Paper Topic:

the next industrial revolution

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Offshoring : The Next Industrial Revolution

Offshoring can be loosely defined as the movement of jobs or business opportunities from one country to another country . Alan S . Blinder cites Mankiw 's prediction of things becoming tradable with time , as long as the immediate environment allows : greater business options , albeit with consequences

Jobs in the US are going abroad with each subsequent year thanks to comparative advantage and advancement in technology . In today 's society services that were traditionally nontradable , mainly because of Nature and

distance , are now emerging as tradable due manipulation by human effort . This tilts the balance in favor of the cheaper better option

The end results of the first and second industrial revolutions were creation of employment , rural-urban migration , and changes in lifestyles as more people became wealthier . Moreover , during 1967 and 2003 , there was increased percentage in service provision than goods manufacturing according to the Organization for Economic Cooperation and Development However , the dawn of the third revolution- information age , comes the ability of widening the scope of tradable services at the expense of massive unemployment . Diversity within the market allows for cohesion among the players , resulting to increased productivity and delivery of superior quality goods and services . Also , it was noted that there was a shift towards preference for leisure services like take-away , rather than manufactured goods like clothing . Consequently , there was decline in GDP for 50 years , from 30 percent to 13 percent , as indicated by the increase in importation

Still , Blinder argues that the solution to offshoring does not lay with higher educational inputs and training but with investing in more creative and interpersonal service provision . Those jobs that require physical contact or face to face consultations with the consumer or buyer will be more secure than those services that don 't require a human touch , regardless of educational background or skills . Like manufacturing jobs , these services can be done better , faster and more efficiently , by machines than by humans . The lower the costs involved the greater their demand in the market . Consequently , it is these jobs that are viewed as tradable and hence threatened

Offshoring will threaten those jobs easily manipulated electronically resulting to superior quality and quicker task execution . Therefore modernization and technological advancement- results of the third revolution will continue to accelerate potential offshoring , especially in the first worlds . Third world countries like India and China have heavily invested in technology and service provision , such that they have and can easily infiltrate the job market for both personal-service jobs and the impersonal-service jobs . Noting that the highly personal services like internists are more secure than those that can be performed better by machines like telephone operations

Finally , Baumol 's disease is an exception because it refers to an increase in wages without improved production or advancement unlike in the manufacturing business . This is because , the results would be undesirable in terms of production or impossible quantitatively speaking . Therefore , teaching can only be productive if the students are...

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