When Nobel-winning economist Joseph Stiglitz used the expression 'Globalisation and its Discontents' as the title of his highly acclaimed book, little would .he have foreseen the backlash that globalisation has since generated in his own country. The Minnesota senate has passed a Bill (44 'ayes', 19 'noes') to bar outsourcing of jobs under state contracts. It stipulates that the jobs should be executed by American Citizens or individuals authorised to work in the US. Isn't this the worst kind of protection? If you can buy a European or American car in Japan why can't you hire a techie in Bangalore?

Of all people, Americans should know that protectionism is not the answer to the problem of job losses. Of the 2.2 million jobs lost in the US since president George Bush took over, very few have been lost. to outsourcing, Job displacement is the direct result of innovation and productivity, key features of the new economy. The main reason for joblessness in the US is the lack of commitment on the part of US corporations to social responsibility and good corporate governance practices. One of the primary responsibilities of corporations is to continuously strategise for new technologies, products and services, and train and retrain staff to meet future challenges.

All through the 1990s, corporations made extensive use of the merger and acquisition route. This resulted both in a downsizing of jobs and a sharp rise in the salaries of CEOs. In the name of productivity, many of the mergers have eventually destroyed shareholder value. During this period, while the salary of an average US worker has increased by a mere 3 per cent, the remuneration of CEOs has gone by a whopping 600 per cent. The differential, which, 20 years ago, was 1:20, has now risen to 1:400.

The main purpose of outsourcing is to free up company resources used on repetitive and non-core work and put them to more productive use. This creates additional wealth and, more jobs. As people like T J Rogers, head of Cyprus Semiconductors, have argued, outsourcing has, in fact, helped create more jobs for the indigenous workforce. It is significant that unemployment rate in Silicon Valley is much lower than the national average.

The trouble with most American corporations, unfortunately, is that they work on short-term goals. No wonder that a third of the companies which figured in the 'Fortune 500' list seven years ago, aren't there today. These companies invested little on devising strategies for the future, including training their employees for new jobs.

The soul of the new economy lies in innovation. The competitive differentiator of the new economy is not perfection but difference. Job losses have occurred in companies which have neither adequately invested in products and services of the future nor devised schemes for training and retraining of staff; indeed, which don't even recognis/3 the role the employees play in the growth of any enterprise.

Scandals such as Enron and Worldcom are pointers to the greed which has permeated the top corporate echelons in America. They show how, instead of generating revenues, companies have come to be engaged in manipulating their accounts. The irony of course is that these companies continued to receive the approval of rating agencies even though they lacked transparency, accountability, i equity or employee focus in their governance processes.

Increasingly, the career of managers depends on how well the shares of their companies are doing on the stock market. Hence, 'the next quarterly report' has become a major concern for a large number of corporations. This has inevitably distorted corporate priorities in favour of window-dressing of figures rather than the generation of real value. Companies are today happy to cut costs through downsizing, even if it means ignoring top line opportunities, which will increase revenue and create jobs. The irony is that corporations, which have invested in employees and innovation, are on a continuous upward graph. Medtronic, a US medical technology company providing life-long solutions for people with chronic diseases, is a classic example.
It has demonstrated a steady improvement in business performance with revenue and earnings increasing steadily for 64 consecutive quarters. More than two-thirds of Medtronic's revenue comes from products launched during the last two years. Unlike companies obsessed with the short-term, Medtronic has shown that the enhancement of customer value, through a culture of constant innovation and retraining of staff, is the best way of increasing long-term shareholder value. Across the world, the worst threat to business stems from the sharp disparities that exist on our planet. People in an interconnected and interdependent global economy are not going to sit back and suffer silently. They can live in poverty, but will not tolerate injustice.

The primary purpose of globalisation is to reduce these disparities, and not simply to bring Guccis and Louis Vuittons to a handful of urban rich in poorer countries. Globalisation will have no future if it does not benefit the poor. It is possible to globalise without having to confront its discontents. Indeed, outsourcing offers a window of opportunity in the long journey towards a more harmonious and prosperous world.