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$16, as hopes mount that the company will benefit from a surge in PC purchases tied to Windows 7.

But Michael Dell is clearly looking for more than incremental improvements. He wants his namesake company to be the kind of force it was in the past, when it drove IBM out of the PC business and humbled industry giants like HP. "He's thinking, 'I'm going to make this company what it should be again," says Alex Mandl, a longtime Dell board member.

Rivals contend that Dell has waited too long to take the initiative. In an industry undergoing rapid consolidation, companies that haven't already positioned themselves to withstand the cyclical nature of technology will have a hard time thriving over the long term. That means Dell itself may be forced to merge with another company or become takeover bait. "Being a fast follower doesn't work in an industry that is moving faster every day," says Shane Robison, chief technology officer at HP.

Dell is more reflective than usual these days. During the interview in his conference room, he acknowledges he stuck with the one innovative idea of selling computers directly for too long. "Mea culpa," he says. But he says talk that he and his company aren't moving fast enough now is nonsense. "We're going to be stronger, faster, and more hyper than we've ever been," he says. "If you don't believe, then just sit back and watch."

Ex. 5.

A.Look through the article and pick up the words describing the management strategy and overhaul of the company. Translate the words into Russian.

B.Enumerate all the steps of Michael Dell to change the company. Translate into Russian.

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Ex. 6. Translate into Russian.

1.IPOs last week had their biggest haul of the year, with more than $10 billion raised, accounting for more than half of 2009’s $18 billion total.

2.Because companies that go public in hard economic times tend to be relatively strong, the 2009 field has a good chance of doing well long term.

3.Still, the market isn’t hospitable to all IPOs this year, which serves as a warning to weaker wannabes: 14 of 36 completed offerings are trading at less than the offering price.

4.When Phenomix Corp. finally withdrew its IPO registration in October – after waiting nine months for the markets to improve – it had to figure out how to navigate the tough economy without the roughly $87 million it had hoped to raise. Phenomix is one of many firms that have been forced to find alternative financing solutions as the IPO market has gone from bad to worse.

5.With the financial markets traumatized and the IPO drought to continue, many of these companies are now courting private capital, but that too has become difficult as valuations have fallen and investors have become ever more selective.

6.Crossover funds from Fidelity, SAC Capital, and others that invested in mature start-ups when cash was plentiful have scaled back. That leaves late-stage venture-capital and private-equity firms as the most likely sources of funding for companies whose dream of going public remains deferred.

India's Outsourcers Should Worry about Delta's Move

Even when times were good and the U.S. economy was humming along at full employment, American companies got some flack for outsourcing jobs to India. Now, with the unemployment rate rocketing toward 10%, the heat is getting to be too much for some U.S. executives. On Saturday came news that Delta is the latest company pulling back from India. As Bloomberg reported the airline has given up on using operators in Indian call centers to handle inquiries about reservations; customers weren’t happy with the service they got from the operators based in India.

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Unfortunately for the Indian outsourcing industry, Delta is just the latest company to have second thoughts about outsourcing jobs to India during the worst U.S. recession in generations. United Airlines has soured on India outsourcing, too, as has Sallie Mae. The student loan company is shifting jobs from India back to the U.S. As this story from India’s Economic Times (which shares content with BusinessWeek online) earlier this month points out, “Some American outsourcing firms are trying to woo back customers already offshoring to low-cost destinations such as India. Smaller U.S. firms such as Rural America Onshore Sourcing and Xpanxion are attempting to build a sustainable rural outsourcing model in the U.S. at a time when offshore locations such as India are facing a backlash and unemployment rates have touched an all-time high.”

Obligatory note of caution: A few high-profile examples don’t necessarily make a trend. Still, at a time when the big Indian IT companies like Infosys, Wipro and TCS are already struggling as never before as big customers shrink or go belly up, any movement against outsourcing is the last thing Indian executives need. It’s ironic that the backlash against Indian call centers comes even as Americans have embraced a film celebrating the triumph of an Indian call-center worker. The hero of Slumdog Millionaire, which swept the Oscars in February, works in a call center. Unfortunately for some of his real-life colleagues, though, these days Americans prefer their Indian call center workers to be fictional.

Why Rising Productivity Is Cause for Worry

The numbers may indicate that companies are shedding professionals—and that can undercut growth in the long term

Here's a little puzzle for you. We're in the middle of the worst financial crisis since the Great Depression. Yet a key economic statistic —productivity, defined as output per worker hour—seems to be sailing along without a worry. According to the latest government data, nonfarm business productivity rose by a decent 1.8% over the past year. Looking over the past two years, since early 2007, output per hour grew at a strong 2.6% annual pace, far faster than the 25-year average gain of 2%.

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History tells us that strong productivity numbers like these should bring a happy-face economic boom. When businesses are able to produce more with fewer workers, profits and wages generally go up, living standards rise, and inflation stays low. In fact, during the New Economy boom years of the late 1990s productivity growth averaged about 2.5% to 3% a year, and we were ecstatic. As Nobel Prize winner Paul Krugman once said: "Productivity isn't everything, but in the long run it is almost everything."

But history also tells us something else: Massive economic disruptions are typically accompanied by weak or negative productivity growth, because businesses have trouble raising money and operating efficiently. Output per hour stagnated in the two deepest postwar recessions, 1974-75 and 1981-82. During the worst of the Great Depression, 1929 to 1933, productivity plunged.

So why, today, are we blessed with the unlikely combination of deep recession and rising productivity? The optimistic explanation is that American businesses have gotten religion and are aggressively squeezing out waste and boosting efficiency. If that's true—and to some degree it surely is—then businesses can survive the recession and even increase profits without raising prices. And that, in turn, helps Fed Chairman Ben Bernanke keep interest rates at near-zero without worrying unduly about inflation.

But there may be another, less benign, reason for rising productivity. In past downturns, educated professionals have escaped mainly unscathed. This time businesses are relentlessly hacking at their professional workforce—a tactic that boosts short-term productivity while hurting long-term growth. Rising productivity may be a sign of weakness, not strength.

White-Collar Woes

Over the past year the number of employed professionals has fallen by 0.7%, a rare decline. Outside of the still-growing education and health-care occupations, the number of employed professionals has dropped by a dramatic 3.6%.

The slide started in earnest after the Lehman debacle. Since August 2008, employment in engineering and architecture occupations is down 10.3%, computer and mathematical occupations are down 9.3%, and natural and social science occupations are down 2.3%. And the broad class of "creative" professionals, including designers, artists, and performers, is down 11.5% Together these four occupational groups have lost 1 million jobs since August.

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In the short term, when a company cuts professionals, output per hour goes up. A pharmaceutical company could, in theory, ax its entire research operation without affecting current sales. And an automaker that laid off its new car designers could still churn out the same number of vehicles, and productivity would rise.

The danger: If the economy is stuck in a slow-growth recovery, companies may not be quick to rehire their professionals—and that would be a disaster. Professionals are the people who do the research, the new-product development, the information-gathering, the training, and even the marketing which moves the economy forward. They are the main source of the "intangible investments" necessary for innovation and future growth. In effect, we could be eating our seed corn to get through the financial crisis—and the official stats would not warn us.

With these sorts of job cuts, it isn't surprising that R&D spending at many companies is down compared with a year earlier. For example, in their latest quarterly reports, Cisco reported a 16% decline in R&D, Johnson & Johnson is down 11%, and 3M is down 8%.

A postscript: The Bureau of Economic Analysis (BEA) is already in the slow process of revamping the gross domestic product statistics to incorporate business spending on R&D as an investment, just like spending on computers. That would fix part of the strong productivity puzzle, since reduced corporate spending on R&D would be reflected in slower growth in GDP and productivity, more accurately tracking the true state of the economy.

Because of budget cuts in 2008, the preliminary figures published by the BEA go only through 2004—no help today. The new budget just put out by the Obama Administration boosts the BEA's budget and specifically directs the agency to "produce new and expanded GDPrelated statistics that uniquely measure the role of innovation." That would fund better statistics on R&D and other intangible investments. But given the mammoth federal deficits, it still is not clear whether this request for extra funds will survive the coming congressional debates.

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Outsourcing: Thriving at Home and Abroad

Cities from Boise to Gdansk benefit as economic and political pressures prompt companies to outsource work to lower-cost cities at home and overseas

In spite of the troubled global economy—or more likely, because of it—one of the few business sectors that continues to thrive is outsourcing. No wonder: Companies looking to cut expenses in the face of soft demand are keener than ever to hand off parts of their operations to lower-cost providers. As a result, outfits providing everything from third-party customer support and information technology services to back-office processing saw revenues grow last year by an average of 13% and expanded their workforces by 18%, according to the International Association of Outsourcing Professionals.

Of course, that's no comfort to the millions of people in developed countries who are out of work. But it does mean that major outsourcing providers, from IBM and Capgemini to Indian giants like Wipro and Infosys, are surviving the recession better than many companies.

The economic situation also is reshaping outsourcing itself. Widespread layoffs in the West—especially in the U.S.—have flooded the labor market with highly skilled workers who are eager for jobs and often willing to accept lower pay. That's prompting global outsourcing providers to beef up their presence in the U.S., where they can scoop up local talent and offer services for far less than they could have two years ago.

Politically explosive

Also driving U.S. growth in outsourcing services: Rising costs in traditional Indian destinations such as Bangalore and Mumbai make second-tier U.S. cities like Indianapolis and Boise, Idaho, relatively more price-competitive than in the past. "Many countries and cities are trying to get on the Indian [outsourcing] bandwagon," says Graham P a s c o e , a n a d v i s o r y p a r t n e r a t c o n s u l t a n t s PricewaterhouseCoopers(PWC) in London.

The net effect, Pascoe says, will be broader choices among outsourcing locales and a move to more—and smaller—contracts. In the past 12 months, he notes, outsourcing deals already have fallen on average by 5% to 10% in value. "The credit crunch will accelerate outsourcing, but the economics of deals will be structured in a different way," Pascoe concludes.

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There's another factor, too, that's altering decision-making about outsourcing. Sending work overseas already was controversial when times were good; now, in the face of widespread unemployment, it has the potential to be explosive. "Offshoring can be an emotive and fractious topic," says Shashank Tripathi, director of the outsourcing advisory service at consultancy Deloitte in London. "Locally focused companies without past [outsourcing] knowledge don't want to experiment when the economy isn't at its best."

Tata in Indianapolis

As a result, Tripathi says, companies lacking experience with outsourcing will likely steer clear of it for now, even if that means swallowing higher costs in the short term. And even firms with established offshore operations are taking a more nuanced approach. That often includes relocating customer-focused operations back home, while maintaining back-office services in cheaper countries.

Which locales may benefit from the latest trends in outsourcing? Consultants KPMG say some of the winners could be in unexpected places. One city getting a lot of attention is Boise. The longtime home of Hewlett-Packard's printer division boasts a tech-savvy workforce and burgeoning startup scene, yet the cost of living in the Idaho capital is far lower than in other western cities such as San Francisco or Denver. That has already prompted both HP and Microsoft to set up IT service centers there.

Another U.S. contender in outsourcing is Indianapolis. The Indiana capital is home to a thriving life sciences industry, as well as a growing tech sector that even has led Indian giant Tata Consultancy Services to set up shop there. "Indianapolis is a hub of entrepreneurial activity," says a recent KPMG report.

Farther afield, cities in countries from Argentina to Australia are vying to entice outsourcing business through a variety of tax breaks, infrastructure upgrades, and government subsidies. In the Americas, that raises the prospects for places such as Chilean capital Santiago and Brazil's Campinas, which combine well-trained, multilingual graduate pools with closer proximity to the U.S.

Central and Eastern Europe Benefit

A similar story has played out in Central and Eastern Europe. Looking for cheaper places to house their European IT and manufacturing support operations, companies such as Sony and German airline Lufthansa have moved operations to cities such as Poland's Gdansk and the Bulgarian capital, Sofia. PWC's Pascoe says the decision

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makes business sense. "The region's second-tier cities offer an abundantly skilled workforce at a significantly lower cost [than Western Europe]," he says.

Outsourcing boosts the bottom line for most clients, but in the current economic climate, the practice is undergoing dramatic shifts. Aside from the rise of alternative locales on every continent, today's political culture requires companies to be more careful than ever about where they site their work—especially if they're receiving financial aid from national governments. These changes likely will mean more work is outsourced locally and less offshore. But one way or another, concludes Deloitte's Tripathi, "In the long run, outsourcing is here to stay."

Ex. 7. Translate the following into Russian.

Labor unit costs, productivity gain, to hire, to fire, to lay off, part-time job, outsourcing, to cut payrolls, white collar jobs, temporary workers, compensation, benefits, disposable income, to cash stock options.

Stock Decline Hits Depression Levels

Money invested 10 years ago in stocks have lost half their real value, matching the worst ten years of the Great Depression

During the darkest 10 years of the Great Depression, from September 1929 to September 1939, the stock market dropped roughly 50%, adjusted for inflation. With today's drop in the stock market, the U.S. has now matched that unfortunate milestone. The Standard & Poor’s 500-stock index, adjusted for inflation, is now down about 50% over the past 10 years from Feb. 17, 1999 to Feb. 17, 2009.

Other assets have done much better over the same period. For example, a nice safe investment in six-month certificates of deposit would have yielded a real total return of roughly 12% over the past 10 years. And despite the recent real estate bust, residential home values in the largest cities, adjusted for inflation, actually increased by about 30% over the past decade.

The Depression-level decline in the market has come during a stretch when many small investors, on the advice of financial advisers and the financial media, put much of their savings into equities. The

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enormously influential book Stocks for the Long Run by Jeremy J. Siegel, which was published in 1994, convinced people that they should ignore the short-term ups and downs of the market.

Should You Stay in Stocks?

But the mantra of "stocks for the long run" has reached its moment of truth. It's no longer possible to pretend that equities are a safe asset. Investors, looking at their depleted 401(k) and brokerage accounts, are being forced to ask the question: Do they have the stomach to stay in stocks, or are they ready to bail out?

Both approaches have their pluses and minuses. If you stay in stocks, you are accepting the possibility that the economy will plunge into a deep depression, and that your investments may never reach their original value again, much less show a profit. If you go into a safer asset, such as certificates of deposit, you are giving up any potential of an upside, especially if it turns out that the market has a big rebound.

Ultimately, you are placing a bet on the future of the U.S. and the global economy. Are we entering into a period of long-term stagnation or are there better days ahead? Two hundred years of history says that we are going to see more growth, but as the saying goes, past returns are no guarantee of future performance.

401(k) - In the United States of America, a 401(k) retirement savings plan allows a worker to save for retirement and have the savings invested while deferring current income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wages paid directly, or "deferred," into his or her 401(k) account. This deferment is also known as a "contribution."

The Message of Dollar Disdain

Unprecedented spending, unending fiscal deficits, unconscionable accumulations of government debt: These are the trends shaping America’s financial future. And since loose monetary policy and a weak U.S. dollar are part of the mix, apparently, it’s no wonder people around

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the world are searching for an alternative form of money in which to calculate and preserve their own wealth.

It may be too soon to dismiss the dollar as an utterly debauched currency. It remains the most used for international transactions and constitutes over 60% of other countries’ official foreign-exchange reserves. But the dollar’s reputation is being severely compromised.

Funny how words normally used to address issues of morality come to the fore when judging the dollar. Perhaps it’s because the U.S. has long represented the virtues of democratic capitalism. To be “sound as a dollar” is to be deemed trustworthy, dependable, and in good working condition.

It used to mean all that, anyway. But as the dollar is increasingly perceived as the default mechanism for out-of-control government spending, its role as a reliable standard of value is destined to fade. Who wants to accumulate assets denominated in a shrinking unit of account? Excess government spending leads to inflation, and inflation pays dollar savers for patsies – both at home and abroad.

A return to sound financial principles in Washington would signal that America still believes it can restore the integrity of the dollar and provide leadership for the global economy. But for all the talk from the Obama administration about needing to exert financial discipline – the president’s 10-year budget is subtitled “A New Era of Responsibility: Renewing America’s Promise” – the projected numbers anticipate a permanent pattern of deficit spending and vastly higher levels of outstanding federal debt.

Even with the optimistic assumptions implicit in the Obama administration’s budget, it’s a mathematical impossibility to reduce debt if you continue to spend more than you take in. Mr. Obama promises to lower the deficit from its current 9.9% of gross domestic product to an average 4.8% of GDP for the years 2010-2014, and an average 4% of GDP for the years 2015-2019. All of this presupposes no unforeseen expenditures such as a second “stimulus” package or additional costs related to health-care reform. But even if the deficit shrinks as a percentage of GDP, it’s still a deficit. It adds to the amount of the nation’s outstanding indebtedness, which reflects the cumulative total of annual budget deficits.

By the end of 2019, according to the administration, the federal debt will reach $23.3 trillion, compared to $11.9 trillion today. To put it in perspective: U.S. federal debt equaled 61.4% of GDP in 1999; it grew to 70.2% in 2008 (under the Bush administration); it will climb to an

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