Stiff penalties imposed by the United States government to prevent offshoring may damage the American economy, just when the American economy needs support. The United States government should not impose stiff penalties, on companies for offshoring, to protect American jobs. .
Pros of Outsourcing.
A energetic American economy can only be achieved by participating actively in the international economy. If the United States enacts protectionist laws against offshoring, other countries will pass similar laws and the American economy will suffer. .
Outsourcing has given American companies greater cost competitiveness. It makes financial sense to manufacture in countries where salaries for low skill workers are low. .
Offshoring allows businesses to focus on core skills and to expand production. Business can contract with overseas manufactures without sinking their capital into a new factory. Contracting the manufacturing process with an experienced partner can speed up the production of new items, while leaving the business with cash to invest in marketing. In addition, businesses can contract with a firm that has expertise in the manufacturing process. .
Also, offshoring permits individual businesses to build bridges, to make international contacts and thus to expand their markets . When businesses outsource, they can develop networks in new countries. These new networks provide the business access to new markets.
Outsourcing the manufacturing process also enables businesses to take full advantage of the economies of scale. Outsourcing production to an offshore manufacturer, which can keep factories working full-time 24 hours a day by producing goods for a variety of businesses, can significantly reduce costs, especially if the manufacturer is located in a low wage country. Businesses producing only their own goods frequently waste money on inactive production lines. .
Outsourcing and manufacturing provide businesses with many benefits include:.
