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Shorenstein APARC's Senior Research Scholar, Rafiq Dossani, invited to participate in an online debate on indian outsourcing

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Shorenstein APARC's Senior Research Scholar, Rafiq Dossani, invited to participate in an online debate on indian outsourcing.

Pro: Not as Tempting

by Sabrina Siddiqui, intern, BusinessWeek, and a senior at the Medill School of Journalism at Northwestern University.

There is no doubt that over the last decade, India fortified its rule over the shared services and outsourcing (SSO) sector. Access to low-wage yet skilled workers allowed local global technology services giants Infosys (INFY), Tata Consultancy Services (TACSF), and Wipro (WIT) to employ tens of thousands of Indians to do work for such multinational corporate clients as Bank of America (BAC), Microsoft (MSFT), and Ericsson (ERIC).

But a recent study by Frost & Sullivan consolidates the idea that India's outsourcing has already peaked, and there are a number of factors to blame:

The Rupee Riddle. Earlier this year, the Indian rupee appreciated 8.4% against the U.S. dollar and touched 41.14 to the dollar, its highest rate in nine years. A significant reason for concern for the outsourcing sector, the upward value of the rupee continues to put a squeeze on earnings. By April, 2007, it had cut margins by about 2.5 percentage points.

Cost (In)Efficiency. Companies looking to outsource have long seen India as their most cost-efficient vehicle. But with wage inflation running 15% to 25% per year, India can no longer use the siren song of its labor being the cheapest. Competitors like China can offer their services at a lower cost, while firms like Infosys are stuck recruiting from outside the country, because the comparable Indian staff is growing too expensive.

That Age-Old Infrastructure. As much as the economy continues to boom, how long can it sustain its position when IT operations spend considerably on backup systems to fight regular blackouts? And the 300,000 engineering students who graduate each year may be short of the level needed to support modernization of infrastructure and industry growth. (Not to mention that the peculiarly accented "Doug Smith" on the computer help desk is a little too hard for U.S. callers to comprehend.)

So if you assume you're being rerouted by tech support to a call center in Bangalore, guess again. It seems India's grasp on the SSO market is at long-term risk, and it just so happens that your call might be answered by someone in Shanghai.

Con: Plenty of Spice Left

by Rafiq Dossani, Stanford University and Martin Kenney, University of California, Davis

Notwithstanding the occasional news stories about companies returning work earlier offshored to India, the logic behind offshoring and its financial impact (both on outsourcing firms operating in India and their American clients) remains intact. First, the logic: A fresh engineer costs $8,000, including benefits, on average in Bangalore. Even a "Google-quality", presumably equivalent to the best Google can hire anywhere (in fact, Google offers its India recruits the option of working in Silicon Valley if they so desire) costs $30,000. These wages are much lower than in the U.S. and will remain that way for at least a decadeespecially if the ambitious graduation targets of Indian education policymakers are realized.

Of course, there are problems in doing work long distance: Coordinating the work of global teams is costlier than coordinating such work locally. The intellectual property issues could be important. But offshoring is now tried and tested enough, and large corporations are deeply committed to it.

By 2010, many large multinational corporations like IBM (IBM) will have their largest workforces in India. This is creating a relatively rich ecosystem in a number of Indian cities, especially Bangalore.

Already, for a number of these firms, their Indian operations are being declared global centers of excellence, whose value goes well beyond just cost savings. Undoubtedly, some smaller firms have faced high initial costs, but even they, particularly the technology firms of Silicon Valley, have committed to Indian operations. Firms such as Infinera (INFNO) and HelloSoft have substantial Indian operations that are critical to their success. For them to retreat would require a major reorientation of their business strategy.

The appreciating rupee will, like rising wages, affect offshoring decisions. However, the Indian system integrators such as TCS, Infosys, and Wipro, which are also being squeezed by costs, have experienced profits rising at about 35% a year for the past decade and enjoy margins in excess of 20%. This provides ample room to absorb rising costs.

There can be little doubt that the Indian ecosystem is maturing. However, the growth of offshoring to India has not peaked.

Reprinted by permission from BusinessWeek.

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Can Democracy Reach the Poor? A Presidential Perspective on Education, Poverty and Democracy in Latin America

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Dr. Alejandro Toledo was democratically elected President of Peru from July 2001-July 2006.

He was born in a small and remote village in the Peruvian Andes, 12,000 feet above sea level. He is one of sixteen brothers and sisters from a family of extreme poverty. At the age of six, he worked as a street shoe shiner and simultaneously sold newspapers and lotteries to supplement the family income.

Thanks to an accidental access to education, Dr. Toledo was able to go from extreme poverty to the most prestigious academic centers of the world, later becoming one of the most prominent democratic leaders of Latin America. He is the first Peruvian president of indigenous descent to be democratically elected in five hundred years.

He received a BA from San Francisco University in Economics and Business Administration. From Stanford University, he received a MA in Economics of Human Resources, a MA in Economics, and a PhD in Economics of Human Resources.

Larry Diamond is a senior fellow at the Hoover Institution; a Stanford professor of political science, and sociology by courtesy; and coordinator of the Democracy Program at the Center for Democracy, Development, and the Rule of Law (CDDRL). A specialist on democratic development and regime change and U.S. foreign policy affecting democracy abroad, he is the founding co-editor of the Journal on Democracy.

He has written extensively on the factors that facilitate and obstruct democracy in developing countries and on problems of democracy, development, and corruption, particularly in Africa. He is the author of Squandered Victory:The American Occupation and the Bungled Effort to Bring Democracy to Iraq; Developing Democracy: Toward Consolidation; and Promoting Democracy in the 1990s.

He received a BA, MA, and PhD from Stanford University, all in Sociology.

For more information about this event, please refer to the article in The Stanford Report.

Cubberley Auditorium (School of Education)
485 Lausen Mall
Stanford, CA 94305

Alejandro Toledo Speaker

Larry Diamond

CDDRL
Stanford University
Encina Hall, C147
616 Jane Stanford Way
Stanford, CA 94305-6055

(650) 724-6448 (650) 723-1928
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Mosbacher Senior Fellow in Global Democracy at the Freeman Spogli Institute for International Studies
William L. Clayton Senior Fellow at the Hoover Institution
Professor, by courtesy, of Political Science and Sociology
diamond_encina_hall.png MA, PhD

Larry Diamond is the William L. Clayton Senior Fellow at the Hoover Institution, the Mosbacher Senior Fellow in Global Democracy at the Freeman Spogli Institute for International Studies (FSI), and a Bass University Fellow in Undergraduate Education at Stanford University. He is also professor by courtesy of Political Science and Sociology at Stanford, where he lectures and teaches courses on democracy (including an online course on EdX). At the Hoover Institution, he co-leads the Project on Taiwan in the Indo-Pacific Region and participates in the Project on the U.S., China, and the World. At FSI, he is among the core faculty of the Center on Democracy, Development and the Rule of Law, which he directed for six and a half years. He leads FSI’s Israel Studies Program and is a member of the Program on Arab Reform and Development. He also co-leads the Global Digital Policy Incubator, based at FSI’s Cyber Policy Center. He served for 32 years as founding co-editor of the Journal of Democracy.

Diamond’s research focuses on global trends affecting freedom and democracy and on U.S. and international policies to defend and advance democracy. His book, Ill Winds: Saving Democracy from Russian Rage, Chinese Ambition, and American Complacency, analyzes the challenges confronting liberal democracy in the United States and around the world at this potential “hinge in history,” and offers an agenda for strengthening and defending democracy at home and abroad.  A paperback edition with a new preface was released by Penguin in April 2020. His other books include: In Search of Democracy (2016), The Spirit of Democracy (2008), Developing Democracy: Toward Consolidation (1999), Promoting Democracy in the 1990s (1995), and Class, Ethnicity, and Democracy in Nigeria (1989). He has edited or coedited more than fifty books, including China’s Influence and American Interests (2019, with Orville Schell), Silicon Triangle: The United States, China, Taiwan the Global Semiconductor Security (2023, with James O. Ellis Jr. and Orville Schell), and The Troubling State of India’s Democracy (2024, with Sumit Ganguly and Dinsha Mistree).

During 2002–03, Diamond served as a consultant to the US Agency for International Development (USAID) and was a contributing author of its report, Foreign Aid in the National Interest. He has advised and lectured to universities and think tanks around the world, and to the World Bank, the United Nations, the State Department, and other organizations dealing with governance and development. During the first three months of 2004, Diamond served as a senior adviser on governance to the Coalition Provisional Authority in Baghdad. His 2005 book, Squandered Victory: The American Occupation and the Bungled Effort to Bring Democracy to Iraq, was one of the first books to critically analyze America's postwar engagement in Iraq.

Among Diamond’s other edited books are Democracy in Decline?; Democratization and Authoritarianism in the Arab World; Will China Democratize?; and Liberation Technology: Social Media and the Struggle for Democracy, all edited with Marc F. Plattner; and Politics and Culture in Contemporary Iran, with Abbas Milani. With Juan J. Linz and Seymour Martin Lipset, he edited the series, Democracy in Developing Countries, which helped to shape a new generation of comparative study of democratic development.

Download full-resolution headshot; photo credit: Rod Searcey.

Former Director of the Center on Democracy, Development and the Rule of Law
Faculty Chair, Jan Koum Israel Studies Program
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Lectures

The Third Annual Globalization of Services Conference

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The Third Annual Globalization of Services Conference will explore the following questions:

  1. The changing geography of system integrators: The incumbent system integrators (SIs) are building up their developing nation service provision capability through acquisitions and internal expansion. The thrust of their expansion is to add capacity quickly. Can they manage it effectively? At a slower pace, the Indian SIs are doing the same in developed and developing nations: adding low cost workforces in developing countries, buying relationships in developed countries. Can they manage it effectively. Will growth rates and margins converge; if not, why not? What are some of the interesting differences between firm strategies?
  2. The changing business models of system integrators: The Indian system integrators appear to be driving a new, metric-based quality model that is driving price compression. Is this strong enough to provide a permanent advantage? IBM and others are responding with a combination of superior technology, client relationships and domain expertise, drawing upon their established strengths while also expanding in India and other low-cost developing countries. Are we witnessing a convergence to a common business model? Is there a European perspective? Is it different and does it make a difference?
  3. Product firms' globalization strategies (separate sessions on established and new firms): The IT product firms have to balance several additional factors that service firms like the SIs do not face when they globalize; among them, intellectual property protection, business development, managing innovation, research team coordination and marketing. How is this working, and what business models are they experimenting with? What are the differences between an established firm versus a startup?

All participants will receive a copy of Dr. Dossani's newest book India Arriving: How this Economic Powerhouse is Redefining Global Business. Details of this can be found through the link below. Provided through the generosity of Arada Systems.

Details about the previous two events can be found at:

Globalization of Services

The Second Annual Globalization of Services Conference

Conference Sponsors:

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Bechtel Conference Center

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Globalization of Services Conference

FSI welcomes new faculty

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The Institute welcomes five new full-time faculty and two distinguished visitors in the current academic year. The latest additions represent consolidation of ongoing programs, such as those in homeland security and international relations and expansion of its research agenda into Asian comparative healthcare and issues in contemporary Europe.

Below are brief profiles of FSI's new faculty, all of whom have offices in Encina Hall.

Martha Crenshaw--FSI Senior Fellow, CISAC

Formerly a professor of government at Wesleyan University, Martha Crenshaw has a distinguished record of scholarship and policy engagement in the area of terrorism studies. Her early work on the National Liberation Front in Algeria 30 years ago made seminal contributions to the understanding of terrorist psychology and organizational structure, themes that are helping to animate the agenda for future research in the field. Her work with the U.S. Department of State and the intelligence community in the wake of 9/11 has played an important role in a major Department of Homeland Security grant she brought to Stanford this year.

Karen Eggleston--FSI Center Fellow, Shorenstein APARC and CHP/PCOR

Karen Eggleston joined Stanford from Tufts as an Asian comparative healthcare scholar whose work focuses on health systems and design incentives, especially in lower- and middle-income countries. She has co-authored Welfare, Choice and Solidarity in Transition: Reforming the Health Sector in Eastern Europe with esteemed economist János Kornai, which has been translated into Chinese, Vietnamese, Polish, and Hungarian. Her current research examines the Chinese healthcare system and how ownership factors affect hospital performance.

Siegfried S. Hecker--FSI Senior Fellow, Professor (Research), Management Science and Engineering, and Co-director, CISAC

Director emeritus of the Los Alamos National Laboratory, material scientist Sig Hecker became CISAC's co-director in early 2007. His research interests include plutonium science, nuclear weapons policy and international security, nuclear security, including nonproliferation and counter terrorism, and cooperative nuclear threat reduction. Over the past 15 years, he has fostered cooperation with the Russian nuclear laboratories to secure and safeguard the vast stockpile of ex-Soviet fissile materials.

Josef Joffe--FSI Senior Fellow, Forum on Contemporary Europe, and the Marc and Anita Abramowitz Fellow, Hoover Institution

A journalist-scholar and publisher-editor of the German weekly Die Zeit, Joe Joffe is in residence at Stanford during fall quarter. His work focuses on U.S.-Europe relations, and is noteworthy for its ability to bridge the worlds of journalism, academics, and policy analysis. He serves on several editorial boards and is a member of the International Institute for Strategic Studies. His work has been acclaimed through a number of awards, including Germany's Theodor Wolff Prize.

Phillip Lipscy--FSI Center Fellow and Assistant Professor, Political Science

Just completing his PhD in government at Harvard, Phillip Lipscy joins Stanford as a jointly held appointment in political science and FSI. His research focuses on international relations in Asia with particular attention to the domestic sources of foreign policy conduct. He is a comparativist with training in international relations, a rarity in the field of contemporary Japanese politics. He is bicultural, having grown up in Japan, and his foreign policy interests encompass the entire East Asia region.

William Howard Taft IV--The Warren Christopher Visiting Professor of International Law and Diplomacy, FSI and the Stanford Law School

Will Taft will be in residence at FSI and the Law School during the 2007-08 academic year as a visiting scholar and teaching Contemporary Issues in International Law and Diplomacy and Foreign Relations Law. Taft has held several private and public positions, including appointments at the Federal Trade Commission, Office of Management and Budget, and U.S. Department of Health, Education and Welfare. In 1981, he became general counsel to the Department of Defense followed by an appointment as the Deputy Secretary of Defense in 1984. Taft also served as U.S. ambassador to NATO and the U.S. Department of State's legal advisor, the highest legal position in the department. Taft is currently counsel in the office of Fried Frank Harris Shriver & Jacobson.

Alejandro Toledo--FSI Distinguished Payne Lecturer, CDDRL

Having overcome extreme childhood poverty, Alejandro Toledo became the first Peruvian president of indigenous descent to be democratically elected in 500 years. During his presidency, the Peruvian economy registered one of the fastest growing economies in Latin America. The central aim of his presidency was the fight against poverty through health and educational investment. Toledo will be in residence at CDDRL during the 2007-08 academic year. His work will be showcased in a series of talks, workshops, and other activities as part of his Payne lectureship.

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Phillip Lipscy

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Former Thomas Rohlen Center Fellow at the Freeman Spogli Institute for International Studies
Former Assistant Professor of Political Science
phillip_lipscy_2018.jpg PhD

Phillip Y. Lipscy was the Thomas Rohlen Center Fellow at the Freeman Spogli Institute for International Studies and Assistant Professor of Political Science at Stanford University until August 2019. His fields of research include international and comparative political economy, international security, and the politics of East Asia, particularly Japan.

Lipscy’s book from Cambridge University Press, Renegotiating the World Order: Institutional Change in International Relations, examines how countries seek greater international influence by reforming or creating international organizations. His research addresses a wide range of substantive topics such as international cooperation, the politics of energy, the politics of financial crises, the use of secrecy in international policy making, and the effect of domestic politics on trade. He has also published extensively on Japanese politics and foreign policy.

Lipscy obtained his PhD in political science at Harvard University. He received his MA in international policy studies and BA in economics and political science at Stanford University. Lipscy has been affiliated with the Reischauer Institute of Japanese Studies and Weatherhead Center for International Affairs at Harvard University, the Institute of Social Science at the University of Tokyo, the Institute for Global and International Studies at George Washington University, the RAND Corporation, and the Institute for International Policy Studies.

For additional information such as C.V., publications, and working papers, please visit Phillip Lipscy's homepage.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cohen leads Google.org course on global poverty and development

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In September Google.org launched the first of three courses on its main areas of philanthropic activity--Global Development, Global Health, and Climate Change. Joshua Cohen, director of the Program on Global Justice (PGJ) at FSI Stanford and professor of political science, philosophy, and law, is moderating the 10-week course, which focuses on understanding poverty and development at the global, national, local, and personal levels.

"Google has an extraordinary collection of creative employees," says Cohen. "This course on global poverty aims to enlist their energetic creativity in addressing one of our most commanding moral challenges."

The course on global poverty and development meets once a week at a Google headquarters. Each two-hour session features guest speakers on development-related issues such as education and health, equitable financial markets, globalization, and population mobility. On October 3, Rosamond L. Naylor, director of the Center on Food Security and the Environment (FSE) at FSI Stanford, co-taught a session on productive agriculture for the 21st century with Frank Rijsberman, Google.org director of water and climate adaptation issues.

Cohen opens each session, synthesizing points from previous weeks, and then moderates the hour-long discussion between guest speakers and Google employees that follows the speaker presentations. The 200-person capacity of the room is superseded by participation from employees at more than 20 remote locations. On October 3, Google.org Executive Director Larry Brilliant joined the discussion as well.

In a related collaboration, Cohen may also be leading a small-group seminar, "Global Poverty 2.0," at Stanford for Google employees as well as graduate students and colleagues. Global Poverty 2.0 is expected to meet on Friday afternoons and draw on readings from history, sociology, political science, economics, and philosophy. Students would be required to make one presentation and also to submit a 3,000-word project proposal for dealing with some aspect of the large problem of global poverty.

Google.org is the philanthropic arm of Google and the umbrella for its commitment to devote employee time and one percent of Google's profits and equity toward philanthropy.

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Counterinsurgency Without Killing: Public Goods and Violence in the Iraqi Civil War

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Jacob Shapiro (speaker) is a CISAC postdoctoral fellow. His primary research interest is the organization of terrorism and insurgency. His other research interests include international relations, organization theory, and security policy. Shapiro's ongoing projects study the balance between secrecy and openness in counterterrorism, the impact of international human rights law on democracies' foreign policy, the causes of militant recruitment in Islamic countries, and the relationship between public goods provision and insurgent violence in Iraq and Afghanistan. His research has been published in International Security, International Studies Quarterly, Foreign Policy, and a number of edited volumes. Shapiro is a Harmony Fellow at the Combating Terrorism Center at the United States Military Academy. As a Naval Reserve officer he was assigned to the Office of Naval Intelligence and the Naval Warfare Development Command. He served on active duty at Special Boat Team 20 and onboard the USS Arthur W. Radford (DD-968). He holds a PhD in political science and an MA in economics from Stanford University and a BA in political science from the University of Michigan.

Jeremy Weinstein (discussant) is an assistant professor of political science at Stanford University and an affiliated faculty member at CDDRL and CISAC. Previously, he was a research fellow at the Center for Global Development, where he directed the bi-partisan Commission on Weak States and US National Security. While working on his PhD, with funding from the Jacob Javits Fellowship, a Sheldon Fellowship, and the World Bank, he conducted hundreds of interviews with rebel combatants and civilians in both Africa and Latin America for his forthcoming book, Inside Rebellion: The Politics of Insurgent Violence. He has also worked on the National Security Council staff; served as a visiting scholar at the World Bank; was a fellow at the Woodrow Wilson International Center for Scholars; and received a research fellowship in foreign policy studies at the Brookings Institution. He received his BA with high honors from Swarthmore College, and his MA and PhD in political economy and government from Harvard University.

Reuben W. Hills Conference Room

Jeremy Weinstein Speaker
Jacob N. Shapiro Speaker
Seminars
Conflict Resolution

Leaders, Accountability and Foreign Policy in Non-Democracies

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Jessica Weeks is a PhD candidate in the Department of Political Science at Stanford University, the 2007-2008 Zukerman Fellow and a pre-doctoral fellow at CISAC, and the Teaching Assistant for the CISAC Honors Program. Her dissertation, "Leaders, Accountability, and Foreign Policy in Non-Democracies" studies how different levels of domestic accountability affect leaders' decisions about international conflict. Additional research investigates the effectiveness of military interventions, and the escalation and resolution of international military crises.

Jessica graduated summa cum laude with a BA in Political Science from The Ohio State University in 2001, and received an MA in International History and Politics from the Graduate Institute of International Studies in Geneva, Switzerland.

Reuben W. Hills Conference Room

Jessica L. Weeks Speaker
Seminars
Conflict Resolution
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