Offshoring is Not Good for Economic Development

I am really tired of hearing economists, business executives, policy makers, and even some economic developers, defend offshoring as a "good" thing. Take a look at this Newhouse News Service article and tell me that offshoring is not the single biggest threat to economic development that we have faced in a long time.

Earlier this week I suggested that we find a way to index prosperity to productivity and innovation growth. I am more convinced than ever that we need to move in that direction.

What am I saying? I'm saying that we need to take the triple bottom line more seriously than we ever have. It's a game with many companies. They don't take it seriously enough. Here is one way to go. Companies should be required by the SEC and IRS to meet certain prosperity measures (growth in U.S. employment and payroll) to qualify for certain securities transactions and tax deductions and credits. In short, a company is allowed greater tax benefits if it grows its employment and payroll bases in the United States, and just the opposite occurs when they offshore their business and jobs at the expense of U.S. jobs and prosperity.

In addition, state and local governments should be forbidden to give economic development incentives, tax exemptions, and tax credits to any business (domestic and international) that fails to meet the federal performance measures I've described above.

And we should urge other nations to do the same with their businesses. If they don't, then they should lose certain trade privileges in the U.S. market. Guess what? The right balance among productivity, innovation, and prosperity will be achieved.

This is a big step, but that is what it is going to take.

Your thoughts are welcome. I'm looking for a solution here before this situation reaches the point of no return.