March 2004

Open Economies: Open Minds

Outsourcing: Long-term gains for all

It is true that outsourcing to India and greater trade with China do cause an immediate loss of jobs, but these are more than made up for by the creation of new jobs elsewhere.

The textile sector once employed a large number of American workers, and the US car manufacturers once dominated the world.

If the jobs that were lost in these sectors were protected through trade restrictions, there could be more textile and automobile workers in the US today, but there would be fewer jobs on the whole.

The freer trade with China and the unprecedented collaboration with Indias information technology sector, in the form of both admitting computer scientists to Silicon Valley and outsourcing work to India, gave the US the competitive edge.

It is this openness that the US has used time and again in its history to keep the lead.

Trade and exchange help both sides. A recent McKinsey study estimates that for every dollar of value created by US outsourcing, the US manages to capture 78%, and 22% accrues to the receiving country.

Globalisation cuts both ways. Its better to take advantage of it than to succumb to the very short term and entirely political benefits of protectionism.

Liberties lost: terrorism wins

EU to require passenger data from airlines

Airlines flying into the European Union will have to provide detailed passenger information to immigration and law enforcement authorities under an agreement reached yesterday by EU justice and interior ministers.

The agreement highlights the turnround in the attitude of EU governments towards intelligence data-gathering following this months bombings in Madrid.

According to Michael McDowell, the justice minister of Ireland, Post-Madrid, the European parliament may have a rethink about whether privacy is such an absolute right.

Todays quote of the day suddenly looks remarkably prescient.

Mark Baranowski

Just to let you know that the latest feature has just gone up on the main site: An interview with Mark Baranowski

A step in the right direction

Gay couples to get joint rights

Gay and lesbian couples are to be given the chance to get similar legal rights to married couples under a new Civil Partnership Bill.

The measures, unveiled on Wednesday, allows legal recognition for gay couples for the first time.

The Bill gives the legal rights to same-sex couples who register their partnership at a civil ceremony.

Its a good start - I dont see any reason why gay people shouldnt have the same rights as the rest of us.

Quote of the Day: Defending Liberty

[O]nce fundamental liberties are withdrawn to deal with one emergency, it is easy enough to find other emergencies to apply them to.
- Charles Kennedy

Quote of the Day: Objection to Oppression

There are basic human rights that must be defended. The strict adherence to state sovereignty as the defining factor in international law, far from being a guard against acts of aggression, has become a barrier that allows oppression to continue unchecked by the international community.
- Ann Clwyd

ITs a service industry now

Microsoft exec: Open-source model endangers software economy

A Microsoft Corp. official yesterday questioned how the software industry could survive if users are getting software for free through open-source.

For-profit software companies will struggle for a business model against free software, said Microsoft Distinguished Engineer Jim Gray. He served on a panel last night on software trends, XML, Web services and grids at the Software Development Conference and Expo West 2004 show in Santa Clara, Calif.

The thing Im puzzled by is how there will be a software industry if theres open-source, Gray said, disagreeing with a fellow panelist over the effects of open-source technology.

The idea that open source software is going to kill off the software industry doesnt make a great deal of sense unless, of course, you happen to be a company whose products provide no competitive advantage.

A lot of software - operating systems, for example - has become a commodity. Companies need it to run their business, but it provides no commercial or competitive advantage in itself. Firms that try to charge more than their competitors without providing any additional value for the additional price will suffer - this is as true for the software industry as it is for any other.

However, not all software is a commodity. Some software - SAP or J.D. Edwards OneWorld, for example - is bought in order to gain a competitive or commercial advantage. As long as these companies continue to provide software that adds value to a business, companies will continue to pay for it.

In fact, open source software provides an opportunity for application providers such as these. By porting their products to (cheaper) open source environments, these companies have to potential to move into new markets.

But that isnt the complete picture.

According to research from The Yankee Group, software companies now derive more than 50% of their revenue not from software licences, but from services.

The fact that even IBM is embracing open source solutions such as Linux demonstrates that there is a lot of money to be made in focusing on industry expertise rather than trying to constantly improve other peoples wheels.

Open source software will have an impact on the software industry and, as such, it presents both challenges and opportunities. Companies that stay wedded to entirely proprietary business models will struggle to survive while those that add value to cheap and reliable solutions will flourish.

When the drugs dont work

Prozac Nation, UK

Hundreds of thousands of people are being prescribed powerful anti-depressants that they may not need because doctors are using the pills as a quick fix solution to mild anxiety problems, according to a report published today.

Desperate shortages of NHS counsellors and therapists mean that over-worked GPs often feel they have no option but to hand out anti-depressants to people who may only need an outlet for discussing their problems. Eighty per cent of GPs admit that they are over-prescribing drugs such as Prozac and Seroxat when patients may simply need someone to talk to.

What the hells wrong with beer? And if you need someone to talk to, go to the pub.

A new twist on the Passion of Christ incites anti-semitism debate

Shiite Cleric Urges Kuwait to Lift Passion Ban

We demand the [Kuwaiti] Information Ministry to allow the film The Passion of The Christ, peace be upon Him, to expose the role of the Jews, the killers of prophets, said Ayatollah Mohammad Baqer al-Mohri.

This is the first case Ive heard of someone wanting the film to be shown because it incites hatred.

RIP Sir Peter Ustinov

And now for some sad news. Sir Peter Ustinov, one of the greatest British actors - ever - has died, aged 82.

Its impossible to do justice to his career in a single blog entry. Instead, I suggest you go here and enjoy some of his quotes.