Offshoring medical care, education and more …

Speaking of offshoring (see previous postings), think that two of those safe localized, non-tradable occupations are in health care and education? Think again.
We have heard of medical tourism before, but the Economist thinks rising health care costs in the US be a boon to the developing world — Medical tourism: Sun, sand and scalpels:

All this presents a fantastic business opportunity for those Asian countries, principally Thailand, Singapore and India, which have excellent private hospitals that are used to treating foreigners and where costs are a fraction of those in rich countries. “Medical tourism” is booming as patients look abroad for cheap, fast treatment, often combined with a holiday afterwards.
. . .
To reassure foreign patients, many hospitals are seeking accreditation from the Joint Commission International (JCI), the international arm of the body that accredits American hospitals. Thailand’s Bumrungrad and nine Singaporean hospitals already have JCI certificates. Raymond Chong, the boss of Bangkok Dusit’s Samitivej Hospital, reckons it will be only a year or two before big American insurers and employers routinely offer patients lower premiums if they are prepared to travel to a foreign JCI-accredited hospital for surgery.

We’ve also heard about online tutoring for some time. But the technology is getting much better. Take, for example, TutorNet (Lending a mother’s touch to online tutoring around the world):

TutorNext uses an electronic classroom. A tutor overseas has a “white board,” where he or she writes down instructions for a student, as if using a chalkboard. Both teacher and student use headsets to communicate when going over problems.

The same technology could easily be used at the college level. And a number of universities are already putting course materials online.
Global wage competition hits professors and surgeons. What’s next?
Well, how about this (from the New York Times – India’s Edge Goes Beyond Outsourcing:

increasingly the jobs of Western white-collar elites in fields as diverse as investment banking, aircraft engineering and pharmaceutical research have begun flowing to India and a few other developing countries.


New drug research models

The blog Intellectual Property Watch has a good summary of a recent EU workshop on drug research – EU Hears Views On Policies For Addressing Neglected Diseases:

Among the speakers at the workshop were representatives of the pharmaceutical industry, WHO, nongovernmental organisations, and public-private partnerships (PPPs). A number of sources welcomed the opportunity to hear the concerns of the players and the issues at stake, although some were criticised for not tying their talks enough to the IGWG discussions. Most of the member states left the discussion to the speakers.
The debate centred on pros and cons for PPPs and alternatives such as a prize fund that could finance research and development instead of patents, as well as to what extent intellectual property should be part of the discussion.

I’m glad that alternative ideas are being looked at, but the summary sounded like the parties are still talking past each other. Frankly, I would like to see more action on these ideas rather than more debate. There are good signs about the expanding number of research prizes. But much more needs to be done.

From the IP wars – who owns the student’s papers

Who owns copyright to your student papers? That is the question in a recent lawsuit, according to this story in the Washington Post – McLean Students Sue Anti-Cheating Service

The lawsuit, filed this week in U.S. District Court in Alexandria, seeks $900,000 in damages from the for-profit service known as Turnitin. The service seeks to root out cheaters by comparing student term papers and essays against a database of more than 22 million student papers as well as online sources and electronic archives of journals. In the process, the student papers are added to the database.
. . .
“All of these kids are essentially straight-A students, and they have no interest in plagiarizing,” said Robert A. Vanderhye, a McLean attorney representing the students pro bono. “The problem with [Turnitin] is the archiving of the documents. They are violating a right these students have to be in control of their own property.”
. . .
Andrew Beckerman-Rodau, co-director of the intellectual property law program at Suffolk University Law School, said that although the law regarding fair use is subject to interpretation, he thinks the students have a good case.
“Typically, if you quote something for education purposes, scholarship or news reports, that’s considered fair use,” Beckerman-Rodau said. “But it seems like Turnitin is a commercial use. They turn around and sell this service, and it’s expensive. And the service only works because they get these papers.”

While the story doesn’t explicitly mention this, I would think that there is a third party here — the school. Once the student turns in the paper, does copyright flow to the school or stay with the student? This there an implicit contract here? An interesting case in many respects.

Needed — a new trade policy – part 4

Yesterday, the Commerce Department ordered countervailing duties on certain paper from China. The reaction (see U.S. Puts Tariffs on Chinese Paper) reveals one of the major tensions in our current trade policy:

In Washington, some analysts suggested the tariff case reflects domestic politics, not the pursuit of genuine national interest. Grant Aldonas, a former Bush administration undersecretary of commerce for international trade, said U.S. companies doing business in China are chiefly interested in greater protection of copyrights and patents, combating rampant counterfeiting, and eliminating barriers to selling products.
“This is for consumption on Capitol Hill,” Aldonas said. “I’m afraid the administration is being responsive to the wrong group.”

Grant [whom I know and like] makes an important point about our trade policy with China: it is geared toward helping those who want to do business in China. It is not geared towards those who are on receiving end of Chinese imports — the “wrong group” as he calls them. Thus, the traditional tension: domestic producers versus exporters.
My worry about this formulation is two fold. First, it is not an either-or (domestic or exporter). It is certainly clear that other countries have a dual policy of promoting exports while restraining imports. And if you are interested in unbiased rules (rather than national promotion), having consistent trading rules fairly applied should benefit both.
My second worry is about the nature of globalized economic production. We often fail to make the distinction between policies that promote exports and policies that promote overseas investment. Many of the policies initiatives with China are aimed at helping US companies locate their economic activities in China — not about helping US goods and services (produced in the US) enter China. At one point in our history, it could be argued that the former (investment) was inextricably linked to the latter (exports). People still make that argument. Given the new unbundled production (see earlier posting), I’m not sure.
That is one of the reasons why I think we need to step back and re-think our trade policy along these lines: what should we be doing to insure fair importation (i.e. without government provided, market-distorting subsidies); what should we be doing to promote exports; what type of investment promotion is in our national interest; and how do the three tie together. After such an examination, we may end up in the same place as today. But I don’t think so.

Needed — a new trade policy – part 3

Dani Rodrik has his own version of the Grand Bargain (from – The cheerleaders’ threat to global trade):

It is time, then, to consider a new bargain. When rich and poor nations come together to negotiate the rules of the game they should stop thinking in terms of exchanging market access: “I will open my markets in x if you open yours in y.” They should consider instead exchanging policy space: “I will allow you to protect your national social compact if you allow me to engage in development strategies that conflict with WTO and International Monetary Fund rules of good behaviour.” The challenge is to design procedures that enable the use of policy space for socially desirable purposes while limiting it for beggar-thy-neighbour purposes.

I agree that trade negotiations have long since gone beyond a process of lowering this tariff in exchange for lowering that tariff (except maybe in agriculture). But I’ve not sure that negotiating loop-holes in the agreements is the right way to go. Here is what I said about trade negotiations back in 2001: After Doha: What the WTO is not Talking About

The World Trade Organization (WTO) will shortly convene its 4th Ministerial Conference in Doha, Qatar. The goal is to launch a new round of multilateral trade negotiations. It remains to be seen whether the Doha meeting succeeds. The betting is that the participants cannot afford a failure such as happened in Seattle two years ago.
Slightly less than a decade ago, I played a small part in the implementation of the Uruguay Round and the birth of the WTO. As a Senate trade policy staffer, I had fly-on-the-wall view of the pushing and shoving. At the time, I could not help but think that I was witnessing the last major trade round. I may be proven wrong. But, regardless of whether a new round is launched and successfully completed, it will be outdated before it begins. As we engage in the first war of the 21st century, we may be entering into the last trade negotiations of the 20th Century.
This is not to say that the negotiations are unimportant. There are numerous areas, ranging from agricultural subsidies to the dispute settlement process, that need to be addressed. These are, however, the loose ends of trade in the Industrial Age – not the emerging issues of the Information Era.
Trade negotiations have long since gone beyond tariffs and quotas. They have even gone beyond issues of trade-distorting practices such as subsides and non-tariff barriers. As trade and international commerce have expanding and evolved, negotiations are more and more focused on issues of harmonization of commercial rules and regulations. The WTO system is now in the position of resolving disputes between internal regulatory systems. Thus, we have seen the rise of a number of issues such as investment, competition policy, labor standards and environmental protection. All of these issues are on the table, more or less, at Doha.
Not on the table is a comprehensive look at policies toward information and other intangibles. We are moving to a knowledge economy. Knowledge is both an increasingly important input into the production process and an end-use commodity in and of itself. As the role of information increases in both our economic and social systems, issues of control of information will become increasingly central to our policy and political debates. Parts of the issue are included in the WTO agenda, such as: Trade-Related Aspects of Intellectual Property Rights (TRIPS); the work program on electronic commerce; trade and investment; and the proposal for a new discussion on technology transfer. Missing from the discussions is the recognition of the interconnection between these areas.
Government policy and activities with respect to knowledge and information covers a number of areas: intellectual property rights (IPR); privacy policies; regulation of content and freedom of speech; data protection and security; access to government information and freedom of information; “right-to-know” policies. The intellectual foundations for these policies come from a number of different traditions, which often conflict with one another. Cutting across all of these various information management regimes is the fundamental tension between proprietary rights and public rights – that is, between the aspects of knowledge, information and data as a private commodity and that of knowledge, information and data as a public good.
This tension is often most viable in the area of intellectual property rights where the competing needs of scientific and technological research for sufficient proprietary rights to create incentives for action and the need for information exchange as the building blocks for that action. For centuries, patent laws and the practices and customs of scientific inquiry have sought to strike a balance between these two competing goals.
The tension manifests itself in all area of information management. For example, who owns the data about my DNA? What information is my personal property that I may sell, disclose or withhold according to my choice? Likewise, what is the larger community’s rights? What information is of such importance to the community as a whole that its disclosure should be mandated (e.g. details of toxic waste sites), should be allowed to be sold (e.g. micro-weather data), or should be withheld/censored (e.g. child pornography)? The issue centers on what information is and should be private, what information is and should be proprietary and what information is and should be public.
In the U.S., we are beginning a discussion of these broader issues under the rubric of an “information commons.” Yet, these are issues that by their very nature are global. The WTO may or may not be the best venue for discussion. However, the decisions that get made during the next round on issues such as TRIPS and electronic commerce will affect the entire information commons approach. We should at least be cognizant of that outcome, as it will have a major impact on shaping the environment in which business will operate in the future.