Some good news on outsourcing:
Judging by various outfits’ plans, this trickle of reverse offshoring may well turn into a flood. In their attempts to pacify U.S. customers spooked by offshoring failures and bad publicity, these companies could end up creating more jobs than they take away. A recent study by economic think tank McKinsey Global Institute has found that every dollar a U.S. company spends on outsourcing results in $1.12 to $1.14 in additional work here.
Foreign investment for setting up U.S. subsidiaries and plants doubled, to $82 billion, between 2002 and 2003, according to the Commerce Dept. That means 400,000 new jobs, most of them tech-related, figures the Organization for International Investment, a trade association based in Washington, D.C. Over the same period, outsourcing has taken away about 300,000 U.S. jobs, according to tech consultancy Forrester Research. So, on a net basis, foreign outfits have actually added some 100,000 U.S. jobs.
And there are, evidently, good reasons why companies are doing this, including it being a good sales tactic, client expecations about local presence, security concerns from Sarbanes-Oxley, and simple time zone coordination for global firms.
One hopes the trend will continue.
(via Pejman)