The National Academy of Public Administration

Academy News

FOR IMMEDIATE RELEASE: November 30, 2006
CONTACT: Eric Landau
(202) 204-3624

ACADEMY PANEL FINDS THAT SERVICES OFF-SHORING IS SMALLER THAN PERCEIVED

Washington, DC — November 30, 2006 — An expert Panel of the National Academy of Public Administration released its second report on the topic of services off-shoring. Entitled Off-shoring: How Big Is It?, the report notes that services off-shoring during the most recent 1999-2003 period is much smaller than many popular perceptions suggest. Using confidential firm-level (micro) and industry-level data from the Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS), the Panel found little evidence of consistent growth in services off-shoring during this period among the multi-national corporations and industries studied—pharmaceutical and medicine manufacturing, architectural, engineering and related services, computer system design and related services, and business support services. However, the extent of services off-shoring did vary by industry. Equally important, the Panel did find that services outsourcing to domestic firms was 10 to 30 times greater than services off-shoring in the industries studied. These two distinctly different activities are often mistakenly considered the same – a serious problem since their economic effects differ greatly. The key difference is that services outsourcing shifts services jobs among domestic U.S firms, while services off-shoring can cause at least an initial loss in U.S. jobs when domestic firms use imported services, produced with overseas labor, to replace domestic services workers.

In its first report entitled Off-shoring: An Elusive Phenomenon, the Panel carefully distinguished between services outsourcing and off-shoring and described the complex economic effects, particularly the direct and indirect employment effects, involved with both. In trying to determine the extent and impacts of services off-shoring in its second report, the Panel encountered a number of data gaps and issues that prevented a complete assessment of this “elusive phenomenon”. The Panel urged that BEA and BLS be provided the resources needed to improve the data on services off-shoring now to more fully assess the extent and economic effects of services off-shoring while the phenomenon is small. The Panel recommended that BEA obtain more consistent and detailed data on the types of services imported and BLS restructure a current survey to provide estimates of occupational changes over time.

Both reports are available on the Academy’s web site at www.napawash.org in both PDF and HTML formats.

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The National Academy of Public Administration is an independent, non-partisan, non-profit corporation chartered by Congress to provide trusted advice to government agencies on issues of governance and public management. Under its Congressional charter, the Academy is charged with advancing the effectiveness of government at all levels—federal, state and local.

For more information about the National Academy of Public Administration, visit http://www.napawash.org.

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Academy Experts Recommend Strategies for Managing Effectively in Post-9/11 World

“The events of September 11, 2001 revealed serious deficiencies in government organization, systems and management. National Academy of Public Administration Fellows recommend strategies to manage effectively in a post-9/11 world in Meeting the Challenge of 9/11: Blueprints for More Effective Government, published this month.

The book, edited by Fellow Thomas H. Stanton, tackles a wide range of issues, including designing an organization that provides a strong government capacity to deliver services citizens need and deserve; making the Undersecretary for Management a key linchpin in bringing DHS functions together; restoring the President’s capacity to manage effectively; using the imperative of national security to improve federal, state and local relations especially with critical services like police, fire and health; capitalizing on tested and proven management strategies to surmount new and upcoming challenges for our nation; sorting through constitutional alternatives for holding government contractors accountable for the work they perform; and transforming military personnel system policies to avoid staffing crises during the War on Terror.

“This book provides invaluable insights and recommendations on how to improve government organization and performance as our nation faces new and imposing threats here and abroad,” Academy President Howard Messner said.

Buy “Meeting the Challenge of 9/11: Blueprints for More Effective Government”

The views expressed in this book are those of the Fellow. They do not necessarily reflect the views of the Academy as an institution.