Thomas Friedman: Why Outsourcing is Here is to Stay

If you’ve been following the previous posts in my economics of outsourcing series, I hope you see that thanks to Coase, Solow and their colleagues, outsourcing is now a major part of the business and economic landscape. However, it has been popularized, debated and indeed lionized in the mainstream press by Thomas Friedman.

His major bestseller, The World is Flat: A Brief History of the Twenty-First Century (first released in 2005 and updated twice since then) stresses the importance of technology and outsourcing as major elements of modern global economic structure.

The book describes 10 “flatteners” that have leveled the global playing field. The rise of outsourcing and related activities such as offshoring and supply chain networks figure prominently on that list.

Friedman says outsourcing has allowed companies to split service and manufacturing activities into components that are subcontracted and performed efficiently on a global scale.

The ease of offshoring today – ahem, if contracted correctly using cooperative, mutually beneficial Vested Outsourcing principles! – means that a company can locate manufacturing and other processes to a foreign locale to take advantage of less-costly labor and operations.

The emergence of sophisticated supply chain networks and the role of technology is another flattener, according to Friedman, because companies can now use the Internet, sophisticated software (including workflow programs and open source software) to coordinate and streamline items such as sales, distribution, shipping and risk management in real time.

Workflow software protocols in particular have become so prevalent in our business lives that they are helping to create the foundation of a new global platform for collaboration, Friedman says. With open source software large communities can upload and collaborate on projects in the “cloud,” so to speak from anywhere in the world with nothing more than computer access and a decent Internet connection.

This blog is a great example, in my opinion, of collaboration to get the Vested Outsourcing’s basic message out there: The necessity to collaborate in an aggressive and cooperative manner so that everyone benefits.

The world is getting flatter all the time and it took someone like Friedman to make us see this reality in its full context. As Friedman shows us, outsourcing has become hugely important in the economic and business scheme of things. So it’s important to do your outsourcing right.

If you haven’t heard, outsourcing can be good for your company’s health; it‘s here to stay. And if you lay a solid foundation by incorporating the Five Rules of Vested Outsourcing, you’ll find that any Vested Outsourcing relationship “flourishes best in a culture in which participants work together to ensure their mutual success.”

Vested Outsourcing’s Five Rules will get you there.

Comments

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