“The continuous globalization of the economy has pushed many enterprises to adopt international sourcing as a business model….”
Although sourcing abroad can result in the loss of domestic jobs, it can also improve an enterprise’s competitiveness, and hence both secure existing jobs and create new ones.
The importance of ODI as a phenomenon can also be seen when compared with trade flows. While trade flows have increased strongly in the period 1970 – 2004, they have been surpassed by the increase in ODI flows… (P.386)
Global ODI flows increased by 29 per cent to €916 billion in 2005, which was on the back of an increase of 27 per cent in 2004. (P.386)
Irish firms are investing more abroad than ever before….Ireland was a net investor abroad in 2004 for the first time. (P.391)
“Ireland’s experience is consistent with the investment development path theory, which predicts that ODI from successful economies will increase as their firms increasingly seek overseas markets” (P.391)
“the average Irish firm with investments abroad employed 97 workers in their Irish operations, with employment in subsidiaries outside of Ireland averaging 147. Virtually all sectors employed more workers in their overseas subsidiaries than they did in Ireland.” (P.393)
“During 2001-2006 in the 12 countries, the main motivation among the surveyed enterprises that internationally sourced services, was the ‘reduction of labour costs’.”
In 2006 for Western European nations like Ireland and the UK that was most often Eastern Europe. But what about now, now that “we’re all in this together?”
“By far the most important motive for sourcing to China and India is to cut costs”.
So we’re still busy ‘gaining efficiency’ but now we’re gaining it by off-shoring jobs to China and India. Apparently East Europeans weren’t quite poor and efficient enough.
“Numerous reports suggest that firms can make savings of between 20 to 50 per cent when they offshore in regions such as Asia (See McKinsey, 2004 and Agrawel, and Farrell, 2003). Labour costs make up a significant proportion of these savings, with large wage differentials between developed and developing countries at almost all skill levels (See Boston Consulting Group, 2005 and McKinsey, 2004).” (P.394)
- work with renewed endeavour to build employment pathways for young people
- take action to increase female participation
- to ensure that by 2010 every unemployed person is offered a job
- to work towards 25% of the long-term unemployed participating in training, retraining, work practice,
“a range of policies, including proposals aimed at education and training institutions, or measures for the creation of a (work) environment conducive to higher activity rates and higher labour productivity.”