For more than two years the Iola Register has outsourced its printing to the Lawrence Journal-World. INDUSTRY as a whole is rethinking the outsource and especially the offshore model of business. WHILE THIS BODES well for the economy, it also reaffirms that U.S. workers must develop skills not easily replicable by a robot and that they can do it best.
The result is a superior product. The Register lacked the resources and talent to produce the full-color product that we now so readily take for granted.
The downside to the arrangement is the daily drive to Lawrence and back to retrieve the printed product. That was brought home last week when wintry weather prevented safe travel. Today we waited until mid-morning to fetch the paper. Delivery to rural areas will be postponed until the roads are passable.
On such a day I think how nice it would be to have our press back in operation, feeling some semblance of control.
That feeling is fleeting. In reality, we know our limitations and gladly yield to progress.
A recent article in the London-based Economist noted that when U.S. industries take into account the cost of shipping goods from China to the United States, the savings is shrinking. What was once lost in logistics, was easily recouped in lower overseas wages. Now those savings are being usurped by foreign workers demanding — and receiving — higher pay. In India, salaries for software engineers are going up rapidly and inflation is high. The savings by shipping work overseas is now half of what it was in the 1990s when the outsourcing model began in earnest.
Increased automation by robots in U.S. industries is also keeping more business on shore, and in fact is the greater cause for lost jobs than by having the work done overseas.
Doing your work in-house also builds for better customer relations and allows for better creativity. Having ownership in a product makes a huge difference in the desire to keeping it competitive.
Managers also note the hidden cost for what is lost in translation when dealing with different languages and cultures. Multiple time zones also complicate communication.
Economists predict U.S. industries moving jobs offshore will begin to taper by 2014 and stop altogether by 2022. The main reason is that by then all the easily commutable jobs will have been moved offshore. Today, American and European banks and financial-services firms have already moved about 80 percent of what they can reasonably send to India and Malaysia.
— Susan Lynn
Industries seeing diminished returns for offshore work
