Manzella says "offshoring created 90,000 new IT jobs in the United States. in 2003". American companies have become more profitable and globally competitive because of low cost labor from overseas. Two-thirds of the economic benefits, such as monetary savings generated from hiring employees overseas are reinvested. It is not all about cheap labor.
While low skilled jobs are often sent overseas, professionals will be in great demand over the next decade. There will be a need for architects, accountants, commercial/industrial designers and paralegals by as much as 29%. Even low end jobs such as customer service representatives will increase by 24% by 2012. As North American companies pursue the global market in an effort to make a profit, they have to focus on product design, branding strategies, productivity and respond to customers' needs. (Francis-Smith, 2005).
Globalization represents a commitment and desire to create a better future. It conveys optimism, and offers endless possibilities for growth, renewal, and revitalization for every all involved. It brings a sense of connectivity, interdependence, and integration in the global community. Extending benefits and responsibilities on a global scale, it provides commonalities without overlooking differences. Globalization gives a company the ability to conduct business across borders in an open market, maximizing organizational benefits without causing social damage by violating the human rights of other cultures (Ali, 2001).
The United Parcel Service (UPS) has seen global profits. The company has taken advantage of globalization with its purchase of the British carrier Lynx Express for $96.5 million and has established domestic services in China. As a result, last year UPS's net profit of $986 million has shown strength in all phases of the company's expanding empire. It is not only UPS but numerous American companies are able to reap huge profits due to the enormous cost savings. Companies can save by reducing their capital investment requirements, lowering the cost of parts and components, thereby achieving unprecedented economies of scales, and benefit from government incentives (Stalk, 2004).
Providing the most saving, labor costs, contributes to about 60% of the total cost advantage. For example, a worker in the United States normally cost $15 to $30 per hour while a worker in China earns less than a $1 per hour. What a savings! An English speaking Indian employee typically costs 50%-60% less than the United States employee. An accountant in the United States might cost a business $26 to $30 per hour while a qualified accountant would only cost $10-$12 per hour in India.
Low capital investment cost account for a 25% cost advantage. Though not much, every cent saved increases a company's profits. For instance, the costs to build and provide equipment for a factory in China would be much less than in the U.S. Reported savings are as much as 60%-70% because to build a factory in the United States would cost $50 million while in a low cost country it would only cost $15-$20 million. Such savings gives a company the ability to recover its investment quicker, and increase its capability for growth.
Product design is another source