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Source of the Problem

MIT students demand a new course on the hot subject of outsourcing jobs -- and the school delivers.

SATURDAY, 10 A.M.   Former US labor secretary and one-time Massachusetts gubernatorial candidate Robert Reich is facing some 50 MIT Sloan School of Management students seated in swivel chairs. Who, he wants to know, has patronized Wal-Mart? Ordered books from Traveled on a cut-rate airline?

Hands shoot up.

"How many of you are grief-stricken?" prods Reich, casually dressed in worn brown cords, brown sweater, and sensible soft-soled shoes.

The hands hide. He has them.

"We have a split brain about this," says Reich. "We want the best deal, but then the other part of us says, 'What about the social justice costs of pursuing the best deals?'"

Reich is one of four guest speakers this day for the Sloan School's hot new course on outsourcing. Taught by former dean and management guru Lester Thurow and professor Amar Gupta, the course was created in response to student demand. It aims, says Thurow, "to make students more knowledgeable about a big contentious issue they will have to deal with as managers." Outsourcing as an academic subject is so new that there are few available readings, which has Thurow and Gupta instead structuring the biweekly three-hour class as a series of guest lectures, including hearing from entrepreneurs engaged in outsourcing.

Another guest speaker this day, Raj Malhotra, is CEO and president of Spryance, a Maynard company that takes dictations required of doctors after every patient visit and transcribes them into written records. Malhotra says a shortage of transcriptionists here and an abundance of well-educated men and women abroad -- including doctors and pharmacists -- who want home-based work makes outsourcing ideal.

"Home in Bombay is no different than home in Boston," Malhotra announces to the class during his slide presentation.

But when Americans fret about jobs, geographical distinctions do matter, which is why outsourcing is a highly charged election issue. Even so, Gupta and Thurow avoid politics, insisting that the class be a forum for academic exploration. "We are not here to advocate any opinions, pro or anti," Gupta says.

The approach resonates with Mira Sahney, 29, of Seattle, taking the class precisely to bypass emotions and understand a critical subject. Outsourcing, she says, "is obviously going to affect my own personal life. Business is just global."

Classmate Rajeev Dubey, 32, of Lucknow, India, says the course has made him view outsourcing as a means for companies to operate efficiently in a global economy. "If you find a better price in Wal-Mart than Kmart, you go there," says Dubey. "It's based on value. If you find more value doing it offshore, you do it."

Reich's shopping questions feed into the outsourcing debate: Americans want stuff cheap even while fretting about sending jobs overseas. But Reich insists that public worries are a gut response to a slow economic recovery. Jobs, he says, are not finite, and outsourcing can be used to bring high-wage jobs here. But, he insists, it's critical to help workers adapt skills and change jobs, providing training and such tools as transferable health care benefits. We feel vulnerable, he says, because we lack flexibility.

"I sympathize with many of the fears people have about outsourcing, but it's an overexaggeration," says Reich. "A year from now we will not hear about outsourcing. This is business-cycle related."

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