heshareofcapitalplusconsumergoodstogetherhasincreasedfrom15%ofexportsin1925tomorethan50%in2005.Alongwithautomobiles,capitalandconsumergoodsaremostlikelytohaveaportionoftheirproductionprocesssentoverseasthroughoutsourcing.AModelofOutsourcingTodevelopthemodelofoutsourcing,weneedtodistinguishalltheactivitiesusedtoproduceandmarketagoodorservice.Figure7.2(a)describestheactivitiesintheorderinwhichtheyareperformed.However,foroutsourcing,ordingtotheratioofskilledtounskilledlabortheyusewhichisshowninfigure7.2(b).ponentsandthenontothemoreskilledlaboractivities.AModelofOutsourcingFigure7.2Panel(a)ur.Thevaluechainin(b)liststhesesameactivitiesinorderoftheamountofskilled/unskilledlaborusedineach.Inpanel(b),theassemblyactivity,ontheleft,usesthemostunskilledlabor,andR&D,ontheright,usesthemostskilledlabor.
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