Despite the general saying that
offshoring an activity – rather manufacturing or service – lead to losses of local jobs, recent researches has shown that US economy is the biggest winner in this game of the globalization.
The main sources of the bennefits
earned by US economy comes from the fact that the US
companies retain most of the gains generated by the offshoring – including
services offshoring in the most recent wave of offshoring.
Just to ilustrate how it works, lets supose a company
outsource its call center to India, than the company will increase their profits by paying to the Indian worker 1/10 of what a US worker would earn, but also the US consumer will benefit from lower prices, also the money spent in India to pay the outsourced company will come back to US in 2 ways (1) Indian companies buy other services or products from US companies; (2) Indian individuals buy US goods; and ultimately part of the profits earned by companies in India come back to US as dividends, since most of the companies are owned by US companies.
The final result is that for each dollar generated by service offshoring, 2/3 of it are earned by US economy, and will be invested in US to improve technology, education and therefore to increse quality of life.
The mystake on blaming offshoring rely on focusing only the consequences of it in short term rather them its beneffits in a broader view, the same hapenned in the past with the offshoring of manufacturing activities, and what the time showed is that local US work force accomodate itself, and
jobs lost in one area where rapidly compensated by creation of jobs in other areas.
The challenge US must do now is to show the problem in the broader perspective to its citizens and to cope with developing contries that resists to enter into the offshoring game, by keeping the barriers to import (and export) services to US.
The second will be achieved easily than the first one, due to the need of developing coutries to generate new jobs and also to receive
international capital (both as investment and by trade operations with services). However the first will rely much more on local political disputes, and into the dificulty for the government to solve the day-by-day problems of the US workers that lose their jobs everyday due to offshoring.
The US as the more developed economy in the world has more to win with offshoring, becouse ha more competitive advantages and also has bagain power bigger han any other coutry, althoughUS has to solve some structural problems that has created some internal resistence to the services offshoring, mainly due to the behaviour of US and States government.
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