Steve Crosby, a senior managing director of the securities and investment practice at PricewaterhouseCoopers, says Corporate America’s massive wave of off-shoring could come to a grinding halt. Rather so-called “near-shoring” will regain vogue status in these tough economic times. Call it a more benign version of Buy American.
“People are making some hard-nosed decisions about what it costs to go to India when wages are up 30% in the last 18 months,” says Crosby. Crosby believes that companies are now waking up to the unforeseen burdens of off-shoring: namely hidden travel costs and new onerous taxes that some local tax authorities are levying on U.S. companies operating within their borders.
A near-shoring trend would be a major shift indeed: Gartner Research predicted business process outsourcing would grow 10.5% year over year between 2007-2012--reaching $55.9 billion in outsourced operations by 2012. And an IDC report shows that offshore outsourcing in financial services generated $30 billion in revenue and has grown by 25% over past two years. The same report estimates total worldwide business process outsourcing in all industries reached $168.5 billion in revenue.
