We cover chapter $3$ & $4$ in Week $3$ module. You need to submit a $2-3$ minute or so long video presentation on the following:

Read 'The Challenge of Offshoring' on page $147$ of your textbook, and then answer questions #$2.$

The Challenge of Offshoring"

Outsourcing, as noted in $ Chapter $1,$ is the process of assigning various functions, such as accounting, production, security, maintenance, and legal work to outside organizations. In Canada, companies have outsourced payroll functions, accounting, and some manufacturing operations for many years. However, the shift to primarily low$-$wage global markets, called offshoring $($or offshore outsourcing$),$ has become a major issue. In $2019,$ Export Development Canada helped $17,000$ Canadian businesses expand into international markets, an increase from ten years ago. Canadian companies such as Bombardier Inc. $($manufactures state$-$of$-$the$-$art planes and trains$)$ and Gildan Activewear Inc. $($one of the world's larg.$-$

$[6$:$23$ p$.$m$.,2024-01-25]$ Mayuri: manufacturing at the low end of the technology scale, and India focuses on call centres, telemarketing, data entry, billing, and low$-$end software development.

However, China is intent on developing advanced manufacturing technology and India has a deep pool of scientists, software engineers, chemists, accountants, lawyers, and physicians. The technology talent in these nations also keeps growing: China graduates $250,000$ engineers each year and India about $150,000.$ A World Economic Forum report states that China had $4\mathrm{.}7$ million STEM graduates in $2016,$ and India with $2\mathrm{.}6$ million that same year. This is $5$ to $9$ times more STEM graduates than what the United States sees each year. However, what was once a prized degree has become increasingly ineffective in both India and China, as a recent report from India claiming approximately $80$ percent of their engineering graduates do not have the skills to work in software engineering or other programming positions.

When you consider the impact of offshoring on Canada, research supports that more than two$-$thirds of imported services are from the United States, not China and India. A Statistics Canada paper finds that globalization and technology are the two key factors driving offshoring by Canadian companies. Services offshoring does not seem to affect productivity or employment. It does seem to reduce wages in the servicesproducing sector, though not in the goods$-$producing sector. Finally, on an industry$-$by$-$industry basis, rising offshoring of services seems to be associated with rising value$-$added activities. In the financial sector, for instance, low value$-$added activities such as general accounting are outsourced while high value$-$added activities such as strategizing are kept in$-$house and in$-$country.

$2.$ Do you think that offshoring is detrimental to the Canadian economy? Explain.