I've been in the IT business for over 25 years. When I started in the business, the buzzword was how the "Knowledge Economy" was going to replace our industrial workforce here in the US. What no one could see at the time was that knowledge worker jobs are easier to export than traditional manufacturing - because you don't have the cost of relocating & setting up capital equipment
For the last several days I've been working on a diary about Labor Arbitrage used by Multinational firms that are hollowing out the American middle class. But before I could finish, I came across this gem of a report about IBM.
I'll just have to let the article speak for itself. Note that IBM retracted the announcement hours after its release:
From The Times Herald Record
IBM files for Patent on Offshoring jobs
Seeks to protect tax incentives
By Christine Young
Times Herald-Record
Posted: March 30, 2009 - 2:00 AM
As IBM was firing thousands of American workers last week, the U.S. Patent and Trademark Office published Big Blue's application to copyright a computerized system that calculates how to offshore jobs while maximizing government tax breaks.
Update: IBM withdraws its application, calling it an error.
In their application to patent a "method and system for strategic global resource sourcing," five Hudson Valley IBMers describe how it weighs such plans as "50 percent of resources in China by 2010," against such factors as labor costs, infrastructure and the "minimum head count to qualify for incentives."
The five Westchester County inventors, Ching-hua Chen-ritzo, Daniel Patrick Connors, Markus Ettl, Mayank Sharma, and Karthik Sourirajan, submitted the application to the patent office in September 2007, but it took a year and a half for that patent to be published online.
None could be reached by telephone Sunday except Ching-hua Chen-ritzo of Mahopac, who declined to comment, and attempts to reach IBM were unsuccessful.
Lee Conrad, national coordinator for Alliance@IBM, a group trying to unionize Big Blue, was stunned to learn of the application.
"This is obviously outrageous — a patent on how to offshore U.S. jobs," Conrad said. "IBM is obviously doing all it can to decimate the U.S. work force, and it is all the more reason why IBM should not get any tax breaks or stimulus money. They clearly are abandoning the U.S. work force."
The application says the system weighs moving into or out of a particular country against criteria such as wages, political systems, "incentive contracts" and the economic impact of "violating and/or satisfying those incentives."
In January, IBM reported that about 115,000, or 29 percent, of its global work force of about 400,000, is in the United States.
Note that a significant portion of IBM's revenue is in the Federal sector, and comes from Products and Consulting services which are off-shored.
More on this later