Operations Management

Introduction to Offshoring

Written by Clayton Reeves for Gaebler Ventures

This article tackles another difficult subject in offshoring. Although offshoring seems to strip America of jobs, it has other benefits that trickle down as well. Learn how offshoring can help your business to level the playing field.

Outsourcing has its own set of detractors and critics.

Introduction to Offshoring

However, the process of offshoring has by far more serious implications for economies and workers in domestic countries. The United States has shifted from a manufacturing oriented economy to a service oriented economy over the last thirty years.

However, not all employees of manufacturing firms have the ambition or desire to change their skill set in order to fit into this new economy. This means that when the landscape changes, that they will have more trouble assimilating themselves into the new order.

Really, offshoring presents an opportunity for those in the country that offshores the work to increase their skill set and take advantage of the cheap labor the other country provides. Entrepreneurs know that in order to take advantage of such an opportunity, one must work incessantly and constantly look for new and innovative ideas to implement. However, not everyone has that drive to change.

The negative reaction to offshoring is mainly caused by antiquated views of economics and selfish motives. Offshoring is, inarguably, a good thing for America. What is debatable is whether the benefit to the lucky few that take advantage of the cheap labor offsets the damage that it does to America's towns and factories.

It is a staple of economics that in a free market system, which is what capitalism is roughly based upon, that workers will be able to flow freely from country to country depending on where they are needed most.

However, in practice, there are several obstacles in the way of this hypothesis. Language barriers are certainly not the least of these concerns. Also, people may simply become disenchanted with the thought of learning new things, or simply enjoy the comfort of a job they have held for many years. Others might feel like building things is an American practice, and that things made in China or India are inferior and cheap.

All of these things seem steeped in validity, but the simple fact of the matter is that as times change, people must also change.

As a small business owner, it is your responsibility to stay one step ahead of the curve in most regards. You must see the pitch before it is thrown, so to speak. This will enable you to take advantage of these changes in the world economy. It is imperative that you embrace change, as opposed to resisting it.

Resisting change does not work as an entrepreneur. Small businesses must be flexible, quick to react and forward thinking in order to compete with capital laden corporations. If you do not embody a forward looking mentality, then your company will be swallowed up by people who simply spend more money than you.

This is why offshoring, outsourcing, the flattening of the global landscape and other changes in the world economy should be at the forefront of your concerns as a small business owner. These things can be taken advantage of with the right business savvy and motivation. Services can be moved to China for a fraction of the cost. There may be negative initial backlash, but dollars and cents do not lie and businesses that rely on Americanism and loyalty to sell their products will find themselves boarding up their windows.

When he's not playing racquetball or studying for a class, Clayton Reeves enjoys writing articles about entrepreneurship. He is currently an MBA student at the University of Missouri with a concentration in Economics and Finance.

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