Does offshoring make sense?

An interesting article I read recently argues that offshoring and immigration, which the article argues are positively correlated, in fact show that the regions which take part in offshoring and have a good immigration policy to encourage workers to come to the region, is in fact a "sign of a region's economic vitality."

The article goes on to compare regions in Italy which have positive immigration policies to attract workers, viable manufacturing sectors (Northern Italy basically)and also do a lot of offshoring in industrial processes.

One of the most interesting paragraphs is the following:

"Resisting these economic forces is pointless, while adaptation is fruitful: as technological progress lowers the cost of transporting labour-intensive goods, accepting immigration and exploiting offshoring opportunities are ways to make “good jobs” available to local residents in an unavoidably globalised economy. Restricting immigration or discouraging offshoring (by tax instruments, for example) will, in the end, only damage competitiveness and drive rich economies into a dead end."

The article argues that either you play along and benefit from globalisation forces such as offshoring and immigration, or suffer the consequences. Lately it seems, governments or candidates keep raising the fear of protectionism when talking about offshoring and the negatives associated with the phenomenon.

I spend a lot of time in the Bay area, and most companies I speak with have a lot of offshoring going on, and also lots of immigrant workers from those same regions where work is being offshored to - working right along side Americans. The region is thriving, and in general the software arena for workers with experience and even inexperienced college grads in I.T has never been better. University of Waterloo from my side of the fence are in hot demand, most have serious offers in their 3rd years with some of the top companies in North America - many elect to stay put in the area and form their own startups (know the name RIM?).


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