For American companies, a big incentive of outsourcing is that exporting labor-intensive jobs abroad may help American companies grow, thus creating better paying jobs. For Japanese companies, which have not started outsourcing until recent years, the rationale behind Japanese outsourcing is slightly different than that of Americans’. They not only want to cut spending but create new workforce elsewhere. Japanese companies realized that information is so specialized now that they can no longer do everything they need to do, so they have to go outside to another source. In the example of this article, they found a source in India. At the same time, it is not a secret that Japan is outsourcing auto industry, in the form of foreign direct investment, in the United States. Such “insourcing” to the United States is increasingly regarded as a source of new jobs, production, and exports.
The whole story suggests that free trade is not the one-way street that critics make it out to be. When Japan started outsourcing in India and the United States, many more jobs were created and insourced jobs tended to be technology-based, higher paying, and more stable than the ones moving out of the country. A bold statement is that were it not for foreign companies buying American companies, many of those jobs would have vanished. Rather than spending time worrying about the debate over the global ebbs and flows of jobs and money, companies are more interested in training new workers, meeting the booming demand for new business, and preparing for market expansion. We cannot expect a business man to try to make both ends meet like politicians do.
