Offshore outsourcing and telecommuting are here to stay.
Anyone who tries to put the brakes on these new workplace innovations should take heed of the warning history provides.
Innovations in outsourcing contain the seeds that will help us transform our businesses, and hence our country, into enterprises of increased efficiency and prosperity.
To fight such movements is to stagnate.
Last week, I talked about how the offshore outsourcing trend is coming here, although it’s arriving slower than in the U.S. and U.K., where the shifting of white-collar jobs overseas is well under way and meeting with stiff opposition. This week, I’ll make the case for why we in Canada would be foolish to oppose this inevitability.
On the surface, it is painful to see traditionally well-paid positions leave this country. We are sending excellent software and customer service jobs to India and China, leaving many Canadians who could benefit by such sophisticated work seemingly in the lurch. Soon this trend will include accountants and insurance actuaries, and engineers, too. Even those whose jobs don’t leave, however, are losing out through the decline of spending power in our economy and through our damaged tax base.
But outsourcing is still worth it. Both outsourcing and telecommuting are simply the modern manifestations of what we have seen with all major business innovations. There is a painful adjustment period, but in the end, we are all better off.
There is a historical parallel to two movements: The outsourcing of manufacturing jobs that has been happening over the past several decades, and the corporatization of farms in the early part of the 1920s and 1930s. The former we basically accepted without major negative consequences, the latter we fought, and paid a hefty price.
Governments failed miserably trying to boost the price of wheat from 1919 to 1932 when it fell dramatically from $1.71 to $.38 per bushel (in real 1932 dollars). To fight it, governments worldwide raised tariffs in a bid to preserve homegrown industries. But it didn’t work. Governments tried paying landowners to leave land fallow. Farmers tilled their crops under to drive up prices. None of it worked because the introduction of tractors, crop science and advanced fertilizers, among other factors, helped improve food production.
In fact, a strong case can be made that protectionist measures actually turned what should have been a painful re-adjustment – to new farming technologies that required far fewer labourers – into a global depression, as all sectors were hurt by the new protectionism.
People such as Dr. Penny Gurstein underplay this fact. Gurstein is a professor at the University of British Columbia who spoke last week on CBC Radio’s Ideas, the thrust of which was that there is a high price to pay when we transfer jobs overseas or even when we telecommute.
Prices of labour decline. Living standards decline – especially for women. And we export our culture to a country struggling to maintain its own.
Like John Steinbeck before her, Gurstein eloquently makes a case for the people disaffected by such economic changes. But as Steinbeck implicity acknowledged, absolutely nothing can stop these changes. They can only be adjusted to and made humane. In fact, telecommuting may contain part of Canada’s answer to the outsourcing movement, even though Gurstein lumped the two trends together.
As a frequent telecommuter myself, Gurstein’s objections to working from home are inflated. I have increased control over my life and can spend more time with my children by shifting work to their sleeping hours. My “business” can now be conducted almost anytime (I’m writing this at 9 p.m., with my three kids tucked in bed).
It’s up to me to balance the two, and it works. It’s also saving my employer valuable office space.
As for women being disenfranchised: My wife is running a home-based business that accepts contract work from Germany. So she’s taking full advantage of the “offshore” trend coming this way across the Atlantic.
Instead of increased “isolation,” as Gurstein feared, my family is exploiting the possibilities that new telecommunications technology has allowed, and we are finding ourselves better connected to colleagues (spread out as they are) than ever before.
One of Gurstein’s other objections was to the loss of labour’s negotiating power when workers are isolated from each other across the globe or at home. But the Internet does the opposite, and it provides a great tool for discerning fair market value of certain skills (although it does make labour action, such as strikes, more difficult). My wife has great confidence when she negotiates a price with her publisher.
So the price to pay for telecommuting and shifting jobs “overseas” depends a lot on which side of the sea you might be on and how intelligently you play the game.
In Canada, therefore, we need to focus on our strengths, such as our educational system, and use offshore outsourcing to counteract our weaknesses. Canada has shortages in many trades, while our birthrate is barely at replacement levels. By sending work out of the country, workers can be channelled to where they are needed most. I have faith that Canadians will innovate, coming up with new technologies, and new ways to cope, that will make outsourcing less fearsome. The key is to keep trade channels open, so when we innovate, we have someone to sell our products to.
The final important benefit to this trend is that it will increasingly allow developing countries that embrace modernity and trade openness to be rewarded for their courage.
It’s a two-way sea.
