Dollars and Jens
Wednesday, March 31, 2004
MSN on international outsourcing:
A study released today by the Information Technology Association of America (ITAA) says that outsourcing white-collar jobs has thrown some Americans out of work, but predicts that the trend will ultimately lower inflation, create jobs and boost productivity in the United States.


Savings from outsourcing allowed companies to create 90,000 new jobs in 2003, with more than one in 10 of them in Silicon Valley or elsewhere in California, researchers said. The report predicts that in 2008, outsourcing will create 317,000 jobs -- 34,000 in California.

Meanwhile, Fed governor Ben Bernanke, tackling an issue that has resonated in the U.S. presidential campaign, said there has been undue focus on the movement of U.S. jobs abroad.


David Butler's book, "Bottom-line Call Center Management," examining the job that employs 7% of the American work force, hits print just as the topic becomes a political hot potato.

"What CEOs don't tell reporters is that outsourcing is still experimental and the experiment may not be working," said Butler, who heads the international economic development doctoral program at the University of Southern Mississippi in Hattiesburg. "Overseas call centers can cost more in customer goodwill than they save in staff salaries."

Many corporate executives who outsourced call centers to Asia confided to Butler that they are plotting quiet moves back to U.S. soil. They don't want to lose face by admitting errors. But they don't want to lose American clients who resent having customer service calls answered on the other side of the world.
Meanwhile, Hot Topic is reported to enjoy a competitive advantange over other fashion retailers by virtue of its buying American, and thus receiving inventory more quickly after placing the order; other retailers are seeing inventory go out of style while it's still crossing the ocean.

There will continue to be jobs for Americans, and more if we don't handicap our economy by forgoing opportunity to do things more efficiently than international competitors. Sometimes that will mean doing things ourselves; sometimes it will mean hiring someone else to them for us. If the people with money at stake are making the decisions, more likely than not they will make the right ones.

Powered by Blogger