According to a new study from the McKinsey Global Institute, every dollar of corporate spending shifted offshore by an American firm--mostly, now, to India--generates $1.13 in new wealth for America's economy.Counterintuitive? You bet. But quite believable, considering how extensively our economy is tied to other countries' economies. In fact, because we're so intertwined our offshoring produces net gains while the offshoring of less-global nations (Germany was the comparison) produces net losses.
...America's economy is more likely to benefit from all those Indian body-shops buying American products, ranging from Dell computers to the Coca-Cola that fuels programmers' late nights. German products are less enticing. And American shareholders are more likely than German investors to have a stake in an Indian offshoring company, further increasing America's gains.The biggest kicker, the thing that keeps the U.S. competitive even in the face of offshoring displacement, according to the study, is the fluidity of our job market. As hard as it is to be displaced, people do find new jobs. I see it reflected in my own experience: the current job, my previous job, and the job I had before that did not exist as positions until my being hired. And as for the two previous positions, since I left them they have since changed drastically (if indeed they exist at all anymore).
It's a great argument against adding yet more regulation to our economy, as some pols would try. We really don't want to emulate Germany in any way (though some pols, oddly, would like us to be more like France).