Danger of outsourcing: Why industry started outsourcing, what are results and consequences of outsourcing, how to prevent risks of outsourcing

Why industry started outsourcing

Industries and small business alike started outsourcing difficult task, dangerous work and boring or low quality jobs to grow faster. Growth in the mind of many is a measure of success. To make as fast and as easily the largest business volume and more importantly largest possible net profits was and in the mind of many still is a prime goal in business.

Industries of "first world nations" outsourced and exported industry waste, chemical waste disposal as well as mass production into cheap labor countries. Cheap labor countries usually are contries with corrupt government, corrupt leadership and corrupt industry CEOs and a deal was easy to make to obtain permissions to enter outsourcing agreements for all kinds of stuff as long as the amount of money was right.

Danger of outsourcing

The key danger of outsourcing is that the original company fails to progress and evolve in all important aspects of business. The "mother-company" focus on profit making, while the outsource partners focus on actual production and thus also on improving production quality and production procedures to keep up with global needs and requirements of a progressing market.

Outsourcing partner often achieved their success at the expense of labor security, work environment quality and above all on heavy underpay of poorest and needy ones. For a money oriented industry it is easy to find or create government partners who agree on low or lowest payments. In some countries labor law and minimum wage law applicable for "Economic Zone" often have wages below national minimum wages or "Economic Zone" have NO fixed minimum wages at all. Thus leaving all up to negotiation and / or corruption / bribery success.

Depending on poverty and depending on corrupt system is a weak basis for a lasting industry scheduled to prosper and to evolve in a purely humanitarian way for the mutual benefit of all society, all planet including all nature!

What are results and consequences of outsourcing

In direct relationship to the ongoing auto industry bail out negotiations in USA there have been repeated news comments about the danger of having ONE car accessory supplier going bankrupt. It appears that US and Asian auto industry use some mutual accessory suppliers. Hence they both used same outsourcing partners. If one such outsourcing partner should go bankrupt, according to such industry news, the entire auto industry in US AND other countries including car manufacturers who otherwise would have no problems or manageable problems may go into an even greater crisis.

Hence a prime danger or consequence of outsourcing is that a mega company's survival and millions of jobs suddenly may depend on remote outsourcing partners or countries. Hence an otherwise healthy industry may go into crisis or go completely broke as a result of self created dependencies in remote low wage countries.

The original reason for outsourcing partially also was the lack of readiness among local work force to work for affordable wages. Wages affordable for local and international customers of a particular product or service. Hence many "first world" countries and countrymen felt too good, too qualified to do ALL the work needed for a national success.

Conclusion on outsourcing

At first and for a few years or decades - outsourcing brought some additional net profits into the pockets of a few CEOs and investors / shareholders as well as higher wages for local employees of that outsourcing industry.

On the long run however those countries have to bailout by Trillions of US dollars the ailing industries. Millions of highly paid / overpaid workers now loose their overpaid jobs as a result of earlier refusal to do whatever job was needed for whatever wage the local consumer was able and willing to pay.

Calculate additional easy profits resulting from outsourcing vs the global bail out amounts and further global consequences in our ongoing economy crisis. Most likely our outsourcing method may prove more expensive than doing all - including dangerous, toxic and cheap work all at home. One major factor needs to be included in a.m. calculation: The total damage to our global nature, environment, jungle, climate and the long term cost to repair such already created damage during the centuries to come. We have contributed to the destruction of a planet during a few decades in exchange for short time profits and we all may have to work and heal our planet during decades and most likely centuries to come.

How to prevent risks of outsourcing

For all global economy - from our local micro economy to national or global economy, it definitely would be more beneficial to grow much slowrt in healthy small steps and in full harmony with God's creation.

When being willing to do all on your own, you will also have to deal with al waste produced on your own. This in turn creates a decision criteria that may help an entire nation to agree on a more simple, more healthy and smaller economy in peace and amidst a healthy and strong nature. The more you are willing to do all on your own within your own business no matter how small or how large, you will have to consider all negative aspects as well. Outsourcing left a backdoor to export all or at least most negative aspects to far remote countries. leaving all damage to others - until that damage bounces back during a global recession or global economy melt down. The current irresponsible way to deal with nature, to deal with our entire God created environment and to deal with health and holistic wellbeing of OTHERS definitely risks to result in a global economy meltdown. Unless we learn in months what we failed to learn in past centuries.

A global economy and industry meltdown definitely would be for the greatest possible benefit of our entire planet and thus for the true innermost health of mankind. We need organic food to live and survive and no BBQ-cars to eat. We need a healthy nature to secure our health and no chemicals to eat and poison us. All mankind could instantly live with a tiny one digit percentage of currently exisitn industry and one digit number of currently running automobiles. If we wanted to be wise, healthy and loving.

Shrink in your demands, shrink your needs and shrink your expenses and simple lifestyle to a normal size that can be sustained by you alone amidst a healthy environment created and financed by you alone. Finally we all are the sum of many single persons. Health and stability of economy and social wellbeing always starts within self. In small steps financed and done by self alone.

Love and Bliss

hans