1 Outsourcing of American Jobs Presented by: Kyle Bowers, Todd Cook Jay Kovarik, Bill Printup Leo Rubio 04/15/04 Macroeconomics for Managers

2 Presentation Outline Outsourcing Overview & History Manufacturing Sector Information Technology Sector Outsourcing Outlook Conclusion… Point – Counter Point

3 Outsourcing Overview & History

4 Definition Outsourcing: the obtaining of goods or contracting of work from sources outside a company or area. Oxford English Dictionary traces the orgin of the word outsourcing to year 1979 We are so short of professional engineers in the motor industry that we are having to outsource design work to Germany (1979) To a large extent the products out-sourced are low-technology items such as window cranks, seat fabrics, and plastic knobs. Qoute (Mar. 1983)

5 Major Reasons to Outsource Cost: better or equal production efficiency externally in low-wage paying nations reduce labor costs reduce technological updating costson a regular basis improve cost effectiveness

6 Major Reasons to Outsource Quality: necessary skills & knowledge not available internally access to new skill set outsource tasks that are not part of an organizations core competency

7 Outsourcing Overview & History

8 Outsourcing Overview & History… cont,

9 Manufacturing Sector

10 Manufacturing Sector

11 Manufacturing Sector… cont,

12 Information Technology Sector

13 IT Sector

14 IT Sector… cont,

15 Outsourcing Outlook

16 Outsourcing Outlook

17 Outsourcing Outlook… cont,

18 Conclusion

19 Conclusion

20 Conclusion… cont,

21 Conclusion… cont, Point Counter Point 1 2 3

22 Questions…