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Saturday, July 10, 2004

Implored to 'Offshore' More via Washingtonpost

report by an influential consulting firm is exhorting U.S. companies to speed up "offshoring" operations to China and India, including high-powered functions such as research and development.In blunt terms, the report by the Boston Consulting Group warns American firms that they risk extinction if they hesitate in shifting facilities to countries with low costs. That is partly because the potential savings are so vast, but the report also cites a view among U.S. executives that the quality of American workers is deteriorating."The largest competitive advantage will lie with those companies that move soonest," the report states. "Companies that wait will be caught in a vicious cycle of uncompetitive costs, lost business, underutilized capacity, and the irreversible destruction of value." This article is related to the BCG report on offshoring BCG report on offshoring. One of the author of the report - Harold L. Sirkin says,Offshoring production will mean that American companies lower their costs and raise their productivity, and although some jobs will be lost in the process, pouring the surplus money and workers into new industries means "you'll create jobs you wouldn't have otherwise," he said. Trying to fight the trend, and preserve jobs by making it difficult for firms to lay off workers, "means you become a zero growth economy," with fewer jobs in the long run, he added.

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