Outsourcing trend will undoubtedly continue

NATHAN THOMAS

BizTech Writer

Sometimes it’s a simple bottom-line decision. Should a company pay its accountants $4,000 or $40,000 per year? This kind of decision has become a routine choice facing many U.S. companies.

Outsourcing, or the exporting of jobs, has become a major issue facing industrialized countries.

The prospective loss of jobs in these nations is disturbing to
many employees.

However, businesses are increasingly exporting their labor in an effort to stay competitive. Despite protests, this practice shows no sign of slowing down or ceasing.

Forrester Research estimates that from 2000 to 2015, a total of 3.3 million United States jobs will be sent abroad. Businesses have long been attracted to the cheaper labor found abroad.
Outsourcing developed after World War II in the manufacturing industry.

Apparel manufacturing was being redirected to Asia in order to dramatically reduce wage expenses. Other blue-collar trades soon followed. The practice picked up and also went to South America during the 1970s and 80s as other industries joined in. The controversy heated up in the late 1990s with the addition of white-collar jobs.

White-collar exporting picked up with the help of the Internet and cheaper international calls. It’s become easy to scan a document and send it across the world. India and China are now the hotspots for outsourcing. India is popular because there is a sizeable amount of educated people that speak English.

Outsourcing will likely continue.

Today, outsourcing is used in a variety of fields including manufacturing, legal work, architecture, accounting and software. Forrester Research predicts $136 billion will be lost by moving white-collar jobs abroad. This translates to an average of 220,000 jobs per year. Manufacturing jobs make up a substantial loss as well. Today, outsourcing remains a source of controversy in industrialized and developed countries. People are being laid off as replacements are found.

Labor unions claim that it hurts our economy. Economists are divided about the harm, but believe the issue is blown out of proportion. Many companies believe that, in an ever-connected world, outsourcing is a necessity if they are to stay in business.

TCS wins multi-million dollar contract in China

Tata Consultancy Services (TCS) and its Chinese partners announced the inauguration of TCS China at its new premises at the state-of-the-art Z-Park in Beijing.

TCS also announced today that it has won a significant multi-million dollar contract to implement a comprehensive international trading system for China Foreign Exchange Trade System (CFETS), which is a sub-institution of the People’s Bank of China. Further financial details were not provided.

The inauguration of the joint venture signals the official launch of China’s first large scale outsourcing technology company.

TCS Asia Pacific owns the majority of the joint venture with a 65 per cent stake. The three Chinese partners - Beijing Zhongguancun Software Park Development Co., Ltd., Uniware Co.,Ltd., and the Tianjin Huayuan Software Area Construction and Development Co., Ltd. - supported by NDRC hold 25 per cent with Microsoft expected to take up the remaining 10 per cent.

TCS China will focus on Financial Services, Manufacturing, Telecom as well as the Government sector, providing IT outsourcing services and solutions to the Chinese domestic market as well as the global MNC customers.

TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 800 consultants in China. The company says it conservatively hopes that number to reach 5,000 in the next five years.

TCS’ latest deal with CFETS is another significant step in providing significant global solutions for major financial institutions in China. The proposed solution will be based on TradeX – TCS’ futuristic Trading Solution. The deal paves the way for TCS to implement a forward-looking CNY (China Renminbi) trading system for CFETS.

Not just China and India

Dennis Posadas says other Asian countries make good choices for outsourcing research and development as well

By Dennis Posadas
AsiaMedia Contributing Writer

Tuesday, February 27, 2007

Manila --- Research and development is moving into Asia. And it's moving into many parts of Asia, not just India and China.

The Philippines is not necessarily a country on the R&D outsourcing radar of many American and European multinational companies. Yet a trickle of outsourced R&D does make it into the Philippines after China and India have taken their share. Companies like Intel, Texas Instruments, Philips, Trend Micro and Cypress do some types of development work here. Some multinational companies like Intel, Sanyo and Canon even do some of their chip design work here.

Unfortunately, the international press seems to have fallen in love with China and India as the new R&D frontier for Asia. From the reports in big international publications like BusinessWeek, Forbes and Fortune, and even specialized technology publications like Red Herring, you would think that the only R&D going on in this part of the world is happening in China and India. What is not as well reported is that other countries are increasingly taking part in research activities, a natural consequence of the outsourcing of manufacturing of electronics and semiconductors that began in the 1970s. Semiconductor companies like Intel, Hewlett Packard and Texas Instruments set up their factories in countries like the Philippines, Singapore and Malaysia. Even companies like Google are starting to wake up to the tremendous opportunities in Southeast Asia.

The quality of homegrown R&D in Asia, even in countries like the Philippines, has gone up. Take the case of a recent University of the Philippines paper that describes a new technique for inspecting microchips. This paper was selected by the prestigious Optical Society of America as one of the "most exciting" research papers published in 2006. Another example is Philippines-made software that trains users in the Java computer language and was acknowledged by Sun Microsystems CEO Scott McNealy during the June 2005 JavaOne conference in the United States. These innovations need more attention and recognition. The overseas skilled diaspora of various Asian countries (excluding China and India) will have a big role to play in getting underdog Asian countries their own slices of the R&D outsourcing pie.

Take Dr. Gregory Tangonan, a graduate of the California Institute of Technology who for many years managed the R&D arm of a major U.S. high technology company in Los Angeles, California. Tangonan has since retired; he shuttles back and forth between the Philippines and the United States and now teaches electronics engineering to undergraduate students at the Ateneo University in Manila. Like many skilled Asians who originally migrated to the United States, individuals like Tangonan find that going back to their home country offers some new opportunities, especially in this time of increased R&D outsourcing. Highly skilled individuals like Tangonan are instrumental in getting R&D outsourcing opportunities to Asia because they have the respect of their peers in American universities and high tech companies back home. More organized diaspora initiatives -- such as The Indus Entrepreneurs in India, China's Hua Yuan Science and Technology Association, Taiwan's Monte Jade Science and Technology Association, the Philippines' Brain Gain Network and the Philippine-American Academy of Science and Engineering -- all try to organize skilled Asians like Tangonan to help in their home countries. They mentor researchers and graduate students, advocate for improved science and technology policies, or, in the case of Taiwan, organize venture capital funds.

The future of R&D outsourcing is not entirely clear, however. U.S. Sen. Hillary Clinton's plans to become the Democratic Party's presidential candidate could throw a wrench into Southeast Asia's growth. Clinton is known as a staunch opponent of outsourcing, preferring instead to keep these opportunities in the United States, as she articulated in an Aug. 2004 opinion piece in The Wall Street Journal. She is concerned about America's declining role in innovation. “We cannot afford to fall behind India and China, who graduate far larger numbers of scientists and engineers,” she wrote. After all, places like Bangalore, Hsinchu, Pudong show up regularly in the American media as places of innovation.

The big players in Asia's R&D for the next few years to come will definitely remain China and India. But for the international technology media to assume that these are the only countries where tech R&D occurs is simply viewing the innovation outsourcing phenomenon through myopic eyes. When the international press takes a moment to look, they will see that other Asian places like the Philippines can be competitive as well.

They will also see that the United States has nothing to fear from R&D outsourcing to Asia. Asian countries' participation in the global economy will hopefully mean stronger economies and, in the end, strong economies mean less fertile grounds for extremist thinking to flourish.

Outsourcing Provider Achievo Raises $24 Million

Outsourcing services provider Achievo Corp., which has much of its operations based in China, has raised US$24 million from private and institutional investors, the company announced Monday.

Achievo has grown rapidly in recent years through a string of acquisitions and will use the injection of funds "to cover current obligations and future operating needs," it said. Most of those acquisitions, done using a combination of company stock and cash, has been funded through the company's own revenue.

Based in California, Achievo has offices in Japan, Germany, Taiwan, Canada and the U.S. that serve as a front-end, working closely with clients. The company also has six offices in China, where most of the back-end programming work is done using .Net and Java.

Last August, Achievo's Chairman and CEO Robert Lee [CQ] said the company plans to expand further through acquisition, particularly in Europe and Australia. That could lead the company to raise additional funds from investors.

"If we decide to pursue additional funding in the future, it will be related to major acquisitions and strategic corporate development initiatives," said Julio Leung [CQ], Achievo's CFO, in a statement announcing the latest round of investment in the company.

Shaking the world: The economic ascension of China

"Let China sleep, for when she wakes, she will shake the world." Napoleon's words seem to be the inspiration behind the title of James Kynge's book, "China Shakes the World: A Titan's Rise and Troubled Future -- and the Challenge for America."

Kynge has been a journalist in Asia for more than two decades. His book centers on "the appetite that the world's most populous nation unleashed on the planet in the first few years of the twenty-first century" and, more specifically, how that appetite has affected the world; how it has affected China itself; and the price that the world has paid for the behemoth's economic ascension.

How China affects the world

One of the most apparent, significant ways that China affects the world is in its ability to manufacture products of comparable quality at a fraction of the cost of manufacturing them in developed countries.

Visceral reactions to this effect, Kynge writes, center around "the debate over the outsourcing of American jobs, perceptions of China's unfair trading practices, Chinese piracy of Western intellectual property, and several other irritants in the commercial relationship."

Westerners consider less often the positive effects of China's economic ascension. Some of those positive effects, Kynge writes, are that "the cost of consumer products has fallen significantly for U.S. buyers, and the downward pressure on retail prices has helped to keep American interest rates low -- which has in turn powered a real estate boom."

One problem with the lopsided view of China's economic impact on countries like the U.S. is that it can lead to limitations on free trade -- which actually hurt those seeking protection as much as anyone.

"But such decisions," Kynge suggests, "rarely come down to dispassionate economic analysis; they turn instead on the perceptions of electorates -- people [in one of] a thousand places reeling from China's manufacturing might. And there's the rub."

Kynge spends most of the book telling stories that illustrate China's economic successes and failures. He also touches -- albeit briefly -- on the question of why manufacturing jobs are moving from the U.S. and Western Europe to China.

In the U.S., local manufacturing jobs were exported to China because Chinese manufacturers could beat U.S. manufacturers' prices by 70 percent or more. Why? Expensive labor and bureaucratic red tape and regulations that add more than 20 percent onto the cost of manufacturing in the U.S. are two key reasons.

But the availability of cheap labor in China hasn't been bad for all manufacturing businesses in the U.S. and Europe -- while small and mid-sized companies have suffered from the inability to compete with China, large multinational companies have been able to leverage low-cost labor in China for their own benefit.

"Pulling up stakes and shifting to a place like China, with its welter of regulations and customs, represents a cost and a risk that most medium-size and family-run businesses are unable or unwilling to absorb. The result is that the beneficiaries of the cheap, diligent, and often skilled labor available in China are overwhelmingly the multinationals," Kynge writes.

China's impact is uneven on an individual level, too. Kynge writes that "the powerful, the international, and the wealthy are reaping huge benefits, while those in the middle are suffering in either relative or absolute terms."

How China affects itself

But the effects of China's economic rise have not all been external. In the first part of his book, Kynge relates a number of uplifting anecdotes about unemployed, poor, rural Chinese, denied formal education during Mao's Cultural Revolution, who were able to rise up and form successful private companies. Kynge ends the book with a reiteration of the stories we hear so often, about the oppressive State government that reins in or out free enterprise as it benefits the State.

Kynge says that government flip flops between periods of liberalization and periods of consolidation of State power coincide with periods of economic booms and busts. During busts, the government is compelled to release the reins on economic activity; during booms, it brings them in. "The waves of activity created by this interplay of government fear and covetousness define the economy's momentum," Kynge writes.

In Kynge's stories about poor rural Chinese who have found success in private enterprise, unemployment was often a blessing in disguise. In the late 1970s and early 1980s, those who spent the Cultural Revolution "learning from the peasants" in the countryside flooded back into the cities, but there weren't enough jobs to support all of the people.

"Beijing felt that it had no choice but to allow them to indulge in minor private business," Kynge writes. Some of those minor private businesses have flourished and made multi-millionaires out of their founders.

Indeed, Kynge suggests that one of the principal motivators behind China's rise as a manufacturing giant has been population pressure.

"Even when the economy grows at 9 or 10 percent, it fails by a margin of several million to create the 24 million new jobs required each year. So while China appears to the rest of the world to be enjoying an amazing growth bonanza, the officials working behind the high walls of their leadership compound in Beijing feel trapped in an endless employment crisis," writes Kynge.

That population pressure creates, for one, "a tendency among companies to carry on producing, or even expand production, long after any discernible profit margin has vanished." Contrary to conventional practice and, often, to economic sense, this has led to a chronic oversupply of manufactured goods in China (according to Kynge, around 90 percent of China's manufactured products were in oversupply in 2005). That oversupply is one reason why many of China's products are so cheap.

Population pressure -- and the continued surge of Chinese people from rural areas into cities -- has also given China its large base of cheap labor. "Around 700 million people are thought to get by on less than two dollars a day. That provides a huge pool of labor that is willing to work at preindustrial wages … as long as there are factories being built … there will be robust demand for the labor of farmers' children," Kynge writes.

The price of China's rise

But the price of China's rise has been steep. That environmental degradation is one effect of China's rise is not new, Kynge says -- China's environmental problems have existed for decades. "But what is new -- and world-shaking -- is the projection of this environmental exhaustion into the international arena," he writes.

The figures that Kynge cites are shocking: Five out of every ten tropical logs shipped worldwide are imported by China; 44 percent have been felled illegally. Brazilian farmers clear forests at a rate of six soccer fields every minute to plant soy fields for Chinese consumers. Carbon dioxide emissions from China increased 33 percent between 1990 and 2002; a plume of polluted air over New England was found to have come from China.

Part of the problem, according to Kynge, is that China is already environmentally exhausted. "The main catalyst behind China's appetite is the mismatch in the size of its population and its resource base. But that is not the only cause; another is the decades of wasteful exploitation and disrespect for the environment that characterized the Communist era."

In countries where local officials can be held accountable by citizens, environmental conservation -- most important to those citizens who have to live with the direct and immediate effects of local environmental degradation -- can be successful. But such accountability is largely absent in China.

And the cost of paying for China's rise would be enormous. "It is clear," Kynge writes, "that repairing the devastation [China] has suffered is a task so onerous that it could slow down, or even derail, the country's stellar economic trajectory."

The future of China in the world

The key to China's future, Kynge writes in his last chapter, will be the extent to which the world -- notably Europe and the United States -- allows China to continue its ascent. "With trade amounting to more than two-thirds of the size of China's economy (compared with around a quarter for other large economies), Beijing is clearly vulnerable to the protectionism that might follow a withdrawal of the West's goodwill," Kynge writes.

While a complete shutdown of trade between China and the West is unlikely, even a "partial pruning of commercial links or a gradual upsurge in Western protectionism toward China" would "have profound effects" not only on China, but on the rest of the world as well.

If China could reform its system in response to concerns coming from the West, that would go far in smoothing economic relations. But Kynge wonders if that will be possible.

"Beijing, goaded by its insatiable appetite, may have no room to cede ground to American public opinion, creating an impasse that could trigger progressively stronger counter-reactions from the White House."

Tensions between China and, in particular, the U.S., reinforce what Kynge calls globalization's "most fundamental limitation."

"Although trade increases the mutual economic dependence of countries that engage in it, trade does not make the peoples of those nations any fonder of each other," Kynge writes.

On the other hand, Kynge sees "flexibility and pragmatism" that may prevent a gloomy future for China and the world. He writes that "China is perhaps too much wedded to the world, too deeply insinuated into its organizations and treaties, and too dependent on others to bite the hands that feed it."

Bottom line:

• China's low-cost manufacturing has led to a reduction in prices of manufactured goods and a transfer of manufacturing jobs from the U.S. and Western Europe into China -- two of the most significant effects that China has had on the world.
• The Chinese government's flip flops between periods of liberalization and periods of consolidation of State power coincide with periods of economic booms and busts.
• The price of China's rise -- especially when measured in terms of global environmental degradation -- has been steep. But the cost of reversing that degradation could cripple the country's economic boom.
• The key to China's future will be the extent to which Western Europe and the United States allow China to continue its ascent.

Software Outsourcing Issue

Software Outsourcing Issues have been widely discussed and the most debatable topics in current IT Industry. Most of the debates are regarding the information that Offshore Software Development is cheaper in terms of cost-deduction involved, funding access to blue-chip, loss of job opportunities and many more. If we consider the whole market scenario then we can see that competition is on the pick especially in IT Industry. Countries like India and China are becoming highly demanded for their cost effective Software Outsourcing services. Greater amount of IT development work is being shifted to overseas locations, simply to reduce the cost.

Most of the IT companies are now exploring the option of overseas service provider exclusively. It gives lots of freedom to the companies in terms of time, cost and from management perspective also. It reduces the management burden from the companies at large extent. Companies can easily send non-core services to overseas locations and concentrate more on the core business objectives. Along with that sending work to the offshore location always provides cost cutting and better quality output option. But to make all these happen in the desired way, it is also true that one should have a good and experienced management team.

Above are some of the positive sides of Software Outsourcing, but along with that it also have lots of issues attached with it that requires keen monitoring. The same fruitful deal of Offshore Software Development can lead to undesired loss, if company misses out to handle the deal properly. Constant monitoring along with the team of experts is highly demanded to make the successful deal. Lots of security aspects are also there that should be taken under consideration at the time of taking crucial decision of such overseas dealings. Companies should also make it sure that they could allocate the best resources to achieve the desired outcome. Companies involved with such overseas services must also update their resources and information to make sure that everything is going as planned.

Another reason for the increased demand of overseas services is to meet the ongoing client requirement. Increased demand, especially in the field of software and services, has forced the companies to explore more options to meet the market requirements. In current market, IT is one of the most booming sectors and with rising demand of low cost and high quality services, most of the companies prefer to take the help of Software Outsourcing services. It also helps companies to maintain their market position.

Above are some of the issues attached with the overseas development services. Increased market demand of lower cost and higher quality development work has made the huge impact on the market of Software Outsourcing.

The Future of Globalization

Where is the increasing integration of the world’s nations taking them? Will globalization ultimately lead to a “new world order”?

By Robert R. Farrell

Have you noticed that the nations of the world have become increasingly interconnected? Think about it. At the supermarket you can buy products from all over the earth—oranges from South Africa, olive oil from Greece, wine from Italy. You can purchase clothes made in Indonesia, Sri Lanka, or Malaysia. In the evening you turn on your Asian-made television set to watch your favorite program. Every day you drive your American, Japanese, South Korean or German-made car to work. Call customer service to discuss your telephone bill and you may well be speaking to someone in India. If you live in a big city, you have likely encountered people who have immigrated to your country.

Chinese workers assemble air conditioners at a Midea plant in Wuhu, China.

Source: MCT

Surfing the Internet on your computer, you can keep up to date with news anywhere in the world, 24 hours a day, 7 days a week. Drought on the American and Canadian prairies affects the price of bread. Political unrest in the Ivory Coast influences the price of chocolate. Bad weather in Brazil affects the price of coffee. Acts of terrorism against the U.S. impact the New York stock markets. And political disputes between major oil-producing nations and their customers increase the price of gas.

Since the latter half of the 20th century, the international community has become more interconnected and interdependent in economic, cultural and environmental matters than ever. It seems the world is rapidly becoming a single community, a global village. Some see this as a good thing; others are not so sure.

Then there are those who believe integration is the first step toward a “new world order,” one in which sovereign nation states will be dissolved in favor of large trading blocs led by a super world government.

Where is this globalization trend leading? Will the world eventually become a single community?

History of Globalization

Globalization is the process by which nations become increasingly integrated. This is occurring primarily due to advances in technology that have enabled people, goods, money, data and ideas to travel the world much faster than before; and the reduction of trade and economic barriers, which has greatly increased trade between countries.

In recent years, globalization has become a hot topic, one that has been associated with trends such as the following:

• The rise and expansion of multinational corporations with business interests and employees in several countries, including McDonald’s, Coca-Cola, Toyota, Sony, IBM, Unilever, Nike and Shell.

• The emergence of global financial markets in centers such as New York, London, Frankfurt and Hong Kong, providing businesses around the world with easier access to financing.

• Greater levels of immigration, changing the ethnic, cultural and religious composition of several countries and leading to the establishment of multicultural societies.

• The erosion of trade barriers between groups of nations, leading to the emergence of powerful trading blocs, with names such as NAFTA (the North American Free Trade Agreement), the European Union and the ASEAN (Association of Southeast Asian Nations).

Globalization is not new. Historically, people have left their surroundings and traveled to distant lands for four main reasons: conquest (the desire to control other countries); prosperity (the search for a better life); exploration (the desire to discover new lands); and trade (the desire to sell goods profitably). The primary agents of globalization in the past were soldiers, sailors, traders and explorers.

For thousands of years, traders carried their goods across oceans and continents and armies launched invasions on their rulers’ orders. Powerful nations have brought new lands under their authority, integrating disparate nations, peoples and cultures into empires.

Earlier forms of globalization existed in the Egyptian, Medo-Persian, Babylonian, Greek and Roman empires. During the time of the Mongol empire in the Middle Ages, the famed “Silk Road” connected Central Asia and Europe, linking several civilizations.

The first steps toward globalizing as we know it today were taken in the 16th and 17th centuries when the Portuguese and Spanish empires spread into Africa, the Americas and Asia seeking gold, silver and spices. The Dutch, French and British empires soon followed, with the Dutch East India Company becoming the world’s first multinational privately-held company, in which ownership was divided into shares. This first wave of globalization was characterized by rapid growth in trade and investment between the European powers and their colonies, including the American colonies.

The first era of globalization began to break down with the advent of the First World War, and later collapsed between the two world wars, in part due to the raising of tariffs and increased immigration restrictions.

Globalization Today

The end of the Second World War brought renewed life to globalization. Since 1950, the volume of world trade has increased by roughly 20 times from $320 billion to $6.8 trillion (USD). Between 1980 and 2000, flow of foreign investment had increased approximately twenty-fold, from $57 billion to around $1.3 trillion. This increase in trade and foreign investment allows consumers around the world to enjoy a broader selection of products.

Animators at the animation firm Toonz Animation in Thiruvananthapuram, Kerala State, India, draw backdrops for animated films.

Source: MCT

In the years since WWII, a defining feature of globalization has been an international industrial and business structure built by multinational corporations. Many governments have adopted free market economic systems, negotiating reductions in barriers to commerce and establishing international agreements to promote trade in goods, services and investment.

As a result of the explosion of trade and technology, the current rate of globalization is unprecedented. Author and journalist Thomas Friedman stated that today’s globalization is unique because what was once accomplished only by corporations is now being done by individuals, allowing them to reach around the world “farther, faster, cheaper, and deeper.”

Examples are everywhere, which we experience every day. Internationally, millions eat Kentucky Fried Chicken, drink Pepsi, drive Hondas, listen to music on Sony mp3 players, and play sports wearing Reebok sneakers.

Nowadays, many companies outsource their manufacturing operations to developing nations. For example, American and European clothing companies employ workers in Indonesia to produce their products to be sold back home. Technology firms employ programmers in India to write programming code. Telecommunication companies place call centers in India to handle customer service.

At the Crossroads “Down Under”

Few countries have used globalization as effectively as Australia—a market that has been transformed by a commercial link with Asia, particularly China. As a result, for the past 15 years Australia’s economy has grown at an average rate of 3.7% per year and shows no sign of slowing down—despite having one of the world’s highest minimum wages.

The Christian Science Monitor reports that in the early years of the 20th century, Australians were the richest people on earth, the result of the country’s vast natural resources. However, their standard of living steadily declined, leaving in its wake high unemployment and inflation during the early 1980s. This convinced the government to remove its protectionist policies and force Australian companies to compete globally.

This decision set in motion a period of reform. In 1983, the Australian dollar was allowed to compete with other world currencies. In the banking industry, regulations were changed to make it easier and potentially more profitable for foreign banks to do business in Australia. Also, trade tariffs were slowly dismantled from the clothing, auto and wool industries. Major state-owned firms were privatized and sold, the most prominent of which were the phone company and national airline. Citizens were encouraged to buy shares in privatized companies, to the extent that today 55% of adults own stocks—the highest rate in the world.

Interestingly, throughout all of the reforms, Australia continues to set minimum wages per industry. Benefits such as healthcare, pensions and prescription drugs are means tested, directing more to the poor than the wealthy.

Australia’s economy has grown because of skyrocketing prices for its iron ore, coal and aluminum, which fuel China’s factories. The cheaper prices of China’s toys, appliances and other household products and office supplies have also helped raise living standards.

Of some concern is the fact that even in the face of the overall rise in prosperity, the gap between rich and poor is growing. In 1995, the richest 1% of the population earned 5% of the national income, which increased to 9% by 2006. These trends and impending changes by the government to slow minimum wage growth are stirring misgivings and protests.

A Controversial Topic

Those who support globalization point out that free trade enables companies from the rich industrialized countries to invest in poorer countries, providing jobs to local citizens and improvements to infrastructure. Many multinational corporations now reduce labor costs by outsourcing portions of their business operations to countries such as India and China. This has been particularly true of the manufacturing sector.

Foreign companies also provide wealth to local economies in the form of foreign currency when they buy local products and services. In many cases, they have built schools, colleges and hospitals for the local residents, enhancing the quality of life.

Advocates also contend that globalization allows for the mixing of people and cultures, further enabling the sharing of ideas, experiences and lifestyles. People can experience foods and other products not previously available in their own country.

Overall, supporters of globalization argue that it has brought improved standards of living and quality of life to several countries. They point to examples such as China. As a result of opening its markets to the world, China’s economy can claim an increase in per capita personal income from $1,420 in 1980 to $4,120 by 1999. In 1980, Americans earned 12.5 times as much as the Chinese per capita. By 1999, they were only earning 7.4 times as much.

Anti-globalization protesters gear up for demonstrations around the G8 summit of industrialized countries in nearby Evian by sitting in the streets of Annemasse, France.

Source: MCT

Supporters cite globalization as having benefited countries in a number of ways, particularly poorer ones. For example, the percentage of people in developing countries living below $1 per day has halved in only 20 years; life expectancy in the developing world has almost doubled since WWII and is closing the gap with the developed world; between 1950 and 1999 global literacy increased from 52% to 81%.

But globalization has equally vocal opponents. In recent times, globalization has been blamed for a host of ills, including poverty in the Third World, job losses in industrialized countries and even the “Americanization” of other cultures.

“Anti-globalists” contend that it operates only in the interests of the rich nations and multinational corporations. They argue that such corporations exploit workers in the developing world, subjecting them to poor working conditions in “sweat shops,” and paying them salaries that they would not be allowed to get away with back home. They contend that the multinational profits are repatriated and little is invested in the communities whose labor and resources they consume.

These critics also say that the gap between the rich and poor nations is growing, and that globalization has not benefited poorer countries. Figures used frequently to back their position come from a variety of sources, including a report from the United Nations Development Program. For example, the gap in incomes between the 20% of the richest and poorest countries has grown from 30 to 1 in 1960 to 82 to 1 in 1995.

By the late 1990s, the fifth of the world’s population living in the highest-income countries had:

• 86% of the world’s gross domestic product—the bottom fifth just 1%.

• 82% of world export markets—the bottom fifth just 1%.

• 68% of foreign direct investment—the bottom fifth just 1%.

• 74% of the world’s telephone lines—the bottom fifth just 1.5%.

These anti-globalists say this rising inequality is the result of market forces. They say that given free rein, market forces give the rich the power to add to their wealth. Therefore, they argue that large corporations invest in poor countries only because they can take advantage of low wage levels or so they can access their natural resources.

The Future

So what does the future hold? What will be the result of the increasingly interconnected state of the world’s nations?

While there are many opinions, there is only one source that can give us the true answer—the Holy Bible. In it, God accurately foretold the rise and fall of the major nations throughout history, including the Babylonian, Medo-Persian, Greek and Roman empires (Daniel 2). He even prophesied the sudden rise of the American and British people to world prominence.

And God has foretold today’s fast-paced interconnected world and its matchless advances in science and technology: “But you, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased” (Dan. 12:4).

The Bible states that, in the future, a union of ten nations (or groups of nations) will arise, and replace America as the dominant world power. It will attack and defeat America and Britain, taking the survivors into captivity. This political, economic and military combine will be backed by a universal false church. It will become a world-leading trading bloc, possessing vast riches and trading all over the world in every product imaginable—even human beings! (See Revelation 18:3, 9-18.) This politically influential religious entity, led by a charismatic figure, will usher in a temporary period of great wealth. Globalization will thrive during its reign to levels unseen in human history—prosperity will flourish, but not for all.

However, shortly after the rise of this ten-nation union, it will be replaced by a world-ruling supergovernment that will usher in lasting peace, prosperity and security for all (Isaiah 9:6-7). Upon His triumphant Return, Jesus Christ will take over all the governments of men, and administer His government—the kingdom of God—throughout the earth. At that time, the world will become truly “one”—one with God.

True globalization will occur, but according to God’s just standards. No more inequality. No more poverty. No more exploitation. Peace will abound. What a wonderful picture—soon to become a reality!

Covance to Expand Presence in China with New Shanghai Central Laboratory and Relocate Beijing Office to Support Global, Regional Clinical Trials

today announced that it will open a dedicated central laboratory in Shanghai, China, to further strengthen the company’s global network of full-service central laboratories and meet the growing demand for clinical trials conducted in China. In addition, to accommodate the growth of its clinical trial management services in China, Covance has announced that in February it will relocate its existing clinical development office in Beijing to the Derun Building in Beijing’s Central Business District.

The new purpose-built 13,000-square-foot central laboratory will be owned and operated by Covance, and located in the Zhangjiang Hi-Technology Park in Pudong, Shanghai. The facility is expected to be fully equipped, staffed, and ready to support clinical trials by the fourth quarter of 2007 with central laboratory testing and specimen management services.

With its new Shanghai central laboratory, Covance will enhance its clinical trial services available to sponsors by adding a fifth high-quality laboratory to its global network. Covance’s central laboratories use the same technical platforms, methods and procedures to ensure the same level of quality laboratory data regardless of laboratory location.

“As the world’s largest central laboratory, Covance is committed to meeting our clients’ growing need for access to high quality laboratory data in all regions of the world as clinical trials increasingly become more global and complex,” said Deborah Tanner, President of Covance Central Laboratory Services. “The new Shanghai facility is particularly strategic as China represents one of the largest growth areas in clinical development.”

According to IMS Health, a market intelligence company, China is expected to become a top five market for pharmaceutical development by 2010. Home to 23 percent of the world’s population, China offers many benefits for pharmaceutical and biotechnology companies conducting clinical trials, including treatment naive patients, low costs, shortened timelines for clinical trials and positive patient attitudes. Some of the most common diseases in China include cancer, cardiovascular disease, diabetes, viral disease, asthma/COPD and arthritis.

China and the Asia Pacific region represent an area of significant growth for Covance, including the recent quadrupling of the company’s central laboratory space and testing capabilities in Singapore.

In Asia Pacific, Covance provides full-service, integrated clinical trial capabilities that combine clinical trials and central laboratory services, including the region’s broadest portfolio of laboratory testing capabilities with central laboratories in Singapore; Sydney, Australia; and, later this year, in Shanghai, China.

More than 200 Covance employees are located in Asia Pacific, offering established relationships with local investigators, opinion leaders, and regulatory agencies. Covance has managed more than 550 studies in Asia Pacific and offers CAP certification of its central laboratory in Singapore and NATA certification of its central laboratory in Australia. In Shanghai, Covance currently works with Huashan Hospital Center of Laboratory Medicine which maintains CAP certification.

About Covance

Covance, with headquarters in Princeton, New Jersey, is one of the world's largest and most comprehensive drug development services companies with annual revenues greater than $1 billion, global operations in more than 20 countries, and more than 8,000 employees worldwide. Information on Covance’s products and services, recent press releases, and SEC filings can be obtained through its website at www.covance.com.

Statements contained in this press release, which are not historical facts, are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements including the statements contained herein regarding anticipated trends in the Company’s business are based largely on management’s expectations and are subject to an qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, competitive factors, outsourcing trends in the pharmaceutical industry, levels of industry research and development spending, the Company’s ability to continue to attract and retain qualified personnel, the fixed price nature of contracts or the loss of large contracts, and other factors described in the Company’s filings with the Securities and Exchange Commission. Covance and the Covance are registered service marks of Covance in the United States and other countries.

Chinese IT major acquires US firm as a challenge to India

Beijing, March 02: Leading Chinese IT firm Hisoft Technology International on Friday announced acquisition of California-based Envisage Solutions as a part of China's effort to boost its it-related services and outbid Indian competitors from the lucrative US and European markets.

"We hope to change the outlook of Chinese ITO players, who have been relying mainly on the Japanese market and unable to crack open the US and European markets, captured by Indian players," Chief Executive Officer of Hisoft International, Loh Tiak Koon said here.

"Indians are our main competitors, which is of course a challenge for US," he said, adding that the 'merger' of Hisoft with envisage solutions will enable the Chinese company to consolidate in the US market.

With this merger, Hisoft is now in a good position in china to offer world class outsourcing and off-shoring services to international companies which target china as a domestic market and as an alternative service base to their providers in India, he said.

"We are in the game because, we can offer the same value to the customer that an Indian vendor could," Loh said while declining to disclose the exact amount Hisoft paid to envisage solutions for the 'merger'.

But he indicated that the company's offer could be as much as two times Envisage's revenue, which is around 10 million dollars. "The exciting part is that we are in a good position now in the US market," he said, noting that the company now has a workforce of 2,300 in China, Japan and the US.

"We think we can compete in the US too. To sustain the growth rate, you have to compete in the US market because Japan, though an interesting market is not as huge as US and Europe," he added.

The US and Europe make up 75 per cent of the software and services markets. "That is the future of software services market," he said acknowledging that the Chinese players are way behind Indian IT giants.

"However, the market is consolidating quickly," he said noting that about USD 300 million of venture capital money has been invested in China into 15 to 20 vehicles an effort to "create an Infosys or TCS in China."

Hisoft, which has five development centres in China, received USD 30 million in second-round investment from us venture capital firms including Granite Global Ventures, Intel Capital and Eplanet Ventures.

China currently has only USD 1.5 billion out of the USD 30 billion market. But, the country enjoys a huge and strong domestic it market. "So nobody wants to focus on the export market," Loh said, predicting that things will change rapidly in china in view of the increasing focus on china and the money floating around.

He also pointed out that it is reported that china accounted for only six per cent of global it outsourcing market in 2004 but is predicted to increase its share to about 25 per cent by 2009.

The sector is expected to grow at an average annual rate of 50.2 per cent to USD 7.03 billion by 2010, a local consultancy specialising in the IT sector forecast recently.

China's hiSoft says could list in 1-2 years

BEIJING, March 2 (Reuters) - Software services firm hiSoft Technology International Ltd. said on Friday it could seek a public listing in one-to-two years and would continue to double revenues annually as China's information technology outsourcing sector takes off. "It could happen in one or two years," chief executive Loh Tiak koon, told Reuters in an interview, referring to a possible share listing in the United States or Japan. "We are definitely looking to list."

The China-based firm still lags far behind its giant Indian rivals such as Tata Consultancy Services Ltd. (TCS.BO: Quote, Profile , Research) and Infosys Technologies Ltd. (INFY.BO: Quote, Profile , Research) (INFY.O: Quote, Profile , Research), but is optimistic about growth in the coming years.

"HiSoft is growing at about 100 percent year on year," he said. "We can continue to do that for another good three-to-five years."

The company -- which claims less than 1 percent of the global IT outsourcing business -- had revenues of about $50 million last year.

China's nascent IT software outsourcing industry controls only about 10 percent of the $30 billion global market, which is still dominated by the Indian companies that pioneered it.

HiSoft reckons the global IT outsourcing industry could grow to as much as $50 billion in 2009, while the industry in China would outpace that with 40 percent annual growth.

"To be taken seriously, you have to have about 10,000 consultants," said Loh, a former vice president at Hewlett-Packard Co. (HPQ.N: Quote, Profile , Research) responsible for greater China.

The upstart currently has about 2,300 consultants, which it expects to reach 10,000 in three to four years.

HiSoft completed its second round of fund raising by attracting $30 million last year from the likes of Granite Global Ventures, Draper Fisher Jurvetson ePlanet Ventures, Mitsubishi UFJ Securities (HK) Capital Limited and Sumitomo Corporation Equity Asia Limited.

Intel Capital, International Finance Corporation and JAFCO Asia were also investors, said Loh.

"There is a lot of money out there," said the executive, whose company had raised $20 million previously.

"We don't need any more money."

With the newly raised funds, hiSoft purchased U.S.-based Envisage Solutions earlier this year and is looking for more acquisition targets.

"Our appetite for acquisitions is growing bigger," he said. (US$=7.74 yuan)

EIOSoft announced their website has been launched

EIOSoft announced their website has been launched today. EIOSoft Technology is a rapidly growing custom development and software outsourcing organization with headquarter in Shanghai, China. Our offshore software development centre is located in Shanghai. EioSoft specializes in the development of custom software applications, web applications, web & graphic designs and offshore software outsourcing services.

Over years we have managed to build a solid team of software outsourcing professionals that come from various backgrounds and expand the creative potential of the organization. The expertise that they posses embraces a wide range of custom programming skills involving the latest and most effective development technologies, such as .NET (ASP.NET, C#, VB.NET, ADO.NET), XML, Web Service, MS SQL, PHP, MySQL, Flash MX, Flash Animation, Flash Action Script, J2EE and many more. This to a great extent defines the quality and reliability of the custom software applications that we develop.

We deliver custom application programming services to end clients and we provide offshore software outsourcing services for other IT companies. Our competence and experience ensure that we deliver excellent services and products to our clients. At every stage of the development process, from conceptual design to product release, the highest quality standards are maintained. Our extensive communication facilities allow us to keep in touch with our clients 24 hours a day.

Besides software outsourcing development services, Eiosoft’s talented Web & Graphic Design team has gained high-recognitions from our clients too. We guarantee our clients 100% satisfaction of our works. Our design service includes Website Design, Logo, Company VI, Brochure Design, Banner Design, Illustration, Graphic Design, E-card and Flash Animation.

Our experienced web & graphic designer team specializes in professional custom Website Design, Corporate Identity Solutions, Logo Design, Brochure, Flash Animation and Illustration. At business design, we understand how critical your Corporate brand or Company brand is to the success of your business. Our professional graphic designers produce customized corporate identity solutions, while always keeping in mind your requirements. The reason we keep our prices so reasonable compared to those offered by our competitors, is we believe that even a small business should have the opportunity to have a professional design which meets their budget. Our Flash designers love the works of Flash development as their life. This is why they can always keep their Flash works vivid, emotional and creative. We are happy because our clients happy.