Since the 1700s, jobs were sent to whoever could do a task and charge the least amount of money. In the 1980s, jobs that North Americans had previously held were moving rapidly away to cheaper havens in developing countries. These countries charged less tax and wages were significantly lower. In the 2004 election, the Democrats criticized corporations following this practice, bringing the issue to light. Citizens of developed countries have been negatively affected by this practice, with many losing their jobs in order for corporations to increase their profit. In the beginning of the 21st century, outsourcing was common. Today, there is a move towards the exact opposite – bringing jobs back to developed countries. Some companies have begun to do this, but what has changed to make them bring back the jobs?
PR: Just seeing the text “Made in Canada” is enough to drive many people to choose it over another. Companies that do manufacture in Canada can easily seize this opportunity, comparing their products to their competitors’, engendering a ‘feel good’ idea for consumers who buy the product. By showing that the customers are supporting fellow citizens, they both receive more favourable press than other companies while also avoiding the pitfalls that creating products in another country entail. This boost in brand value can mean a lot for companies, especially in industries where products are almost impossible to differentiate, with other the knowledge that a customer has of a brand getting them to buy one. Though ‘brand value’ may seem like a high in the sky term, as it seems immeasurable, companies are almost constantly evaluated on their brand’s value, with numerous reports being released every year detailing who is leading.
Knowledge: North America is known for having some of the best engineering universities in the world, with these schools producing some of the best graduates that go to work for Fortune 500 companies. In Canada, many engineering universities including the Universities of Toronto and Waterloo act as direct streams to these large firms. In the past, the only problem has been the high wages charged by these graduates. Though their capabilities are much higher than an unskilled foreign labourer, their work can be divided into smaller pieces and given to numerous foreign workers. Recently, Verizon did a case study on this, telling the story of a programmer who made over $100,000 a year and paid a Chinese firm half that to do his job (See the full story here). Now, though, in some fields, the initiative and ingenuity of these trained workers is paying off. According to the American Bureau of Labour Statistics, workers in North America are twice as productive as those in Taiwan. This can be attributed to the education of the workers and the engineers who can both do a greater amount of tasks and complete tasks requiring greater complexity.
CEOs of nearly every firm in every industry were previously confident that once jobs had left developed countries, they wouldn’t be able to come back. Taking recent resurgences in productivity and patriotic sentiments into account, do you think that Canada could create a strong base from these outsourced jobs?
