25 Feb The Great Offshore Outsourcing Debate
A few weeks ago, I referred to offshore outsourcing as an issue du jour. I stand corrected. It’s rapidly becoming an issue de l’annee (an election year at that for America) due to slow job growth and increasing questions about the economic future of the U.S. Prominent voices along every point of the political spectrum from the contenders for the Democratic presidential nomination to the Bush Administration and a host of academics, corporate executives and media commentators and reporters now seem to be focusing 24/7 on the trend of outsourcing of manufacturing and service work (and jobs) offshore.
Even Federal Reserve Chairman Alan Greenspan has weighed in on the issue. During a speech last week, Greenspan recognized “a considerable gulf” between the views of economists, who point to the benefits of free trade, and those workers who have lost jobs to increased foreign competition. “There is a palpable unease that businesses and jobs are being drained from the United States, with potentially adverse long-run implications for unemployment and the standard of living of the average American,” Greenspan said. But he noted that history showed “our economy is best served by full and vigorous engagement in the global economy.” He said the country has always managed to replace jobs lost to lower-wage foreign competition with jobs in more advanced industries and he predicted this trend would continue. Let’s hope so.
While many may dread all the attention now given to offshore outsourcing, I welcome it. This is an urgent issue that the country as a whole needs to debate. Lord knows it isn’t being openly addressed in many corporations today. And that’s part of the problem. Life changing decisions get made everyday in large companies with little transparency or real explanation to those most affected. Fortunately, our political system, unlike most corporate governance approaches, provides mechanisms for policy decisions to be openly debated and put to the test of voter enforced accountability. CEOs may not have to win the votes of workers to stay in their jobs (now there’s an idea), but politicians do. For better or worse, it looks like this fall’s election could be a referendum on the offshore outsourcing question and the broader economic issues and policies that underlie it.
Let’s hope this debate rises above the rhetoric we are hearing lately from people on both sides of the issue like “outsourcing jobs is just another way of doing international trade” on the one hand and “CEOs sending work offshore are Benedict Arnolds” on the other. These sorts of simplistic and inflammatory comments are not helpful. Globalization of business – both manufacturing and services – is not going to go away. But we do have choices as to how we respond to it. It is not too late for companies, communities, governments and individuals to formulate policies and take actions that will help our nation to meet this latest challenge successfully.
Is it inevitable that the globalization of business and labor markets drives a bigger wedge between workers and communities on the one side and large corporations on the other as it seems to be doing today? Or can the debate of this issue instead be used to bring all the parties closer together around shared understanding of our common values and purpose, a consensus about strategies for innovation and growth, and a new agreement about how people – their knowledge, skills and commitment – should be factored into the new global competitive equation?
Let the offshore outsourcing debate continue and may the best ideas win!
Tony DiRomualdo is a business researcher, writer, and advisor with Next Generation Consulting. He works at the intersection of people, business strategy, and information technology to help companies create a committed and high performance workforce. Tony can be reached at email@example.com.
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