- The Washington Times - Sunday, June 11, 2006

Special correspondent John Zarocostas also interviewed Brent Wilton, deputy secretary-general of the International Organization of Employers, an umbrella group for 141 national employers organizations, Wednesday in Geneva.

Q: What is the employers’ perspective on the outsourcing debate in an increasingly globalized world economy? Are as many jobs being generated by the process as the number that go to lower-cost areas?

A: Well, if you look at the evidence to date, outsourcing benefits developing countries, where a lot of that work is going.

In terms of the developed economies, we’re also seeing some job losses. But again, those job losses are not being reflected in increased unemployment. New jobs are being created for these people. So while jobs may disappear from one economy and emerge somewhere else, it doesn’t mean people who have been “outsourced” — to use that term — have lost out in the global economy.

Q: Outsourcing has become a political hot potato because of job movements to other countries from manufacturing, and now the services sector. Where do you think the new jobs will be generated in Western economies?

A: I think it’s always a challenge for economies to improve their ability to compete through innovation and new opportunities. I can’t particularly say where the new jobs will come from. But what I can say is that if you look at the job creation that is still going on in America, even though services jobs and manufacturing jobs may well be being outsourced, employment is still being created; new opportunities are being given there to people.

The trouble is, it’s unsettling, and anything unsettling is difficult to deal with, and we have to make sure that we do deal with it in a measured and rational way.

Q: Some downbeat policy-makers reckon that in 20 years, or so, a lot of the manufacturing base in rich countries will have gone to lower-cost producers like China or India. Is that a bit far-fetched?

A: I think, perhaps, it is. Manufacturing and the need for new products and innovation will continue. The form of it might change. The density of it in an economy might change. It’s a bit like agriculture, which is no longer a predominant part of the economies in Europe.

Q: In the global imbalances debate, many in Washington have been complaining that the Chinese have an unfair advantage in an artificially low currency, the yuan. The Chinese dispute that.

A: What we’re seeing here is no different than what we have seen at other times in our history. There’s always been dominant economic players, probably always will be.

We’re getting new actors coming in, which are new challenges for economies that used to see themselves as being in superior positions, in terms of generating economic growth and job creation. It’s not [as much] a matter of squaring the circle than of adjustments, and we need to make sure governments, societies, business, etc., are adaptable to these changes which are occurring.

And that adaptability has to be ongoing. This is not going to stop. We’re going to see this continual creation-destruction of jobs, new jobs being created, new economies emerging stronger than others. This is the way in which the economy has always worked.

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