Offshore to Advance Our "Level" of Productivity

I read an interesting article this morning in the Sydney Morning Herald (Australia). It deserves your attention. Why? Because it discusses the difference between the rate of productivity improvement and the level of productivity growth. The article talks about Australia's struggle to try to catch up to the U.S. in achieving economic growth based upon productivity.

A more important point can be drawn from this article, which is not discussed. Advancing our "level of productivity" should be the most important reason why companies use offshoring business strategies, not just to increase the rate of productivity growth.

Bingo! Sheer cost-savings by companies shifting work offshore will not help those companies for long, nor will it help our domestic economy in terms of job, income, and market growth. Labor cost-based advantages in India, China, and other developing countries will not last. Sure, it will save some companies some bucks in the short-run, but over the long haul, these companies will fall short--maybe even on their faces--unless they INNOVATE with new products and services and move on to the next generation of industries that everybody has been talking about for God knows how long.

By moving on and truly innovating, American businesses can create the next-gen industries and they can create more higher quality jobs. However, to do this, the workforce must shift with lightning speed to new skills, knowledge, and a new paradigm of work that is grounded in the concept of a "global workforce."

The question is: "Can we do it?" It's a huge risk to shove hundreds of thousands, and even millions, of jobs offshore in the next couple years. How do we survive the loss of so many jobs? Can American workers get with the new work paradigm? These are million dollar questions that must be answered quickly.

Stay tuned.

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