JANUS Workshop

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JANUS Workshop

• Brussels, January 23, 2004
• A Global Digital Divide the global market in
  delocalised services
• Ursula Huws
• Director. Analytica.
• Associate Fellow, Institute for Employment
  Studies
• and Professor of International Labour Studies,
• Working Lives Research Institute,
• London Metropolitan University

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A new global division of labour in
information/knowledge-based services

• ICTs mean (in theory) that any task involving
  the processing and/or transmission of digitised
  information can be carried out anywhere where the
  right infrastructure is present in combination
  with the right workers
• This (in theory) opens up new opportunities for
  development all over the world
• But what happens in practice?

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Convergence or polarisation?

• The death of distance vs increasing importance of
  the local
• The possibility of delocalisation creates new
  forms of competition between regions
• New regional critical success factors
• Interplay of dynamism and inertia in shaping new
  geographies
• Tension between centralisation and
  decentralisation tendencies

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BUT trends are not universal or inevitable

• patterns are shaped by strategies of players on
  both the supply and demand side
• as well as by specific features of the local
  environment
• including cultural, political and geographical
  patterns as well as economic ones

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A brief historical overview

• 1960s-70s development of a global division of
  labour in manufacturing industries ICTs played
  a role in managing global production lines some
  white-collar work involved (e.g. typesetting in
  Hong Kong, Malaysia and Malta for UK customers)
• Late 1970s beginning of export of bulk data
  entry, e.g from US to Caribbean, Philippines,
  China
• 1980s large scale body-shopping from India to
  more developed countries in software sector

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The 1990s

• Global liberalisation of telecommunications
• Rapid spread of ICTs including the Internet
• Growth in delocalisable forms of employment (e.g.
  call centres)
• 1992 liberalisation of trade regulations
  permitted software export from India
• Development of market economies in Central and
  Eastern Europe
• Growing awareness of the death of distance

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Contrasting national strategies in the mid-90s

• India rich in skills, poor in
  telecommunications development of Satellite
  Technology Parks, NASSCOM, Strong incentives to
  export software or business processes
• Malaysia Multimedia Supercorridor,
  Cyberjaya, 20-20 Vision

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The late 90s

• The dot.com boom
• Skill shortages in the North
• Millennium bug
• Conversion to euro
• Acceleration of digitisation processes

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2000 the EMERGENCE project

• Aims
• Measure the extent of eWork relocation
• Identify forms and characteristics
• Identify favoured locations
• Find reasons for choice of location or supplier
• Explore dynamics of relocation
• Investigate employment implications
• Identify constraints and facilitators
• Identify indicators for future modelling and
  tracking
• Inform regional development strategies

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Global statistical analysis Where the Butterfly
Alights

• e-tiger - 17 large rapidly developing countries,
  often existing destinations
• e-maybe - 19 states - with small, highly
  educated population - source or destination
• e-loser - 114 underdeveloped countries at
  serious risk of exclusion

• e-leader - 6 large dominant source
  economies
• e-capable - 23 smaller highly developed
  source economies
• e-hare - 25 small but rapidly
  developing countries - potential destinations

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Relocation of work in Europe (demand side) by
type of eWork ( of establishments with gt50
employees)
Source EMERGENCE employer survey, 2000
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eWork demand by business function ( of
establishments with gt50 employees)
Source EMERGENCE employer survey, 2000
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Use of outsourced business services ( of
establishments with gt50 employees)
Source EMERGENCE employer survey, 2000
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Reasons for choice of eOutsourcer (reasons for
choice of location, of all outsourced services)
Source EMERGENCE employer survey, 2000
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62 European case studies of eWork relocation
involving international or inter-regional
relocation - typology
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Complex dynamics of eWork relocation

• One off relocation can be first stage in major
  restructuring. 2nd phase may be more destructive
  of jobs
• Outsourcing may become insourcing
• Choice of location is often by-product of choice
  of outsourcer
• 1st move creates preconditions for further
  reolocations
• Role of intermediaries
• Noticeable changes since mid-90s Indian
  companies moving up the value chain

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2003 Asian EMERGENCE

• offshoring has moved from an experimental to a
  consolidation phase
• now forms routine part of business practice
• Risk has been minimised by explicit quality
  standards BUT things still go wrong!
• New forms of intermediation
• Trends increasingly driven by supply as well as
  demand side factors
• Relocations within Asia as well as between
  US.EU/Australia and Asia
• Very rapid growth in China to a lesser extent
  other destinations e.g. Sri Lanka, Vietnam

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Employment Implications

• Digital divide within as well as between
  countries
• Qualitative as well as quantitative change in
  jobs
• Much offshoring is taking place in growth
  sectors
• Development in the South means new markets for
  goods and services from the North
• The key policy question is the social
  distribution of the gains

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A quick plug!
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For more information go to

• www.monthlyreview.cybertariat.com
• www.emergence.nu
• www.analytica.org.uk
• www.stile.be
• www.employment-studies.co.uk