Is cheaper technology and labor costs changing the global dynamic for better or worse?

In the article Are Dell’s Cost-Cutting Measures Taking Austin From Boomtown To Bust? Tom Douglas discusses how Dell's decision to outsource and remodel its manufacturing streams has adversely impacted on Austin, Texas. Is this the case for other cities in countries across the Western World where major technology manufacturers and suppliers have upped sticks and setup shop in more emerging economic climates? And if so, how does this affect you as an individual with a rat race to run, bills to pay, mouths to feed?

Now more than ever places such as India, Brazil and China are becoming global power brokers, offering cheaper labor and service costs. But what makes such developments a major cause for concern is the fact that now technology is so much cheaper, easier to design and optimized for smooth operability. As such we are truly in a position where technology (along with cheap workforce) will change global dynamics for ever. I won't say this is good or bad, that is personal opinion, but what is fact is that we are going to need to embrace this, otherwise the dynamics of technology and mankind will be too complicated to even comprehend.

This is a pretty broad discussion topic, and from the looks of things has potential to be extremely political.  Dell isn't the first company to outsource, and they won't be the last.  Corporations are always looking for ways to maximize profit by saving money.  If a labour force outside of your country offers to produce items at the same productivity as they would in your homeland at a considerably lower rate, why not take it?  This looks more or less like it's a question of morality.

If a lot of people have morality issues, I'd say they should look into where they purchase technology and see where it was manufactured.  Places, such as TigerDirect, do not outsource.  It makes me wonder how many other retailers out there are the same.

Retailers will continue to chase their tail looking for the most cost effective way to mass produce products and deliver 24hr support. It is the way of the globalized capitalist world. It may appear to be unethical, even inhumane to us in the Western world but it provides employment and stability to many hundreds of millions in emerging countries and boosts emerging markets. If we have issues with working standards and ethical business practice, not to mention concerns about the dynamic of the world remaining balanced then we need to look at why companies are making such moves and provide them with incentives not to 'emigrate their services'. Having said that the current down turn and credit crunch isn't helping what-so-ever.

It strikes me as ironic that people object to a company outsourcing overseas when that company derives a considerable amount of its profits from overseas sales (and people do indeed object - according to a recent survey, more than 60% of Americans would like to see corporations such as Dell hit with additional tax bill or some other form of sanction). If a company isn't permitted to outsource to other countries, then why should those countries permit the sale of that company's products?

A country which attempted to block international free trade would be committing economic suicide. Should sanctions be imposed on a company which outsources, that company will simply cease to be internationally competitive (and may even be forced to relocate to a less dictatorial jurisdiction).

Matt stated, "If a lot of people have morality issues, I'd say they should look into where they purchase technology and see where it was manufactured.  Places, such as TigerDirect, do not outsource." Hmmm. I don't know whether or not TigerDirect outsource, but most of their stock is manufactured by overseas companies! People don't really care where a product is made; the majority of purchasing decisions are made on the basis of quality and price - which is why there are more Toyotas than Fords on US roads!

Furthemore, offshoring isn't only about cutting costs. Companies outsource abroad for the same reason that they recruit from abroad: to obtain access to qualified personnel (and, I must say, that based on my experinces with Dell, this is something of which they are sorely in need!).

The fact is that increased global outsourcing is an absolute inevitability. Countries and companies that embrace it will benefit; those that resist it will suffer.