Is the Downturn Affecting Offshore Outsourcing?
Filed in archive Opinions & Insights by Gary Zeiss, Esq. on November 20, 2008
While outsourcing companies seem to remain bullish about their future (see this article), but I often wonder whether this is more like cheerleading in the face of a difficult future.
First, the very end of the article shows a little caution - pointing out the broad-based trouble being faced by the economy. Second, political winds are clearly aligned against outsourcing. Third, and most interesting, is the possible turnaround of the "shareholder value" culture in an economy that has universally decimated shareholder value.
I, for one, think that the current recession, and its broad, global effects, has the potential to change our culture from a shareholder-value focused economic culture to a stakeholder-value focused economic culture. Certainly, government investment in large financial and industrial companies may indicate that this is possible.
This kind of shift - to a stakeholder-value focused approach - could have a long-term adverse affect on outsourcing, as justification will need to be more than dollar savings (particularly when those savings have proved elusive). As such, I think it could be a very, very long time before we offshoring rebounds.
First, the very end of the article shows a little caution - pointing out the broad-based trouble being faced by the economy. Second, political winds are clearly aligned against outsourcing. Third, and most interesting, is the possible turnaround of the "shareholder value" culture in an economy that has universally decimated shareholder value.
I, for one, think that the current recession, and its broad, global effects, has the potential to change our culture from a shareholder-value focused economic culture to a stakeholder-value focused economic culture. Certainly, government investment in large financial and industrial companies may indicate that this is possible.
This kind of shift - to a stakeholder-value focused approach - could have a long-term adverse affect on outsourcing, as justification will need to be more than dollar savings (particularly when those savings have proved elusive). As such, I think it could be a very, very long time before we offshoring rebounds.
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