YOU FOR LISTENING Reference: “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 & NBER US news sources: Dow Jones News Service, Financial Times, The New York Times (Abstracts), The Seattle Times, The Wall Street Journal, The Washington Post. (2) UK news sources: Daily Mail (UK), Financial Times, The Economist (UK), The Guardian (UK), The Observer (UK), The Sunday Times (London), The Times (London).

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