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Global business environment

1,515 Comments · Business outsourcing

Outsourcing, and most notably offshoring, has leapt into the consciousness of Americans, producing both entrepreneurial zeal and protectionist backlash.

Dire predictions of the demise of U.S. global competitiveness are balanced by enthusiastic invocations of Schumpeter’s “creative destruction” theory and the proven ability of the U.S. economy to recover from whatever shocks might come its way.

The Wall Street Journal’s Daniel Henninger calls “the global migration of human labor” the “most powerful force on the globe today.

The New York Times’ Thomas Freidman has adopted outsourcing as a personal cause célèbre, authoring more than a month’s worth of weekly columns defending and endorsing the offshore outsourcing phenomenon.

Meanwhile, over at CNN, avuncular Lou Dobbs has seemingly dedicated his entire “MoneyLine” program to warning Americans against the evils of offshore outsourcing.
Politically, outsourcing is shaping up to be an important election year issue.

It is difficult to predict how state and federal regulators are going to respond to increasing demands for action.

The AFL-CIO, as might be predicted, is strongly in favor of preventing the movement of jobs to offshore labor markets.

To counter the labor union’s lobbying efforts, business and industry trade groups have formed the Coalition for Economic Growth and American Jobs.

This pro-outsourcing lobby consists of more than 200 trade groups, including the U.S. Chamber of Commerce, the Business Roundtable, the American Banker’s Association, the National Association of Manufacturers, the Information Technology Association of America, and a host of individual companies.

As of mid-Spring 2004, dozens of bills ostensibly designed to “protect U.S. jobs” had been introduced into state legislatures and Congress.

One bill, introduced by Senate Minority Leader Tom Daschle, would require workers at telephone call centers to disclose their physical location at the beginning of each call.

The logic of the bill is that American consumers would then be able to make an informed choice about whether they wanted to continue the call, or hang up and dial again until they reached a call center worker who would be sitting in front of a computer workstation at a preferred physical location.

The irony of waiting long minutes for a technician only to be dismayed by the physical location of the person who finally picks up on the other end of the line is apparently lost on the bill’s backers.

One company that has preempted any such bills is E-Loan, which allows users to select the physical location of their home equity loan request processor merely by clicking an appropriate button on its Web page.

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