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Un-flattening the world?
June 2, 2008
Here's a sobering thought: According to this article from the Globe and Mail, skyrocketing fuel prices will lead to a reverse of the globalization movement. Yep, Friedman was wrong. The world may have been flat when he wrote his famous book, but according to the experts cited in the article, the world's getting rounder, not flatter, with companies looking to come running home after high fuel costs are prompting leaders to think low-cost country sourcing is no longer worth it.What do you think? If you are currently outsourcing to foreign nations, I want to hear from you. Is it worth it? Are the predictions correct? Are you getting out of the global game?
Posted by Sean Murphy on June 2, 2008 | Comments (2)
In response to: Un-flattening the world?
Randy Littleson commented:
It's a valid question and one that is sure to get lot's of attention. We work with a lot of companies that outsource heavily. I certainly think this is shifting people's attention to the "full" cost of outsourcing and making some rethink their strategy. But I don't see a wholesale shift and/or reversal of the globalization trend. The main reason I say that is because Friedman was very correct in stating that the world is now flat from a global competition and global markets perspective. Strategically, companies outsource/globalize for many reasons. One of them is certainly cost and we're seeing a realignment of the cost equation right now. Nobody knows where that will end. But another strategic reason for globalization is the ability to reach new markets and be able to have local presence (this actually argues for more globalization since you don't want to be shipping in at exhorbitant costs when you're entering in new markets either). So, while I certainly think that some things will slow and ROI calculations will be redone, I think there's still a fundamental shift underway and companies will require global scale to compete, will need to enter global markets and will increasingly want to tap a global talent pool, so globalization is not going away.
In response to: Un-flattening the world?
Dave Snyder / Federal Rack commented:
Nothing stays the same. Whether it is business, or just life, everything changes. If you began to think that outsourced solutions will be the end all you are mistaken. Sourcing strategies will change, and those that recognize this and take advantage of these changes will be the best suited to take advantage of the next business cycle.