Globalization Dynamics... Last week's Dispatch, Is Globalization Good for Office Space? (Jan 29), generated a flood of e-mails running the emotional gamut from acceptance to apoplexy. But everybody agrees that offshoring carries broad implications for a range of social and economic policies far beyond real estate.

Daniel Pink's current article in Wired magazine, The New Face of the Silicon Age (Feb 2004), paints a vivid picture of the offshore outsourcing dilemma. Just read the first three paragraphs about a highly-trained Indian programmer writing code for handheld devices. She makes $11,000 per year vs. $70,000 for a comparable engineer in the U.S. Yet she is paid 22 times the per capita annual income in India!

George Manthous at Property & Portfolio Research sent me a white paper on offshoring that concluded the impact would be "noticeable, but not dire." PPR predicts that the office vacancy rate will fall to 12.8% by the end of 2008. "Absent the effects of offshoring, the U.S. office market vacancy rate would fall under 11% by the end of 2008."

The outsourcing hullabaloo riles up real estate economist Hugh Kelly. He's seen it all before with the predicted demise of demand due to "hoteling" or "telecommuting" or "e-tailing." Instead, Kelly predicts net new demand for office space of 400 million square feet by 2015.

After all, "Look to the experience of New York, which saw the rest of the U.S. draw away major job segments, hundreds of corporate HQs, tremendous technology impacts, competition from low-cost, low-tax venues in faster-growing regions. The result? In 1960, there were 250 million square feet of occupied office space in Manhattan. Now, there are 375 million square feet of occupied office space... That's the model for the U.S."

Free Lunch... Would your colleagues like to receive the PikeNet Dispatch? Send me their names, and I'll add them to the list. Thanks!

--Peter Pike