Why outsource?
(Harvard Business School)
January 24th, 2012
12:14 PM ET

Why outsource?

Harvard Business School alumni offer up rationales in a new report based on nearly 10,000 responses to a survey of 50,000 HBS grads.  Note, in particular, a third of respondents cite the need for skilled labor as driving their outsourcing decision.

According to the report:

"During the past year, more than 1,700 respondents were personally involved in decisions about whether to place business activities and jobs in the U.S. or elsewhere. In these choices, the United States competed with virtually the entire world and fared poorly, losing two-thirds of the decisions that were resolved. Facilities involving large numbers of jobs, high-end work, and groups of activities located together moved out of the U.S. much faster than they moved in."

The study found:

"Of the 1,005 location decisions about potentially moving out of the U.S., the most common alternatives considered were China (42 percent), India (38 percent), Brazil (15 percent), Mexico (15 percent), and Singapore (12 percent)."

So what can be done?  The authors have some ideas here.

Post by:
Topics: Jobs • United States

soundoff (24 Responses)
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    January 24, 2012 at 3:20 pm |
  2. j. von hettlingen

    There are a few industries who don't take advantage of cheaper labour costs abroad and outsource their manufacturing process. High-end and exclusive products like watches with complicated movements and exquisite jewelry that are hand made and cost a fortune.

    January 25, 2012 at 4:37 am |
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  6. PrimeOutsourcing

    Outsource to reduce costs and increase productivity! Thanks for sharing. 🙂

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  14. Tom G.

    I am old enough to have been around at the start of outsourcing to the third world and I can tell you that most arguments in favor of it today are simply disinformation. In the early 70s as Nixon opened up China, US steel production was the first to go....because of EPA and OSHA and minimum wage requirements; also the lack of collective bargaining protection in China and Taiwan. Jobs streamed out under Reagan and subsequent Presidents because wealthy Americans and others invested ever more heavily in those companies and in stripping US corporations, which ended up selling out production facilities under bankruptcy or the threat of it, to China and other destinations. Prices for goods are market driven, just as we are constantly told the price of fuel is. Bring production back to the USA and entrepreneurs will figure out how to make it so American consumers can afford to buy it, just as we did in the 1950s.

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