Follow the Intellectual Property, How does Industry pay Programmers' Salaries when they move the related IP rights to offshore taxhavens?"
AbstractIn the ongoing discussion about offshoring in the computer and data-processing industries, the 2006 ACM report Globalization and Offshoring of Software addressed job shifts due to globalization in the software industry. But jobs represent only half of the labor and capital equation in business. In today’s high-technology industries, intellectual property (IP) supplies the other half, the capital complement. Offshoring IP always accompanies offshoring jobs and, while less visible, may be a major driver of job transfer. The underlying economic model—involving ownership of profits, taxation, and compensation of workers from the revenue their products generate—has not been explicated and is largely unknown in the computer science community. This article presents the issue of software income allocation and the role IP plays in offshoring. It also tries to explain why computer experts lack insight into the economics of software, from investments made, to profits accumulated, to capital becoming available for investment in new projects and jobs.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30151.
Date of creation: 06 Jun 2009
Date of revision: 07 Apr 2011
Publication status: Published in Communications of the ACM 1.54(2011): pp. 67-74
Offshoring; offshore outsourcing; tax havens; job loss; intellectual property; tax avoidance; non-routine profits;
Find related papers by JEL classification:
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
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