[extropy-chat] Will the West be left behind?

BillK bill at wkidston.freeserve.co.uk
Sun Feb 22 00:36:40 UTC 2004


Behind the Asian outsourcing phenomenon

Cnet has an article from McKinsey Quarterly from this year’s Consumer
Electronics Show about how US companies are offshoring jobs.

The point they make is that companies are not just doing this to cut costs.

"To most executives in the United States and Europe, offshoring means
cheaper wage rates for labor-intensive activities. These cost savings
are real, but some Asian companies can also offer superior performance."

"Wage rate differentials generate cost savings, of course, but the
really compelling gains come from pairing savings with top-flight skills."

"U.S. original equipment manufacturers (OEMs) began by moving relatively
unskilled assembly operations offshore, often farming them out to
electronics-manufacturing services, such as Celestica, Flextronics and
Solectron. Increasingly, these OEMs have come to rely on offshore
companies to provide related services in product design, sourcing and
inventory management."

If these Asian countries offer lower wages AND superior performance AND
a less-restrictive legal environment, the future does look pretty gloomy
for the West.


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