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Onshoring Picks Up Steam

Here’s some more evidence that the U.S. economy has a bright outlook in the long term: The Wall Street Journal reports that jobs that once moved to Asia are now returning to the United States.

While the outsourcing of back-office and call center work to Asia is likely to continue, many companies are looking to source more of this work in cheaper, rural and small city environments in the United States.

Costs in these areas are significantly lower than in high-cost urban centers like New York, and American locales don’t have the political risks of some foreign countries. At the same time, U.S. workers in many cases are actually more productive than their competitors overseas:

“Companies are not satisfied with the quality overseas, and they can’t afford to have things reworked two or three times,” especially in technology development, Mr. Schindler said. After an overseas outsourcer stalled the upgrade of a bank’s software for two years, the bank hired CGI’s IT developers to finish the project at one of its U.S. locations. The job was done within weeks, he said.

The doom and gloom about America’s long-term prospects misses some important truths. An energy boom is going to reshape our future and give us something close to true energy independence. Meanwhile, manufacturing and back-office work is returning to our shores. Our flexible economic and social structures are allowing us to better adapt to changing conditions than our major rivals in Europe and other parts of the world.

America’s task today is to lay the foundations for a new era of greatness, not to hedge against decline. The future has its risks, but never in its history has the United States been better poised for decades of transformative growth. If we have the courage and the wisdom to take full advantage of the opportunities before us, coming generations of Americans will enjoy prosperity greater than anything the world has ever seen — and the United States will be able to do its part to help that prosperity spread around the world.

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  • Eurydice

    At the same time, there’s another article in today’s WSJ about how US corporations are reincorporating overseas to lower their tax rates.

  • Jim.

    I’m happy to see Onshoring becoming more popular. It would be nice to see a counterbalance to the tendency of firms (from India, in my experience) buying up American companies and shifting the bulk of their workforce back to the home country.

    It’s true what they say about quality, too… you pay about half as much for a worker in India (once you pay the middlemen) but you effectively only get a quarter of the work.

  • JG

    Don’t count the contact center industry out!

    Businesses are increasingly using domestic Work-at-Home agents in their operations. The elimination of facilities related costs helps to offset the differential of offshore labor. This is a trend that is ready to take-off. Watch and see!

  • Mick The Reactionary

    Which one is larger, a number of manufacturing jobs that returned to the USA or a number of posts about it on VMead?

    If one fills post with hot-air instead of facts and stats, there is no limit on imagination.

    Obama now would be a shoo-in for reelection if he appointed Mead as a Job Czar and BLS Director back in 2009.

    BLS Director Mead would have declared unemployment at 2% using ViaMead patented methodology.

    And everyone would be happy on their way to pick-up their government checks.

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