Are we missing a trick? Last week saw the US approving legislation to bring jobs back to America that had previously been outsourced to lower-cost economies. The measure is aimed at reducing America’s 9% unemployment, and with the economic case for outsourcing no longer as compelling as it was 10 years ago this seems like a good idea.
This begs the question – should we be doing more to repatriate jobs to the UK, to tackle our own unemployment?
Bringing jobs back to America
Congressman Frank Wolf reports that “legislation approved yesterday in both the House and Senate requires the Commerce Department to immediately set up a task force to examine what needs to be done to encourage U.S. companies to bring their manufacturing and research and development activities back to America’s shores. ”
“The department also must develop a list of “best practices” for states and communities to follow to help foster the repatriation of jobs that have moved abroad.”
Is this not happening already in the UK?
“Small manufactures are considering shifting production back from the Far East to the UK to save money and provide a better service to customers” according to the Telegraph.
Speaking recently to the owner of a Sussex-based electronics company, he agreed, saying that part of the recovery in his order book has been down to his customers bringing work back from China and India.
And this is happening in other sectors as well. To improve customer satisfaction, Santander had just brought its call centre back to the UK, and two years ago BT repatriated 2,000 call centre jobs.
Why is the repatriation of jobs such a good idea?
- with labour costs going up, the lower-cost economies are less competitive;
- transport costs have gone up with the price of oil;
- political instabilities are increasing the supply chain risk; and
- there are serious concerns about the environmental sustainability of an economic model that relies so heavily on transporting goods globally, etc.
Add these to the well-known issues surrounding the protection of intellectual property, and the consequences of goods being at sea for several months – inventory cost, on-time delivery, lack of flexibility for products that are configured to order – there seems to be a good case for in-sourcing back to the UK to create jobs for unskilled and semi-skilled employees right through to science and engineering graduates.
But so far I have not been able to trace any UK government initiative on the repatriation of jobs: feel free to post a comment if you can shed some light on it.
Posted by Peter Johnson, Business Advisor with SGBA. Call Peter on 07714 093406 or email him at email@example.com if you would to talk to someone about your business.