Prophecies by many economists abound regarding the ultimate outcomes of the expanding growth of imported services from the world economy, primarily in the labor sector of the auxiliary industries.
The service industries are sectors that provide other industries such as transportation, marketing, finance and insurance with the know-how and support crucial for them to conduct their business in the global marketplace.
As the support area produces, processes and markets information, its importance continues to increase. The wealthier a country becomes, the greater the proportion of support solutions needed relative to others and the greater the employment opportunities there will be in other parts of the world to support these activities.
By examining the rapid growth of import services, some economists believe that the support sector could soon surpass the manufacturing sectors in volume and overall value.
The ability to deliver products over cable or the web has removed traditional constraints around the growth of commerce in products constrained by the need for physical proximity. What would stop importing companies from expanding on a scale that could produce tremendous results in the global economy? Let’s start by taking a closer look at some of the key drivers:
• Technological Innovation – These improvements include the digitization of business technologies, the spread of PC skills, broadband Internet access, and so on.
• Lower Labor Costs Abroad – The majority of trading practitioners are fully aware of the idea of cheaper offshoring. Lower income equals greater savings. In addition, when you import companies to another region, you usually don’t have to worry about the moral factor of employee relations. Outsourcing services also gives you much more time to focus on the more important competencies of your business, including product improvement, marketing and advertising, rather than the service factor.
• Expanding capacities around the world – Today, developing countries like Korea are working to “grow” their service industries as much as their manufacturing sectors. Nations around the world have observed India’s proficiency in dealing with global computer software exports and it has enabled tremendous growth in services.
• Global Business Culture – The convergence of corporate cultures includes the adoption of English as the global corporate language, the spread of traditional Western management principles, and so on.
• Global macroeconomic liberalization – The elimination of trade barriers will lower transaction costs, further increase trade volumes and enable far more countries than ever before to engage in international trade and investment.
The reasons many business owners choose to import services are not effectively recognized by many business leaders. In fact, the issue of importing services abroad is generally hotly contested and debated.
Many people fret about outsourcing, which occurs primarily because it takes jobs away from hard-working men and women in domestic industries. Instead, the service jobs go overseas to those willing to work for a reduced salary.
In fact, most of us have observed reports of major companies moving telephone call centers and basic business functions such as software development, payroll and billing to other countries. Also, at a basic level, most of us understand the powerful explanations behind these kinds of advances.
For the consumer calling to resolve a dispute about an entry on their monthly credit card statement, it makes no difference whether the call center professional is in Bangalore or New York or not. If it’s cheaper to hire that agent in China than in New York, and if that foreign individual is able to effectively handle the dispute, then there’s an incredible likelihood that that support job will go abroad.