How to Ease the Pain of Globalization

Frequent news articles detail the offshoring of information technology (IT) jobs, sounding alarms for all US workers. Catherine Mann suggests that such alarm may be unwarranted and points out steps to maximize the benefits of globalization. Research indicates that the globalization of IT actually promotes productivity, creates new jobs, reduces inflation and enhances innovation, both in the US and worldwide. Lower IT prices lead to more jobs, as more sectors such as health and construction embrace technology. Policymakers should not focus on supposed ill effects of offshoring, but on programs that incorporate flexibility, facilitate new business creation, and invest in worker skill development. The US is in a prime position to capitalize as data confirms the “dominance of US providers in IT services,” according to Mann. The principal downside is that technological change and outsourcing tend to change the skills needed for IT work, even as more jobs are created. Firms demand customization and design more so than programming. Mann proposes more comprehensive unemployment benefits for workers who do lose jobs, with an emphasis on career assistance. She also proposes a “human-capital investment tax credit,” which would encourage companies to invest in training regimes that could prepare workers throughout their careers. Mann maintains that globalization of the IT industry does not abandon US interests, but requires new investment. Companies and individuals alike can approach the volatile IT job market with flexibility and the spirit of innovation. – YaleGlobal