Outsourcing Could Endanger National Security
In yet another sign that outsourcing doesn’t pay, a new report claims that moving technology jobs to overseas markets could actually put America in danger.
According to Fox News, a report set to be released soon claims that the outsourcing of the design and maintenance of computer technology could endanger national security.
The report says that the outsourcing of those services could make it easier for countries or companies to insert themselves in the supply chain and hack into crucial systems.
“The present situation is as dangerous as if the United States decided to outsource the design of bridges, electrical grids, and other physical infrastructure to the Soviet Union during the Cold War,” the report says.
The report by the Intelligence and National Security Alliance says that cyber-attacks and cyber-terrorism are much more likely to occur because of the increased outsourcing of jobs in the technology industries.
The situation is even more dire now that China has emerged as the largest market in the world for personal computers.
China’s PC sales reached $11.9 billion, while U.S. PC sales fell behind to $11.7 billion in the second quarter of the year.
While it may have been inevitable, it still poses a problem for the U.S. China is emerging as a major consumer market with a growing middle class that has newfound purchasing power, which could lead U.S. computer companies to outsource more and more jobs to the Asian market.
This report is just the latest example of the fact that outsourcing – while saving costs in the short term – does not pay in the long run.
According to a report released by Compass Management Consulting, more often than not companies overestimate the savings that will come from outsourcing production by failing to account for the loss of productivity that comes with moving production out of house.
The report found that while a company may pay approximately 40 percent less in payroll costs by moving production to a low-wage country, that move also comes with a 60 percent drop in production, on average.