How Offshoring May Eradicate Poverty

Imagine a world where poverty is eradicated.  It’s a pretty difficult exercise and one wonders if it’s possible.  We believe poverty will at least be substantially reduced.

You’d be amazed as to where this poverty reduction will come from – after all most of the world lives on less than $5 a day with the wealthy few in developing countries earning a million times more than that.

Here’s how it will happen:

A hundred years ago, when you needed to buy something it was usually produced in some form or another within a hundred kilometres from your home. The bread you ate was usually made from the wheat produced in the countryside around your town. It was only the exotic that wasn’t made locally.Fast forward fifty years and all of a sudden we started buying ‘things’ made in other, faraway places. It started with cars and electronic equipment (of course you know Toyota and Sony) and pretty soon moved to fridges and clothes and almost every other consumable possible.Slowly the wealth trickled down to the developing countries manufacturing these things and they became first world, or close to it. Take Japan.  Never in the history of mankind has such a miracle happened. The improving living standards and general health of the population rose exceptionally fast.

‘Yeah yeah’ I hear you say, ‘it’s the flat world theory.’  I agree, it is.  This time it’s not the same though. This time the ‘product’ can be transported at the speed of light and get to the customer instantaneously. There are no costs of transport or logistics to be worked through. Delivery is via cable and Skype.  The transformation of manufacturing into a global phenomenon is now hitting services.  And services are what our economies are all about. Production of physical goods is already done in the most cost effective way with cars made in Japan, clothes in China, electronics in Korea, high tech in the US and smart industrial in Italy.

Now service activities are done around the world by the best possible person, at the most competitive price. Take any form of work done in front of a computer, anything at all, and I guarantee that someone on the other side of the world can do it.  Definitely cheaper.  Maybe faster and better too.

How does this eradicate poverty? If you consider the waste economy we have in developed countries, there is plenty we can share. As companies and governments take advantage of global talent to provide work/services/outcomes they are transferring billions of dollars to developing countries and people that are doing the work there.  In India prices increase as more and more work is sent there. Professionals in these countries get better paid work and every one of them supports another local worker until…… poverty is gone – or at least substantially reduced.

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[author][author_image timthumb=’on’][/author_image] [author_info]Brendon is a driven business owner who looks for his teams to consistently delight their customers. He has started and developed a number of businesses that help companies and individuals get to grips with the global marketplace and the opportunities that come from a connected world.[/author_info] [/author]


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