Executive Briefings

Despite What Politicians Say, Offshoring Is Here (or There) to Stay

The imperatives of offshore facilities and employees are - and will remain - central to American companies' international competitiveness. A company's foreign sales can approach or exceed 50 percent; its non-U.S. employees can be 25 percent or greater of total workforce; its supply chain of third parties is vital.

American companies will, for a wide variety of reasons relating to global dynamism, continue to participate in this transformative era of global economic change by increasing activities and hiring workers outside the U.S., especially in fast-growing foreign markets. (They may also, on a limited basis, move some jobs back to the U.S. for certain domestic markets due to rising costs abroad and labor productivity at home.) Yet, politicians oppose - or at least do not defend, and certainly do not fairly explain - this most fundamental international dimension of global business reality. In the State of the Union, President Obama declaimed: "No, we will not go back to an economy weakened by outsourcing..." The Republican candidates largely stand mute on off-shoring because of jobless pain at home and the difficulty of explaining that trade is only one factor causing unemployment. Offshoring and outsourcing today are like sex in the Victorian era: repressed or criticized in public discussion, much practiced in private behavior.

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The imperatives of offshore facilities and employees are - and will remain - central to American companies' international competitiveness. A company's foreign sales can approach or exceed 50 percent; its non-U.S. employees can be 25 percent or greater of total workforce; its supply chain of third parties is vital.

American companies will, for a wide variety of reasons relating to global dynamism, continue to participate in this transformative era of global economic change by increasing activities and hiring workers outside the U.S., especially in fast-growing foreign markets. (They may also, on a limited basis, move some jobs back to the U.S. for certain domestic markets due to rising costs abroad and labor productivity at home.) Yet, politicians oppose - or at least do not defend, and certainly do not fairly explain - this most fundamental international dimension of global business reality. In the State of the Union, President Obama declaimed: "No, we will not go back to an economy weakened by outsourcing..." The Republican candidates largely stand mute on off-shoring because of jobless pain at home and the difficulty of explaining that trade is only one factor causing unemployment. Offshoring and outsourcing today are like sex in the Victorian era: repressed or criticized in public discussion, much practiced in private behavior.

Read Full Article