should deliver net economic benefits. However, some questions have been raised about whether this will be the case.
Offshoring is proving to be a boon to several emerging economies, particularly India and China, and long-term U.S. interests will be served by these countries and other developing economies becoming integrated into the global economy and raising their standards of living. Inevitably, this will also lead to improved engineering capabilities in these countries relative to the United States. If America maintains its engineering capability, and if the emerging global networks are open to participation by Americans and American organizations, this might then be a “win-win” situation, because U.S. companies would also benefit directly through expanded markets for their products.
But what of the possible downsides? It has been argued that offshoring and other forms of trade can be harmful to the U.S. economy and U.S. national interests. For example, even if offshoring brings short-term economic benefits to the United States in the form of gains to companies and consumers, it could eventually undermine America’s ability to innovate.
In addition, some prominent economists are concerned that the distributional impacts of offshoring on engineers and other service-sector workers in the United States will pose serious challenges to freer trade. They argue that offshoring could lead to the degradation of overall engineering capability in the United States. Thus, even if the U.S. engineering enterprise and economy as a whole are better off with offshoring, those who are most vulnerable to competition might suffer severe hardships. The question is how we should address these distributional issues.
FINDING 9. As the debate about offshoring continues, it will be important to determine whether current U.S. policies, including immigration policies, provide artificial advantages or incentives for offshoring.
Although a detailed examination of immigration policies is beyond the scope of this study, immigration issues are closely related to offshoring. The immigration of scientists and engineers, the training of foreign students, and the overall openness of the United States to foreign talent have clearly been a boon to U.S. engineering activities and the U.S. economy. But some argue that the current H-1B and L-1 visa programs facilitate offshoring. Policies that, in effect, subsidize or provide artificial incentives for the offshoring of engineering, they say, are just as counterproductive and market-distorting as artificial barriers or penalties for offshoring would be. Future studies should investigate the interactions between immigration policies and offshoring, particularly in engineering.
FINDING 10. Security concerns related to the offshoring of engineering have been raised, specifically for the information technology and construction industries.
Finally, national security concerns have been raised that offshoring in the construction engineering and services industry might lead to detailed plans and other information about U.S. buildings and infrastructure, as well as geospatial data, falling into the wrong hands. Relevant professional societies are already working to ensure that sensitive information can be protected within the existing legal framework.
Concerns have also been raised about whether the globalization of software development could pose a serious threat to national security. For example, accidental defects or maliciously placed code might compromise the security of Department of Defense networks. The Defense Science Board is examining those concerns.
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