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Outsourcing is not a dirty word

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Dave » 14 years 14 weeks ago

The practice of outsourcing, the doling out of certain business processes often to low-cost labor in developing nations (commonly referred to as offshoring here in America) has been known to stir heated debate centered around the notion that Americans are losing their jobs to other countries. It’s been a hot-button political issue in recent election cycles, and has received intense media coverage.

All said, I believe the world is coping with transition as it deal with the realities of our time. As the world is increasingly connected and our lives interdependent, a global free market must prevail. Sure, that’s oversimplified, and the debate on all sides of the issue is healthy as we struggle to understand these new realities. Woven, with its focus on tools to support global collaboration, is of course right in the middle of this issue, and we’ll continue to analyze and to learn.

Below are some excerpts from a few (old and new) related articles I was looking at recently.

From a Newsday article:

Free trade creates jobs - millions of them: Since the North American Free Trade Agreement was signed by President Bill Clinton in 1994, American payrolls have expanded by some 18 million jobs. More than 12 million U.S. jobs, and a quarter of economic growth, currently depend on exports. By helping to lift countries such as India and China out of poverty, trade develops enormous new markets for American products and service.

Outsourcing is just another form of trade: Using telecommunications technologies like telephones, the Internet and broadband to send services to the United States is no different from shipping cars or wheat or apparel.

[…]

[…] U.S. companies cut costs, increased research and development, and invested in productivity-enhancing technologies. As a result, the longest economic expansion in the nation’s history was unleashed, creating 35 million new jobs and launching the information technology sector.

The United States is an economic phenomenon, with annual output exceeding $11 trillion - greater than the total output of the next five most productive economies combined. This unprecedented economic success is not due to the size of the U.S. population or its natural resources - other countries have more - but to the free-market principles and policies around which the economy is organized. Free trade is a critical ingredient in that proven recipe for prosperity.

From an excellent piece in Global Politician:

All the people of the world can contribute and those who keep themselves isolated from others will be left behind. Some of the isolated Pacific islands did not even know how to make fire when they were invaded just a few centuries ago. That is the by-product of isolation.

[…]

Since embracing world trade and moving away from Communist policies in favor of what is increasingly a free-market, China has become a major producer of world goods. We do not suffer because Chinese are doing better today than 25 years ago. We benefit from it because we can buy goods that are cheaper or better or just more desirable. Likewise if Africa, North Korea and all the other countries embrace proper economic policies, including free-trade and globalization, we will again benefit from the products of their brains and labor.

[…]

[I]t must be said that the point of working is not merely to work. If that were true, then why not make the whole population to just dig useless holes and then fill them up? The point of working is to produce goods and services that others want. If Mexicans or Chinese can create products that are better or cheaper or just more desirable than those made by American companies, then American businesses should either improve or do something else that consumers actually want. To force consumers to purchase goods they don’t want makes the world economy worse. By letting each company or country to produce the best goods - “best” as judged by what consumers choose to spend money on - we make the world economy better for the simple reason that everyone is producing better goods, thus the overall world product becomes better.

We’re not so much talking about outsourcing as we are about globalization, and it really hits on how one sees the future of our world. I’ll continue to share more.