Will offshoring harm Western service economies?
"Restoring American Competitiveness" is an article from Gary Pisano and Willy Shih in the juli/august issue of Harvard Business Review. The article points out that, against the general consensus, American companies will be unable to develop the next generation high tech products due to underestimating the impact of sending their manufacturing offshore. If this is true, can similar effects be expected for the service industry? In other words: will Western countries not only have to fight an uphill battle in manufacturing, but soon also in services? The article in HBR uses the value chain of personal computers and laptops as an example. Where American companies like HP, Dell and Compaq outsourced initially only their manufacturing to low cost offshore destinations, is now almost the whole industry based in Asia. Every laptop sold by an American brand, with the exception of Apple, is today designed, developed and manufactured outside the U.S.. The same applies to most phones a...