standards are respected and products have a very high level of quality. Cost-wise, onshore manufacturing has started becoming competitive again, due to wages rising in the offshore markets and a higher cost of transportation. Here and there the jobs are coming back. It’s a start, and a weak one at best, but it’s a start.”
“The one thing I see as a positive in all this,” Steve said, “is the overall benefit that offshoring brings to those markets, to the people living there. I remember reading that offshoring has extended the life expectancy in those areas and has improved the health and mortality rates in those populations. Do you think this is what drives America’s commitment to globalization?”
“In my entire business career, sitting in countless board meetings, I promise you I have never heard someone say, ‘Let’s outsource our manufacturing to China because people are dying or starving.’ Instead I have heard numerous times how outsourcing saves the corporation money and how much, all demonstrated in colorful charts and plump cash-flow forecasts. For corporations this is a cost-driven decision. However, you do have a point, Steve, and I agree with it. It is important that we actively work, as a nation, to improve the standard of living in other countries, but not beyond the point where we stop being able to maintain our own. If we continue to do that, we will soon lose the ability to help anyone, including ourselves. However, we can improve the standard of living in those areas in many different ways. We could share knowledge, innovation, healthcare advances, and best practices. We could make targeted infusions of capital and investment into the local economies.”
“What do you think will happen, long term, with our economy?” Alex asked.
“It’s hard to say. A lot is riding on who’s going to win the election. The Republican presidential candidate, Krassner, seems to have a good grasp of what could be done to stimulate the recovery of our standard of living. There are many things that could be done, by the government and by the consumers. The government, if they decide to take this path, could deploy taxes and duties to prevent the labor drain. They could also give tax incentives to create homegrown expertise. You see, part of the problem is that now, after more than thirty years of offshoring, you can’t even find skilled manufacturing workers anymore. People have abandoned this career path due to obvious reasons.” Brian paused a little, scratching his head. “As for the consumers, well, we’d have to decide that it might be worth it for everyone if we buy less quantities but higher quality products. Germany has such a culture, for example. People there do not buy seven pots and pans at a time; they only buy one when they need it. If the product is imported from outside the European Union, that product carries a significant amount of customs duty tax that the government uses to fund development programs for the German workforce. In Germany and other places, offshoring funds their labor development, not ruins it, because it carries significant levels of tax. By having such a high tax applied to any outsourced work, offshoring also loses its low cost appeal and stops being the Holy Grail of all corporations. It’s not worth pursuing anymore, so companies become invested in the local communities. In Germany, unemployment is low, GDP is high, and they don’t have that much debt, either. So yes, there are ways to fix our economy; it just needs to become a priority for our political leaders.”
“So, going back to our unofficial client, DCBI, offshoring these two contracts was a cost-driven decision, I understand?” Alex asked.
“Robert Wilton’s team uses a points system to award contracts, with cost being a key component of their scale. They also look at the financial health of the vendor company, their experience, their clientele, their processes, quality standards, and many other aspects, but cost has a high impact in their scoring.”
“I remember he said he didn’t have to do anything to promote the selected vendor, that they surfaced as a prime candidate on the points system without his help,” Alex said. “That means the vendor is pretty good, right?”
“Yes, that’s precisely what that means,” Brian confirmed. “The fact that the UNSUB decided to execute such an elaborate plan to ensure they will be awarded the software contract speaks to their determination and preparedness. It also speaks to their reach; they knew everything about their competitors, and they