The pressures of global competition are forcing more and more UK companies to outsource parts of their business to low-cost destinations in Asia and eastern Europe.
A survey conducted by the Confederation of British Industry (CBI) ahead of its annual conference, which gets under way in Birmingham yesterday, shows that an increasing portion of businesses in both the manufacturing and service sectors were looking offshore, with India and China the most favored locations.
Digby Jones, the CBI's director general, said offshoring was now a fact of life, but stressed that the benefits of moving some business functions overseas outweighed the costs.
Higher profitability meant jobs were saved or created in the UK, he said. The CBI estimates that outsourcing may have cost 250,000 jobs in the past 10 years, but helped create 400,000 to 500,000.
"It's here to stay," said Jones. "Off-shoring is now part and parcel of doing business in the global economy.
"Make no mistake, this is a survival issue. Anybody who believes that firms have a great deal of choice is naive. Companies know if they don't do it, somebody else will. If competitors act and they don't respond, they may put their businesses at risk."
Jones said countries who believed that they could fight outsourcing through protectionism were living in "cloud-cuckoo land," but he said the burden of government red tape was helping to push companies overseas.
"The government must avoid forcing firms to offshore through an increase in policies unfriendly to business. The rising cost of compliance with regulation is now starting to drive firms abroad."
A survey of 150 CBI companies employing 750,000 people found that the desire to cut costs was comfortably the main reason for firms contemplating offshoring, with more than nine out of 10 firms citing it as a reason.
However, Jones said that the frustration of business with bureaucracy was reflected in the 26 percent of firms which said regulation had made them consider moving. He said the government should help to reskill the workforce.
"Western economies have to upskill and reskill for ever. We can never say the job is done," he said.
Brendan Barber, general secretary of the Trades Union Congress, rejected the idea that British businesses were being driven abroad by high tax or over-burdensome regulation. The UK was a low-tax country and second only to the US in its lack of employment regulation, or red tape, when compared with the rich countries in the Organization for Economic Cooperation and Development, he said.
"Digby Jones is right to stress the importance of employee skills. Some British companies have an excellent record of investing in their staff but there is a long tale of poor performers.
"Too many companies prefer low paid, low skill, long hours, `low road' jobs that cannot compete in today's global economy. The UK will never cut pay, working conditions or employment rights enough to beat India or China. We need to move up to a `high-road' economy, in which innovative businesses with well trained and highly skilled staff provide quality products and services."
The CBI survey found that 51 percent of respondents said pressure to outsource had increased over the past two years, with 21 percent describing the pressure as "very great." Some 30 percent said they had already taken some activities overseas and almost one in four were considering doing so in the future.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique