Will Offshoring Really Be an (American) Political Football?

Will Offshoring Really Be an (American) Political Football? Those of you who listened to Obama’s State of the Union speech last week might have caught three references to the evils of outsourcing. And if you’ve taken a gander at Bain Capital’s website, you’ll quickly ascertain that the source of Romney’s wealth is outsourcing. Moving onto Gingrich, who blames the North American Free Trade Agreement for outsourcing, well, it’s pretty apparent that he’ll be outsourcing jobs to the moon. Where will the shared services and outsourcing industry come out, on the other side of November? Call me a cynic, but I don’t see outsourcing as much more that a series of sound bytes in this year’s US election. Certainly, it’s a fashionable word, crystallizing the electorate’s dissatisfaction with the current state of affairs – but other than a rallying cry, I don’t predict a serious volte-face on the trajectory of adoption. Why is "outsourcing " fundamentally more bark than bite? First, outsourcing is engrained as a business model. Whether it’s used solely as a cost reduction tool, or as part of a broader transformation initiative, moving jobs offshore is not going to stop as a result of political diatribes. Sure, if the stories are true, C-suite execs are being leaned on, and will naturally think twice about their options this year in light of other potential legislation, but stopping the train is highly unlikely Second, blaming outsourcing for the state of the American economy is a bit disingenuous. If I were Obama, Romney, Gingrich et al, I’d spend much more time worrying about the hollowing out of the American workforce. Reductions in force—whether prompted by the recession, globalization, technology or other catalysts—have hit middle management hard, rendering the American workforces less competitive. We are now in a vicious cycle, moving jobs offshore because no one’s left in the U.S. to manage them. Third, globalization is here to stay. Even before Tom Friedman declared that the world was flat, companies, big and small, were looking to markets beyond their borders. Protectionism is not feasible for any economy. Romney, in 2006, admitted as much by saying that although jobs were moving overseas, the trend built demand for more American goods and services. Fourth, the politicos really don’t understand what drives outsourcing, how it works, or what the value proposition actually is. Heck, if they did, they’d understand that the operative term is "offshoring" rather that "outsourcing"; and that access to talent will eventually eclipse the cost benefits. So the next time you hear a candidate being called a "job cremator" as opposed to "job creator", consider it just rhetorical political football. While the movement to "offshore" may slow this year, it’s most likely just part of the now familiar gridlock that affects us all, every few years.

Will Offshoring Really Be an (American) Political Football?

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