Outsourcing is a complex picture

Trump, outsourcing

The backlash against critics of outsourcing seems to be gaining momentum, with The Hill coming out and saying people such as Donald Trump (pictured, he’s the one on the right) criticising IBM for making Americans redundant and taking jobs to India instead.

The Hill’s piece comes swiftly after it emerged that IBM now employs more people in India than it does in America, which has caused a predictable reaction. The Hill rightly focuses on the complexity of the equation: if jobs go overseas and products and services get cheaper in the US, then the American consumer benefits. If the developing world builds up as a result of the increased business through outsourcing, the overall market for American products could increase (this is unproven but likely).

Intelligent Sourcing has its own wish list when it comes to sourcing and people commenting on it as if it were a universal job-killer:

  • Ever since seamstresses first took action against the spinning wheel, technology has been changing the nature of work. In some cases this means supplanting existing jobs. Nobody says this is pleasant but if we could stop behaving as if it were brand new it would be a start.
  • Outsourcing can be done in the domestic market. Many cloud companies are based in the US, so when US presidents say they’d like outsourcing stopped they need to be aware that would involve shutting Amazon down.
  • Offshoring isn’t synonymous with outsourcing. The guy in the street might not be aware of that but the president should be.
  • Related point: bear in mind that although they’re not the same jobs, outsourcing does create jobs as well as take them away.
  • Consider that automation is doing more to create economies of scale than arbitrage through offshoring at the moment – this shouldn’t be about automation being bad (it’s another change as offshoring was), but if job preservation is your priority and you’re still focused on geography you may be missing a bigger picture.

That wouldn’t be a bad starting point, anyway…

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