Forutne has an article about Tata - a large Indian outsourcing and services firm - opening a call center in Ohio. Key quote from the article:
"The phenomenon has a name: "insourcing," the term experts are starting to use when foreign multinationals open offices on U.S. soil and hire Americans, at a higher price, to do the very jobs they once lured overseas. In this case the center in Reno is targeted toward companies willing to pay a premium - its workers there cost up to 40 percent more than their counterparts in India - to give their U.S. customers a more culturally fluent, less frustrating 1-800 experience. (No more hearing someone read from a script ten time zones away.) "
The outsourcing/insourcing/job flow issues associated with global trade are complex. Although costs are on average still much lower in China and India than the US, there are many cases where for customer service or productivity reasons jobs stay here or flow back to the US. Also, costs are rising rapidly in China and India, so the number of jobs that could be insourced will rise.
Related to this, I've been in several corporate meetings lately where the topic was discussing moving offsource manufacturing back to the US. Driving these discussions are the high cost of air freight relative manufacturing costs. The products involved are electronics and the companies are constantly making changes and updating the products. This makes using sea shipping too slow. These companies also need regular and ongoing contact with the manufacturing facility to for testing, QA, etc, which is much easier if the manufacturing facility is local. This combination makes a local manufacturing facility attractive even though the base manufacturing costs are higher than having the work done overseas.
The bottom line is both companies are moving some of their manufacturing back to the US. I can't really call this a trend yet - both because I don't know how wide spread this is and also the macro data continues to show that manufactuing employment in the US continues to fall - but this is an interesting "weak signal" of possible change.
For small businesses insourcing is interesting on several levels. First, companies looking to insource will also look to local contractors to do this work. A number of US based phone support outsourcing companies have tapped into this trend. If manufacturing starts to move back to the US (and this is very speculative at this point), small US manufacturers are in a strong position to participate.
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