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Outsourcing jobs a security risk: US intelligence
Indian Express Newspapers (Bombay) Ltd ^ | March 20, 2004

Posted on 03/20/2004 4:06:30 AM PST by sarcasm

Washington, March 20:With as many as three million software industry jobs poised to move offshore by 2015, the US industry needs to protect itself against potential security risks, including economic espionage, the chairman of the National Intelligence Council has warned.

“While outsourcing of business functions is a growing trend that helps firms cut costs, it also brings potential security risks--particularly when outsourcing involves entities owned and operated abroad,” Robert L. Hitchings, Chairman of the council, which is the US intelligence community's think tank said while addressing the international security management association in Scottsdale.

He said besides outsourcing, writing computer codes aboard and importing hardware entails security risks. “As many as 3 million software industry jobs could move offshore by 2015, with 70 per cent of these jobs moving to India, 20 per cent to the Philippines and 10 per cent to China,” he said. Warning that corporate leaders need to be on guard.

“Corporate leaders need to be on guard and know who their business partners are and what security measures they have in place to protect against loss, whether through unintended leakage of proprietary business information, deliberate thefts of intellectual property, or outright economic espionage," Hitchings said.

While technology now allows companies to have their most sensitive proprietary computer code written overseas, he said the inability of companies to sufficiently vet the personnel involved in these activities can create a “significant vulnerability.”

US openness to foreign trade and investment and its commitment to global information sharing through academic and scientific exchange, Hitchings said unfortunately leave US technologies highly exposed to foreign exploitation. Pointing out that collectors last year employed a wide variety of techniques in their quest to circumvent US restrictions in the acquisition of sensitive manufacturing processes, he said foreigners often through middlemen acquired sensitive US technologies simply by requesting them via e-mail, faxes or telephones.

Globally networked information systems, he said, also present vulnerabilities, and even the simplest computer threats pose real risks for US companies’ business interests and proprietary knowledge.

Information technology, said Hutchings, has become as important to the US economy as oil, and the growing dependency of the US on foreign it "raises concerns for corporate as well as national security." for instance, he said, half of the world's laptops, one quarter of desktop computers, and half of all PC motherboards are now assembled in China. Taiwan is now responsible for about 70 per cent of all semiconductor production for hire--producing chips designed and marketed by others.”

This growing US dependence, said Hutchings, makes US IT firms vulnerable to interruptions of foreign-built critical components, whether intentional or accidental. “Foreign supply disruptions could suspend US firms' deliveries of finished systems within only a few days, as most carry limited inventories.”


TOPICS: News/Current Events
KEYWORDS: nationalsecurity; outsourcing
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To: Liz
In point of fact, we need to be naming names......Dim CEO's who outsource......then donate bigtime to John Kerry with their profits.

Can you fault commpanies for doing what is perfectly legal to make money? This is in the realm of government: to provide tax incentives (or at least reduce the DIS-incentives) to hire locally instead of in foreign countries.
41 posted on 03/20/2004 8:26:49 AM PST by lelio
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To: sarcasm
“While outsourcing of business functions is a growing trend that helps firms cut costs, it also brings potential security risks--particularly when outsourcing involves entities owned and operated abroad,” Robert L. Hitchings, Chairman of the council, which is the US intelligence community's think tank said while addressing the international security management association in Scottsdale.

Bump!

42 posted on 03/20/2004 8:59:43 AM PST by LibertyAndJusticeForAll
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To: lelio
Don't miss the point. Democrats are making outsourcing into a political issue to lacerate Bush. We have to point out that Kerry and Dims are outsourcers and that Heinz made hundreds of millions outsourcing jobs. Democrats want to make the issue one of outsourcing's rightness or wrongness. We're saying....hold on, don't pick on Bush for what you're doing.
43 posted on 03/20/2004 9:04:56 AM PST by Liz
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To: A. Pole
Experts Agree: Every Reason for Optimism!
44 posted on 03/20/2004 9:13:40 AM PST by Mortimer Snavely (Comitas, Firmitas, Gravitas, Humanitas, Industria)
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To: Liz
We have to point out that Kerry and Dims are outsourcers and that Heinz made hundreds of millions outsourcing jobs. Democrats want to make the issue one of outsourcing's rightness or wrongness. We're saying....hold on, don't pick on Bush for what you're doing.

Yer sounding like the Democrats...It's pretty tough defending Bush by saying, ok, we know he's a bum, but so are you guys...So we'll stick with our bum...Or, our bum is still better than your bum...

Besides, if Heinz sends their foreign made pickles back to the US, then yes, we're dealing with apples vs. apples...But if they don't there's no argument...

45 posted on 03/20/2004 9:24:03 AM PST by Iscool
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To: Liz; BlackElk
While it's all well and good to point out that Kerry is on the wrong side of trade issues (and tax, and regulatory, as well) it's not going to do GWB much good.

Unless AlQuaeda makes the utterly stupid move of dropping a terror incident into the US within 40 days of the election, this will be a tough mountain for GWB to climb.

History demonstrates conclusively that Americans vote their pocketbooks if there is not a national security crisis--and the more people I talk to, the worse the situation is re: pocketbooks, at least here in the Industrial Midwest (and it's spreading to the South, BTW.)

Further, maintenance of a large armed presence in Iraq is becoming more and more difficult to justify; even conservatives (not paleo-nuts, just conservatives) of my acqaintance are beginning to mumble, quietly, that we've done the job, let's get the hell out of there.

Thus, GWB's total disregard for lawless immigration, pocketbook issues, and reckless spending by Congress now combines with less-and-less popular occupation in Iraq.

Get the picture? He's in trouble.

46 posted on 03/20/2004 9:25:51 AM PST by ninenot (Minister of Membership, TomasTorquemadaGentlemen'sClub)
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To: Iscool
There is no technical job (engineering, computer science, etc.) that cannot and will not be shipped overseas. We used to say that the Internet had caused a new economy. I believe it has, in allowing massive amounts of technical work to be offshored.

I work as a Java/Web developer for a large American corporation. We need more developers, but our bosses say any new developers must be in India. Our jobs are safe for the time-being, but no new people will be hired and eventually we will all leave through attrition. The whole picture looks very bleak to me. I used to be an IT consultant. You could go from one job to the next with no layoffs in between. Those days seem like they are gone forever.

I believe that we need to put a tariff on all imported goods and services, as has been advocated by Steven Pearlstein of the Washington Post.

BTW, if you're a free trader, tell me which position I can train for that will provide a good income for the years ahead. I already have a MBA and a Bachelors in Computer Science.
47 posted on 03/20/2004 9:40:37 AM PST by CompProgrammer
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To: All
John Chen, CEO of Sybase Inc. told Don Tennant of Computerworld, June 23, 2003, about the security implications of offshore outsourcing.

"I think your readers should be more concerned about the whole outsourcing phenomenon. Because if you have so many foreigners creating code that is ultimately shipped back to the U.S., and if you have the U.S. government policy of buying off-the-shelf software, guess what's happening?

"We may be unknowingly allowing backdoor traps in the code. Hackers could very well be putting in compromising code. We have to be careful, because more and more companies, by necessity, are building their code overseas."

Mr. Chen is a big fan of H1B so the patented "free" traders' invective that some use such as "protectionist" or "racist" is even sillier.

48 posted on 03/20/2004 9:50:09 AM PST by WilliamofCarmichael (Benedict Arnold was a hero for both sides in the same war, too!)
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To: CompProgrammer
RE: "free trader, tell me which position I can train for that will provide a good income for the years ahead."

Uh, the high paying jobs that are acomin'. Next question.

Oops. Wrong question.

You see, no American has a right to job! If the business decides to outsource and it interferes with the American's pursuit of happiness to make a living then that's tough.

Of course when the government interferes with the corporations' pursuit of happiness to make maximum profits.. well, er.. that's just not fa-a-a-a-air.

49 posted on 03/20/2004 10:01:59 AM PST by WilliamofCarmichael (Benedict Arnold was a hero for both sides in the same war, too!)
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To: DustyMoment
"His campaign war chest scares the Dems right now and they would love to trick him into spending as much of it as they can on Kerry before the convention and pulling a surprise."

The only thing that can stop John Kerry from winning the Democratic nomination now is an endorsement from Al Gore.
50 posted on 03/20/2004 10:03:21 AM PST by phil_will1
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To: phil_will1
The only thing that can stop John Kerry from winning the Democratic nomination now is an endorsement from Al Gore.

I'm going to work up a chart for all states and how many jobs they've lost (Walter Williams' "we're not sending jobs overseas" notwithstanding) versus who they have voted for.

The top 4 states that lost jobs since 2001 are Indiana, Mississippi, Ohio and Michigan. Gore won Michigan's 18 electoral votes, while Bush picked up the other states' 40 votes. If anyone thinks this is a Bush cakewalk they're delusional.
51 posted on 03/20/2004 10:14:02 AM PST by lelio
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To: kezekiel
"I guess that means that intellectual protection is unnecessary, except perhaps only for Americans against other Americans."

I was wondering when someone would bring up this aspect. One of the things that I learned from being with technology companies for a number or years is that countries around the world vary widely with respect to the strength of their intellectual proporty laws. The US is generally regarded as having the strongest laws and best enforcement in the world - which is one of the reasons that our technologies have led the way for the past few decades. The rest of the world is on a continuum in this regard with China being at the opposite end of the spectrum. IOW, intellectual property laws and enforcement are a joke, at least relative to what we here in the US of A have grown accostomed to.

That raises the obvious question of how these companies that are outsourcing manufacturing to China and computer programming to India are going to protect their intellectual property. Of course, if they copy us and ship the products that incorporate these pirated technologies back into the US, I would assume that that would be actionable and cease and desist orders could be obtained. However, what about their technologies being used outside this country? I assume that the companies that have been outsourcing have thought this through, but I just don't know.
52 posted on 03/20/2004 10:17:23 AM PST by phil_will1
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To: CompProgrammer
BTW, if you're a free trader, tell me which position I can train for that will provide a good income for the years ahead.

Bankruptcy lawyer? Class action lawsuit lawyer? Hiring discrimination lawyer? Maybe provide database / programming expertise to them.

What amazes me is that people complain about the Rise of the Lawyers -- what do they think people are going to migrate to when they see that engineering is being sent overseas? Applications to comp sci at MIT is down 33%, and from what I've heard from my friends that are going back to law school applications are up about that much.
53 posted on 03/20/2004 10:28:50 AM PST by lelio
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To: lelio
"If anyone thinks this is a Bush cakewalk they're delusional."

I certainly agree with that. My overall take on the Presidential campaign at this early juncture is that Bush has some serious problems with his base because of
1. Lack of fiscal discipline
2. immigration reform
3. Medicare
4. Lack of attention to the need for Fundamental Tax Reform and the jobs that it would create

Interestingly enough, Susan Estridge is the only "talking head" I have heard who has alluded to this point. Karl Rove's strategy is pretty obvious - since Bush has no challenger fron his political right, his base has nowhere to go. Therefore, it makes sense to co-opt the Democrats on some of their issues and try to capture as many of the swing votes in the middle as possible. However, Rove may have underestimated the disenchantment in the base that his strategy would create.

The thing that may save Bush is that the Democrats have run such an emotional and irrational campaign and are on the verge of nominating someone who is sooooo liberal. We will hear many times between now and November that he is to the left of Ted Kennedy. The fact that he shifts with the political winds is another huge gift for Bush and his team.

Bush is certainly vulnerable, but I do not at this point see the Dems being politically astute enough to exploit the opportunity that he has given them.
54 posted on 03/20/2004 10:39:01 AM PST by phil_will1
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To: phil_will1
Bush is certainly vulnerable, but I do not at this point see the Dems being politically astute enough to exploit the opportunity that he has given them.

Kerry really wants to win--as witness his sizeable contributions to his own campaign. He will no longer be shackled with the demands of Massachusetts politics, and may be expected to move sharply to the right. If he puts McCain on the ticket, you can pretty well predict that they have made the obvious assessment that they can run a smarter campaign than the dysfunctional Karl Rove.

While few on the Republican side seem to want to grasp the fact, Karl Rove is not astute. Karl Rove depends upon yesterday's data, not analytic abilities. He suffers from a severe form of "Tunnel Vision" and has no real analytic abilities. (See Karl Rove--Dysron, Quack or Mole?.)

It is, of course, much too early to try to predict a campaign that will not even really start for serveral months. The present sparring around is more feel out than serious politics. But as of now, things look very bleak for the Republicans--not from anything the Democrats have to say, but from the likely consequences over the next six or seven months, of things which Rove has already done to us.

William Flax

55 posted on 03/20/2004 1:29:20 PM PST by Ohioan
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To: B4Ranch
You pinged me on this. So I guess you want me to comment.

I, of course, agree with the article on the obvious security threats, noted. But, frankly, the article gravely understates what is really happening to the prospects for an ongoing American future. Outsourcing is one small--but growing--part of a much bigger problem.

There is so much at my web site on that bigger problem, I hesitate to focus on any one aspect here. But the Left has deliberately undermined our sense of ongoing communities, both in the ethnic sense, the geographic sense, and in other historic senses, as well as in terms of immediate present interests. Much of this onslaught was carried out under the banner of "Civil Rights," some under that of "Immigration Reform." It has been given virtually sacrosanct status in American education today, and goes virtually unchallenged by fanatics who do not understand the actual effects of the syruppy pap they spout.

Basically, it comes down to the fact that everything is seen from the advantage of the moment; from immediate self-serving benefit, or the benefit of seeming to humor the demands of what appears to be accepted by everyone else. Anyone who still feels a sense of being a part of an ongoing community--with a few tolerated exceptions--is treated at the least as too parochial, benighted, old-fashioned, or prejudiced. If the person actually goes beyond his own sense of identity, and articulates the unique values of a community, he may be treated a lot more harshly.

To fail to understand the importance of concentric communities in the American experience, is to absolutely fail to understand America. In the sense we are all Americans, we carry with us quite separate identities of being Ohioans, Virginians, Nevadans, Carolinians, etc., which are also quite distinct and ongoing. Within those other, for each individual, concentric identifications, there are other smaller community identifications.

The best way to understand this is in the direct metaphor employed by Booker T. Washington, the great Negro educator, in his appeal to the White community to hire their long time neighbors in the Negro community, rather than immigrants flooding into the United States--though never in numbers quite like the present. It was true not only in White/Negro relations, but in North/South, State by State, even town by town, county by county, religious community relations, etc.. To paraphrase: In all things where our interests were unique to each group, we could be as separate as the fingers; but one as the hand, where the common American interest comes into play.

Outsourcing, open immigration from countries that do not share a common culture or ethnicity with the American mainstream, globalism (where it goes beyond the traditional American happiness to trade with the world, and becomes an end in itself), all tend to undermine the vital senses of community identification. Simply put, there ceases to be any standard for moral conduct, dependent upon social identification with a specific, concrete group. Not even one percent of any population are so philosophically oriented, that they can completely ignore the standards that come from community identification--as I am using the term here--and still act in a disciplined manner. Undermine community identification, and morals and ethics go out the window.

Do you want to test the hypothesis? Let me know, and I will illustrate my points further--though perhaps not till Monday. I do not want to spend the weekend at the key board.

Bill Flax Return Of The Gods Web Site

56 posted on 03/20/2004 2:00:29 PM PST by Ohioan
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To: A. Pole
I am sure Chinese and Indian governments can do security clearances if asked.

And I'm also certain they will be happy to supply us with all the smart bombs we will need, and the guidance systems to deliver them, if we ever get into a shooting war with someone they like.

They're our friends, after all.

57 posted on 03/20/2004 2:25:15 PM PST by Euro-American Scum (A poverty-stricken middle class must be a disarmed middle class)
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To: Liz
Don't miss the point. Democrats are making outsourcing into a political issue to lacerate Bush.

Yep. Sure can't miss sight of this. Got to close ranks around GWB or we're doomed.

Campaign Finance Reform. (Who needs the First Amendment?)

Pledge to renew the Assault Weapons Ban. (Come to think of it, who needs the Second, either?)

Open borders, amnesty for illegals. (Nothing is more important that cheap corporate labor.)

Offshoring of every job worth having. (Except maybe massive corporate profits at the expense of the very customer base who supports them.)

But it's O.K. for George Bush to advocate all this, because after all. . . he's a Republican.

58 posted on 03/20/2004 2:32:30 PM PST by Euro-American Scum (A poverty-stricken middle class must be a disarmed middle class)
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To: phil_will1
"The only thing that can stop John Kerry from winning the Democratic nomination now is an endorsement from Al Gore."

I'm not so sure. I don't see Kerry surviving the convention. IMO, one of two things will occur: either the delegates will revolt and draft someone else (possibly Hillary), or the Clinton machine will kick in and take Kerry out. When you consider that Kerry won his primaries with fewer than half of the registered Dem voters in most states, I think it indicates that there is not the widespread support for Kerry that the media would have you believe. I also think that even yellow dog Dems are groaning as Kerry says incredibly stupid things like "I voted FOR the $87 Billion supplemental package for Iraq BEFORE I voted AGAINST it". That sounds like something that came out of a bad sit-com; NOT something that the man who wants to claim the WH would say.

In addition, Gore has already endorsed Kerry. The Gore-ons just haven't gotten that message, yet.
59 posted on 03/20/2004 3:30:48 PM PST by DustyMoment (Repeal CFR NOW!!)
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To: CompProgrammer
I believe that we need to put a tariff on all imported goods and services, as has been advocated by Steven Pearlstein of the Washington Post.

America First, and anyone else, a distant 2nd...That's my position...I however, am not as optimistic as everyone else...Yes, I do believe George Bush will win the election...

The way I see it, the RNC gave the presidency to Clinton intentionally when they put Dole on the ticket...NAFTA had already been agreed to by the other Bush but they needed someone to get it thru the Democrat Congress...Dole couldn't have done that...Clinton had to win...

I believe the RNC and Republican Corporations pumped enough money into the younger Bush's campaign they never expected such a close race in 2000...George actually lost the popular vote...And I was shocked Gore could could even be a contender...

Kerry is such a loser as a person, I don't think he could stand a chance if he was running against Pat Paulson...George B should slide thru this one without a hitch...But, we know where that leaves us with Free(?) Trade...I believe the ship, SS America, is sinking and George keeps blowin' more holes in the bottom of the boat...But yes, Protecting American people, jobs and sovereignty is the only thing that will keep us afloat...

60 posted on 03/20/2004 3:40:54 PM PST by Iscool
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