Neal Gandhi suggests that the globalisation debate in Britain should be framed differently. We must accept globalisation and seek out ways so that the next global leaders such as Google emerge in the UK.
The offshore outsourcing industry is often accused of damaging the prospects of British workers and of taking abroad jobs that should be done in Britain, sometimes to lower standards than if the job was carried out locally. The poster child of such comments is the now ubiquitous offshore call centre with calls being answered by “Sandra” in Bangalore who just needs to check how to spell M A N C H E S T E R. Further fuel is added by banks and insurance companies that proudly proclaim on TV adverts that their call centres are in the UK, not India. The inference is clear, offshoring was a poorly conceived idea and the rapid move to embrace such activities by companies is now reversing with many jobs being repatriated to the UK. “Hooray”, shout the unions, “British jobs for British people!” The end of globalisation is here!
But is the debate really that simple? The reality is that globalisation is now with us whether we like it or not. Successful companies sell their products and services and staff their companies from across the globe. Customers, for all their jingoism, still demand the lowest cost or best value for the products and services that they consume. History is littered with patriotic companies that tried forlornly to keep their local manufacturing facility open but then ultimately failed under the relentless pressure of global competitors with better products and lower costs. Quite why what happened in the manufacturing sector should not also follow in the services or other sectors is a question worth asking.
Of course many of those countries where jobs are currently migrating to are in their own right becoming major markets. Apparently 100,000 British jobs are dependent on Airbus’ success, yet the fastest growing aviation markets in the world are China and India. India has the fastest growing mobile phone market with seven million new handsets being sold every month. It’s not hard to imagine that many people are gainfully employed at Vodafone’s headquarters in Newbury thinking hard about how to increase their company’s market share in India. So if a company moves a services job to India and in doing so assists in creating a new middle-class of consumer for mobile phones and domestic flights, do they actually create a new higher skilled job in Newbury or Bridgend?
The question really is why Britain does not have many companies that are true global leaders in their field? Could an island nation’s desire to try and stick within our own shores actually be the problem? Is the UK market just big enough to sustain reasonably large companies such that there is no real need to explore new horizons? Helsinki is the most unlikely place to create Nokia, the largest mobile phone handset maker in the world, but maybe the narrow confines of the small domestic Finnish market forced their business leaders to look elsewhere for growth opportunities? Is it unrealistic to hope that British companies can be the global number one or number two in every sector of the FTSE listing, and if so, why? If our companies were true leaders, we would not have the question about British jobs, instead we would all be enjoying the spoils of being in a country with high GDP growth punching significantly above its weight.
The focus of the debate should be how we go about creating future global leaders right here in the UK, and step one is to assist those future leaders to understand that globalisation is the opportunity rather than the threat. Historically, leading companies have used their home advantage to achieve scale first before expanding internationally in search of new opportunity. Naturally, this favours companies with large domestic markets. A hundred years ago, British companies were the beneficiaries of the domestic market that was the Empire, since then American companies have used their own domestic scale to expand. In the 21st Century though, leaders can emerge from anywhere in the world. Fuelled by worldwide sales and staffed by a distributed workforce, these globally leveraged companies will embrace the best the world has to offer and will outgun any domestically constrained competitor. Government’s role is to educate both business and the population more broadly that UK companies embracing globalisation are to be congratulated and encouraged.
Technology has a role to play here. Today, it is more than possible to cost effectively establish a network that delivers near LAN speeds across the world. In lay mans terms, this means I can use my PC in India to connect to my SAP or Oracle system in the UK with no performance limitations. This in turn means that information security can be assured as the data never leaves the UK but more importantly, it means that companies are no longer limited by geography. Why have your highly skilled management accountants sitting in expensive office space in London doing routine accounting tasks or mundane analysis work? Or the bulk of your internal IT development being done by UK based staff who are better equipped to do the high value add business analysis work instead? Or your graphic production work carried out by highly creative artists that resent doing dull production work anyway?
And when a company is truly globally leveraged with the right people doing the right work in the right place and at the right cost, they are then in optimal shape to take on any global competitor. From this foundation are great companies created in the 21st Century.
So in conclusion, far from offshoring taking British jobs, offshoring is the enabler to create many more higher value British jobs as globally leveraged companies become world leaders in their field. For definitive proof, look no further than Google. From Trondheim in Norway to Bangalore in India, Google has scoured the globe looking for the best talent to enable them to maximise their competitive edge yet thousands of people are employed in their head office in California. Our job is to make sure the next “Google” comes out of the UK.
