Obama€™s outsourcing assault

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The press has been buzzing with the latest American electoral war development. Obama, on one side, has vowed to discourage outsourcing across America stating the age old adage that American jobs should remain in America.

John McCain on the other hand believes that outsourcing is helping to create a healthy competitive US economy.

The question is whether the outsourcing industry is quaking in its boots at the thought of an Obama led siege on one of the biggest outsourcers?

Firstly the numbers involved are, indeed, significant, Forrester Research predicts that 3.3 million US jobs and $136bn in wages may be outsourced to various service providing locations, saving US businesses billions of dollars. However, simply stating that taxes will be placed on these businesses may not deter them as much as the Obama camp believes.

Offshoring is an integral part of the rising tide of globalisation. Whereas in the past, many developing countries could only really compete in global agricultural markets, the ability to provide services such as IT, accounting and customer contact centres is allowing these countries to fully enter the global market and reap the economical and developmental rewards.

There is always a worry, especially within the Western world, that they are harming their own economy by moving jobs overseas. However this should not be the case.

More often than not US companies will be using these offshoring locations to conduct lower level work retaining much of the higher level operations in-house or at least on shore.

The savings that the company gains should allow for more money to be ploughed back into the economy and into expanding the business further, possibly creating more jobs. In fact NOA’s own DTI carried out a study some years back which revealed that for each pound offshored the UK economy benefited by £1.20.

Globalisation cannot be ignored or simply discarded. If the future pans out the way it is forecasted, globalisation will have a positive impact on all countries competing on the world stage.

Outsourcing and offshoring is here to stay and it will take a lot more than an electoral battle fuelled statement to make the big players rethink the outsourcing model.

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