Car industry shows hitting brakes on outsourcing is a risky business

UK and US tariffs and restrictions on offshoring will just fail...

...mechanism but it is effective. Even if American consumers buy 'foreign' cars, they are usually constructed locally.

It's just like the commentators who lament the glory days of the British automotive industry while failing to acknowledge the Japanese manufacturers that now produce cars in the UK.

Cross-border controls
Many politicians would like to see an equivalent system of tariffs to control cross-border services, so the popularity of offshore outsourcing is somehow reined back. The UK government is consulting on where to set immigration caps and the US government is proposing new charges for business visas.

All these measures are aimed at reducing the number of foreigners entering the country, even foreigners with IT skills coming to work on temporary assignments.

But I don't think the UK or US legislators will succeed in reducing the offshore outsourcing of IT in this fashion. Manufacturing tariffs have made it difficult to build cars in a cheap location and then export them for sale.

Conversely, any government tinkering with visas will just see new costs passed on to the clients. And with these administration costs hardly denting the budget of any major outsourcing programme is there really any point?

Mark Kobayashi-Hillary is the author of Who Moved my Job? and Global Services. He lectures at London South Bank University.