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Labor Day 2003: Is R&D latest target of Silicon Valley outsourcing?

Thursday, Aug. 28, 2003

SANTA CLARA, Calif. – Aug. 28, 2003 – Research and development may be the latest business function that Silicon Valley businesses are outsourcing rather than handling in-house, according to the latest Santa Clara University Business Index released today.

Nearly half the companies surveyed by the monthly index also said they are beginning to turn to outside contractors for an array of business support services as well.

The results of the survey conducted by SCU’s Leavey School of Business were released at a time when the unemployment rate in Santa Clara County, 8.4 percent, was the largest of any major urban area in the state.

“Firms appear to be experimenting with outsourcing research and development,” said SCU finance professor Robert Henderschott, “Should this trend develop, it would have far-reaching, but not necessarily negative, implications for the future of Silicon Valley.”

In addition to a question about how much their companies outsource business services, the SCU index continued to track business optimism in Silicon Valley, and revealed another month of continued optimism about the economy, matching other local and national business and consumer surveys.

Respondents told the SCU researchers last week that current business conditions for companies and their customers, and current job prospects in their companies are continuing for the second straight month to improve to levels of 12 months ago.

Complete SCU Business Index results and methodology for August and earlier months can be found at  http://www.surveycompany.com/SCUBI/SVOutlook.html.

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About the Santa Clara UniversityBusiness Index

This monthly business indicator, the only one of its kind for the Silicon Valley region, is a composite index that every month tracks business conditions in Silicon Valley companies and their markets, as well as trends in job availability in the region, by polling the region’s executives and managers. The SCU Business Index since February 2002 has asked managers and executives in a wide range of businesses in Silicon Valley to assess their business prospects and the current and future availability of jobs in their companies. It is managed for the Leavey School of Business by The Survey Company. The Santa Clara University Business Index survey polls several hundred MBA alumni, undergraduate business alumni, and several dozen members of its business advisory board who are employed in managerial and executive positions in Silicon Valley companies.

About The Leavey Schoolof Business
The Leavey School of Business at Santa Clara University began in 1926, and was one of the first business schools in the country to receive national accreditation. It undergraduate business program has been recognized as one of the best in California, and it MBA program has been ranked in the nation’s top 20 part-time programs. More than 80 percent of its 1,043 MBA students are working professionals in Silicon Valley. For more information, see http://business.scu.edu.

About Santa Clara University

Santa Clara University, a comprehensive Jesuit, Catholic university located in California's Silicon Valley, offers its 8,060 students rigorous undergraduate curricula in arts and sciences, business, and engineering, plus master's and law degrees. Distinguished nationally by the third-highest graduation rate among all U.S. master's universities, California's oldest higher-education institution demonstrates faith-inspired values of ethics and social justice. More information is on line at www.scu.edu.


 

 

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