Don't ship jobs overseas?
Of course, I've heard it before. Am now hearing it again. But then the disbelief at what's being said is intact. Note what Obama said in his address to Congress, 'We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.'
I am surprised that the American President can't get it. That shipping jobs overseas is done so as to capitalise on the efficiencies that flow out of the concept of 'location economies'. That value chain activities must be performed at that location where its most efficient. If that means shipping value chain activities to India. so be it. It ends up making that business firm more efficient. The reverse, that is, keeping the activity in the US only renders the value chain inefficient, and that's a no-no when it comes to the buyer. 'Cos the buyer out there is not willing to pay for those inefficiencies.
Sure. its great rhetoric for Obama. But then, isn't it time to drop it, now that he's in the White House? Isn't it time to embrace fundamentals principles of business and get on with it? I am surprised that there are Americans even now, who are still mesmerised by Obama's empty rhetoric. Pity!
I am surprised that the American President can't get it. That shipping jobs overseas is done so as to capitalise on the efficiencies that flow out of the concept of 'location economies'. That value chain activities must be performed at that location where its most efficient. If that means shipping value chain activities to India. so be it. It ends up making that business firm more efficient. The reverse, that is, keeping the activity in the US only renders the value chain inefficient, and that's a no-no when it comes to the buyer. 'Cos the buyer out there is not willing to pay for those inefficiencies.
Sure. its great rhetoric for Obama. But then, isn't it time to drop it, now that he's in the White House? Isn't it time to embrace fundamentals principles of business and get on with it? I am surprised that there are Americans even now, who are still mesmerised by Obama's empty rhetoric. Pity!
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