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How Should ACS Treat Global Outsourcing?

June 7, 2004 | A version of this story appeared in Volume 82, Issue 23


The news has been replete with articles about the jobless recovery and the accelerating trend of global outsourcing (or offshoring). "Tapping Foreign Brains for Profit" (C&EN, Dec. 1, 2003, page 15) projects a rapid growth in global contract chemistry services overseas. The 2003 Starting Salary Survey (C&EN, April 19, page 51) confirms a soft job market with a drop in median salaries and unemployment numbers holding steady for chemists. In an excellent comment on "Global Issues in Employment" (C&EN, Jan. 26, page 51), Dennis Chamot, ACS director-at-large, observed that "we are now seeing the automation of many white-collar jobs and the shifting of jobs to other countries, with no obvious 'next sector' in sight" to create new jobs. Gone are the days of job security for R&D chemists and other white-collar workers with college educations and advanced degrees.

What can be done about offshoring? People have different viewpoints on what the U.S. should do. Some proposed actions include erection of trade barriers, incentives for companies to keep jobs at home, prudent management of the supply and demand of specific jobs, elimination of visa abuse, encouragement of industrial innovation and entrepreneurship, and financial assistance to displaced workers. The issues are hotly debated. However, it seems certain that offshoring is on the rise as companies adapt to maintain a competitive edge and survive in this global world of the 21st century.

The global outsourcing phenomenon will undoubtedly change the chemical industry and its operations. ACS needs to be in step.

Perhaps more pertinent to us chemists is the question, "What can and should ACS do?" This is a question that the Committee on Economic & Professional Affairs (CEPA) hopes to address by stimulating a constructive discussion with diverse views as a starting point. To obtain different perspectives on the complex issues related to global outsourcing, CEPA organized a lively brainstorming discussion, "How To Address Global Outsourcing Issues on Employment for Chemists," on March 27 at the ACS national meeting in Anaheim, Calif. Six excellent speakers representing different segments of ACS governance and membership presented their perspectives. The CEPA subcommittees (described on the CEPA website at then formed smaller discussion groups to come up with at least one action item each to address global outsourcing issues. Stay tuned to hear more about these.

Also in Anaheim, the Committee on Science, the Division of Business Development & Management (BMGT), and CEPA cosponsored a well-attended lunch-box forum, "Globalization of R&D in the Chemical Industry." Both events stimulated excellent discussions and active participation from the attendees.

Much can be gleaned from these presentations and discussions regarding global outsourcing issues. However, I have space to highlight only a few thoughts here. Chamot projected that this phenomenon of jobs moving overseas in R&D, engineering, and marketing could become "a political tsunami that is going to hit in five to 10 years. Where are the kids of the middle class going to work? This is not a skills shortage. It's a job shortage. There is not a lot that ACS can do directly to create jobs. We need to think about realistic policies that can be supported by the chemical industry but also have an impact on slowing job loss and creating jobs."

Outsourcing/offshoring is considered a tool to help maintain a competitive advantage for industry. Kathleen M. Schulz of BMGT said that Ph.D. chemist salaries in India and China are 20 to 30% of U.S. salaries. By offshoring, 20% of chemical companies realize greater than 30% cost savings. From the employers' point of view, Ron Webb of Corporation Associates also expressed concern that fewer U.S. students are pursuing science and math degrees. Thomas J. Lenk, chair-elect of BMGT, provided us ample food for thought when he reminded us that the world is not static and that today's contractor may become tomorrow's competitor.

Brian J. Dougherty, director of the ACS Office of Legislative & Government Affairs, described basically four camps of thought on the part of state and federal policymakers, ranging from a "Band-Aid approach" to "protectionist policies" to approaches in "education and job training" and "long-term investments in innovation." Where one stands on these issues depends on where one sits--politically and economically.

However, ACS President-Elect William F. Carroll Jr. aptly pointed out that "with any change, there is opportunity. ... It is not about blame. It is about coping. It's about what you do to deal with the situation." This is the challenge facing ACS, and CEPA intends to work with others to help ACS derive some possible solutions and assist in formulating a strategic plan to address the issues raised by globalization.

A CEPA Task Force on Globalization Issues chaired by H. N. Cheng was recently formed. Its purpose is twofold: First, it will follow up on the CEPA brainstorming session in Anaheim; and second, it will coordinate, communicate, and cooperate with all interested parties with respect to globalization issues and suggest or carry out appropriate activities as needed.

It was generally agreed that globalization and offshoring present tremendously complex issues for the 21st century. In the long term, the global outsourcing phenomenon will undoubtedly change the chemical industry and its operations. ACS needs to be in step with the changes. ACS chemists, like the rest of the world, will need to adapt. We do not yet have answers, but CEPA is determined to do all it possibly can to help our members weather these tough times. If you have any suggestions, please e-mail me at

Views expressed on this page are those of the author and not necessarily those of the committee.


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