Offshore or Onshore?

The economic crisis has spawned a new dilemma seemingly at odds with the “flattening of the world”. Flattening is a term often used nowadays to emphasize the strength of contact between countries. Nowadays travel and the internet have made it possible to segment companies across continents.

Why do companies go this route? Unsurprisingly it’s for profit. For better or worse economics usually end up driving the train. While companies generally increase their profits by this kind of offshore segmentation, the shareholders are usually the only ones to see the benefit.

While there is high employment in a country then everyone is happy, however when there are large numbers of lay-offs the ethic of “offshoring” become more personal. Suddenly your friends are laid off because their jobs have gone overseas. The resulting questions are complex:

Against offshoring:

• It creates hardship for local workers.
• If all profits only go to the upper echelons, shareholders or developing greater offshore structure, jobs will never return to the local workforce.
• Poverty in the workforce and large-scale unemployment worsens a shaky economy.
• Local workers’ lives should be more important than quick profits.

For offshoring:

• It may be the only way a company can survive the recession.
• Resulting profits could create future jobs for rehiring of locals.
• A failed company will ultimately be worse for the country’s economy.
• It’s going to happen anyway. Be the first to gain from it. Your workers will have to retrain before too long regardless. Better sooner than later.

Is there a clear answer? Not really. Economically offshoring makes more sense, but it would be nice to think that companies would put on a self-imposed limit on spending the profits. Rather than allowing them all to go to upper echelons and shareholders, perhaps they could commit a portion to retraining and new job creation.