Offshoring Of Routine Tasks And (DE)Industrialisation: Threat Or Opportunity - And For Whom?
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Overview: Offshoring, or overseas sourcing of routine tasks, generates efficiency gains that benefit consumers and workers with skills similar to those whose very jobs are threatened by offshoring. Essentially, the interaction between offshoring, footloose capital and agglomeration economies locks the comparative advantage of advanced nations in complex or strategic functions while labour services in 'Routine' tasks, the coordination of which is easily codified, are provided by low-wage developing nations through the fiber optic cable. In this framework, the partial-equilibrium view that offshoring is necessarily detrimental to workers in advanced nations is misguided because the implicit counterfactual - that keeping the off-shored jobs would have no macroeconomic impact on the economy - is not warranted.
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Format: PDF | Size: 312KB | Date: Mar 2007 | Pages: 26
