By Samuel Peña Guzman
Foreign Investment Coordinator
State of Nuevo Leon

The concept might be rather confusing; outsourcing consists in a company sub-contracting one of its functions from external suppliers, which many a time are foreigners. Outsourcing is a method widely used by companies in developed countries, such as the United States, in order to decrease costs and increase profits.

However, unemployment rates, on the raise at the USA, have been affecting Americans´ labor market and outsourcing has been blamed for the loss of jobs to other countries, such as Mexico.

Also, conservatives have tried to find culprits, and they include trade agreements and outsourcing itself among the reasons to be blamed for jobs´ flight abroad. On the other hand, outsourcing defenders argue that this is but a new mechanism in international trade and that fighting it would mean falling into protection devices contrary to globalization, which could eventually make them fall. Also, unemployment problem would not be solved and there could even be a risk to fall again into the paradox of providing subsidies to certain sectors against international trade policies in the world.

World competitiveness, where companies are immersed, has caused both jobs and capitals relocation to places that provide larger benefits to the companies. As a matter of fact, I see outsourcing as part of the globalization in our days and, among other things, it precisely means moving several jobs to another place, expand operations at places with a different culture and ideology and send resources to where there is low price labor and low cost abilities, which means precisely to send jobs abroad, where, in addition to the above-mentioned benefits, companies are also granted fiscal incentives encouraging foreign direct investment at prices way below their costs at their country of origin.

Industrial companies have had a significant decrease at the United States. Once again, outsourcing has been blamed for this. However, the current trend to sub-contract processes abroad is an advantage to operations. Actually, one of the main reasons to resort to outsourcing is the fact that the increase in productivity is due precisely to the expansion in information technologies implemented at every sector, including the industrial sector.

To sum-up, foreign trade policies mean trade benefits are distributed throughout the whole economy. But, as everything in life, a price must be paid; therefore, some sectors are affected by this price, and these are the sectors that express their disagreement with globalization, each and all of its elements, including outsourcing. There are certain sectors at developing countries, such as ours, which were already used to this; the best example is the maquiladora industry that has faced a strong competition from abroad. Professional service providers are those who have faced the strongest competition and no doubt are the ones who have paid the greatest price.

It is clear enough to me that globalization is considered a success only when certain sectors are favored and there is welfare at the sector; whenever there is not, the purpose is precisely to find culprits. We hope outsourcing will not become globalization´s scapegoat, because it is precisely one of the best tools to face competitiveness in the world we live today.