This in-depth examination of offshoring finds that it is to be embraced rather than feared. In the long run, it benefits not only developing countries, but also developed ones.
Offshoring: Should the West Panic?
Offshoring: Should the West Panic?
Human Resources
$140.00
The West is wary of offshoring, fearing that developing economies will benefit from this phenomenon at its own expense. However, despite fears that offshoring is bleeding the West of jobs and wages, we are actually benefiting from it. Offshoring is in fact a win–win situation for both developing and developed countries.
The West benefits because firms that offshore can increase profits, which they can then use to develop high-end, specialized products that benefit the home economy. Trade in services, like any other form of trade, makes the economic pie larger, creating new markets for the goods and services of developed countries. And rumours of job losses and the costs to Western economies have been greatly exaggerated and wrongly attributed to offshoring.
If protectionist barriers are erected or raised, retaliatory protectionism is almost assured. And Canada, which enjoys a net surplus in its goods and services trade, will be vulnerable.
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