Offshoring: Understanding the Emerging Global Labor Market (Mckinsey Global Institute) [Hardcover]

Diana Farrell (Editor)

Book Description

Series: Mckinsey Global Institute | Publication Date: December 19, 2006

This book provides an authoritative perspective on offshoring from McKinsey & Company. Offshoring is an evolving issue full of minefields and new developments. It is a business tool and an economic phenomenon with significant potential to increase the world's wealth. But it also changes the structural dynamic of companies that employ it and increases the pace of change in the societies that it affects. These issues all need to be carefully managed if the economic benefits from offshoring are to translate into net gains in developed and emerging markets. This anthology aims to help decision makers manage offshoring better. Over the past four years, the McKinsey Global Institute (MGI) has been studying offshoring intensively. The goal of this anthology is to give decision-makers and shapers in government and business a better understanding of the scope and economics of offshoring as well as its effects, so they can test their opinions against facts, and plan more strategically. This volume presents what McKinsey considers their most substantial contributions to the offshoring debate, including ten of MGI's published articles on the topic.

Editorial Reviews

About the Author

Diana Farrell is the director of the McKinsey Global Institute (MGI), McKinsey & Company's internal economics think tank.

Product Details

• Hardcover: 180 pages
• Publisher: Harvard Business Review Press (December 19, 2006)
• Language: English
• ISBN-10: 1422110079
• ISBN-13: 978-1422110072
• Product Dimensions: 9.5 x 6.4 x 0.8 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 2.5 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #1,477,376 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

2 of 2 people found the following review helpful:

1.0 out of 5 stars Disappointing, March 22, 2007

By 

MJM "Book Fanatic" (Kansas) - See all my reviews
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This review is from: Offshoring: Understanding the Emerging Global Labor Market (Mckinsey Global Institute) (Hardcover)

I am very disappointed in this book. The information presented here is no different than the other 100 offshoring books on the market. Same stuff different author. I would not recommend this book unless it is your first offshoring purchase. If it is your first purchase don't waste your money with the other 100 books available.

4.0 out of 5 stars The pro-offshoring point of view..., December 23, 2006

By 

Thomas Duff "Duffbert" (Portland, OR United States) - See all my reviews
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This review is from: Offshoring: Understanding the Emerging Global Labor Market (Mckinsey Global Institute) (Hardcover)

Offshoring (outsourcing to a different country for lower priced labor) is one of the more contentious issues confronting Americans these days. In the book Offshoring: Understanding the Emerging Global Labor Market by Diana Farrell, the view is taken that offshoring has far more positives for the economy than negatives. But try telling that to the displaced worker...

Contents: Understanding offshoring; Sizing the emerging global labor market; Ensuring India's offshoring future; China's looming talent shortage; Who wins in offshoring?; The truth about foreign direct investment in emerging markets; Offshoring and beyond; Smarter offshoring; US offshoring - rethinking the response; How France and Germany can benefit from offshoring; Governing globalization; Index; About the Authors

This book is a compilation of articles from the McKinsey Global Institute, a think tank committed to examining global economic issues. With that as their background, it's quite easy to tell that their bias isn't towards the individual, but towards countries and corporations. The main thrust is that for each dollar spent on offshoring, the economy recovers that dollar and more in terms of increased activity and spending by the developing country. In addition, the labor pool in developing countries is far from limitless, and is constrained by a number of cultural and language issues which make for a mismatch as an offshore resource. The main offshore players, such as India, also have to be careful as to managing their overall position. Overdevelopment in a few key cities is causing labor shortages and wage pressures there, which in turn make them vulnerable to other offshoring options. In other words, there are no locked-in advantages for any of the players. If a company is considering offshoring part of their workforce, there are things to keep in mind in order to minimize the risk and maximize their return.

On one hand, I thought the book was well-written from the particular perspective of the authors. It's difficult to be "pro-offshoring" without incurring the wrath of significant portions of the population. On the other hand, I felt as if the individual got overlooked in their analysis. The statistics are used in such a broad way as to ignore reality. For instance, "from 1979 to 1999, 69 percent of US workers who lost their jobs as a result of trade in sectors other than manufacturing found new work within half a year. On average, they received similar wages in their new jobs (though roughly half took pay cuts)." So the reality is that 30% of workers (and let's not dwell on those in manufacturing) were still unemployed after six months, and of the 70% that *did* find other jobs, half had a lower standard of living. It's a good thing offshoring will allow for cheaper prices... we're going to need them to make our lower paychecks stretch further. The authors do advocate for far better transition benefits for displaced workers that what is normally seen. Commendable, but companies looking to cut their bottom line don't often have that level of concern for their "resources".

This is worth reading so as to get both sides of the offshoring story. As an individual, just don't expect it to necessarily be *your* side of the issue.