Outsourcing jobs - the path to a better economy?

Despite what you may think from the title of the thread, there is a new theme in the world of outsourcing that can be a huge benefit to the US economy.

The shine has come off the off-shoring bandwagon. India, labor costs which used to be 30 cents on the $ is not about 75 cents. Factor into that the time zone issues and the massive turnover and you are pretty much at break even.

Move to the next place, China. Red tape and zero respect for intellectual property compounded by the time zone and language make that a very difficult place to outsource to.

Next, Eastern Eurpoe. No go there either. Smart folks, but with a total Soviet mentality. Plus folks are hammered half of the time. I ran a shop in Warsaw for a while and it is more expensive to do work there than in the US.

Right now, its Vietnam and Singapore. The issues that apply to both China and India apply.

The new model and one that you will be seeing more of is "outsourcing" in the US. Firms are beginning to realize that there are pockets in the US where the skills are high, population stable and the labor is significantly cheaper than in major metro areas. The quality is also fantastic. What firms are doing, a shop (Canadian) CGI, TATA and Widpro (Indian) are beginning to do is go into depressed, small cities with a university and open an outsourcing shop. CGI just did this in Troy, AL and brought several hundred jobs into the town. These are well educated, well spoken Americans who now have an opportunity for a knowledge type job, benefits and a true career. Others are being planned for Missisippi and West Virginia. There are serious talks underway to put one in Grey's Harbor, which is SW Washington where the logging industry has been hammered.

This business model will take hold and I think the model in the future for "outsourcing" will be labor arbitrage in the US. Its a good thing and not unlike Kia opening a job in West Point, GA. I predict tens of thousands of American's will be employed in this manner. India will be the primary loser here.

One of the things that will help push this trend to keep jobs on shore is supporting politicians who insist that all government work be done on-shore. If one of these firms lands a contract with the government to do processing for a 10 year term, the investment in building out a center in a rural community pencils easily. If you are concerned about jobs being moved off-shore, look at the position the folks running for office have and vote accordingly.

If tomorrow industrialized nations stopped buying from the third world, stopped all aid programs, stopped all medical help programs, stopped accepting asylum candidates, and continued their own decline in breeding, the problem would be for the most part solved. This is done not by taking violent action against others, but by simply stopping our current destructive practices. Smart societies would further structure themselves to reward their best people, not just their most profit-making, and through that would achieve a greater degree of population quality and awareness.