Monday, September 18, 2006

previous entry | main | next entry | TrackBack (0)

Damn that cheap European labor force!!

The Financial Times' Francesco Guerrera and Alan Beattie report on a new trend in offshoring:

Multinational companies are favouring Europe over Asia when expanding abroad – a sign that they want to be close to customers and suppliers rather than simply tap into cheap labour and plants, according to a new study of outward investment.

The surprising findings of the survey by IBM’s consulting arm, to be released on Monday, suggest that the recent boom in outsourcing of manufacturing and services to emerging markets such as China and India may be abating.

At the same time, western Europe, led by the UK and France, is regaining an edge in high-value areas such as research and development, putting pressure on developing economies to raise the skills and education levels of their workforce.

“The recent recovery in the global economy has made companies more interested in being close to their markets, suppliers and decision-makers rather than just looking for a low-cost base,” said Roel Spee, Europe’s leader for IBM’s global location unit.

The survey – the only study that looks at all announced foreign direct investment (FDI) by companies around the world – found that Europe attracted 39 per cent of all new plants and projects in 2005, with Asia-Pacific receiving 31 per cent and North America 18 per cent. In 2004, Europe and Asia were tied at 35 per cent each.

The results show that globalisation and the increase in capital and trade flows are enabling companies to exploit the competition between regions to reap the biggest rewards for their investments....

The UK was Europe’s biggest recipient of inward investment, especially in the research and development field, where it accounted for more than a quarter of all projects launched in the region last year, followed by France with 19 per cent.

posted by Dan on 09.18.06 at 09:01 AM


There is a cheaper, higher quality option - Israel. With American Jewish immigration to Israel (between 1000-2000 people a year) it is possible to get American work ethic and American quality at an Israeli salary. of course the potential members of that core of the workforce is very very small but an excellent value!

posted by: amechad on 09.18.06 at 09:01 AM [permalink]

Boo econ! Yay IR!

posted by: Adrian on 09.18.06 at 09:01 AM [permalink]

A strategic government can overcome a cheap labor force. Now how do we get one?

posted by: Lord on 09.18.06 at 09:01 AM [permalink]

Someday soon we too will be able to provide the world with cheap labor.

posted by: Babar on 09.18.06 at 09:01 AM [permalink]

Post a Comment:


Email Address:



Remember your info?