Saturday, February 21, 2009

Geography of Outsourcing

Continuing yesterday's theme of a talent export economy, consider the attributes of new hot spots for outsourcing:

Belfast makes the grade for its strong schools and universities, its young population, high number of IT graduates and cheap operating costs, while Brisbane has a large talent pool, a multilingual workforce and employee costs that are 10 to 15 per cent cheaper than other Australian cities.

Cities in the United States and Canada predicted to be excellent locations for outsourcing activities: Boise, Calgary, Winnipeg, and Indianapolis. Indianapolis is worth highlighting because it is an indicator of the Rust Belt's potential for corporations looking to cut operating costs while maintaining ample access to an educated workforce. But Indy is also relatively good at attracting in-migration, which sets that city apart from its urban economic cohort.

By all appearances, a glut of talent is important. The Rust Belt is full of cities producing more graduates than the local economy can absorb. Relocation strategies of enterprise keen on exploiting new outsourcing opportunities suggest a different approach to workforce development. Instead of pushing students towards regional labor shortages, we should prepare them to thrive in a global market. Targeting the most geographically mobile employers is a good idea, but the local economy will need to mature as operating costs inevitably rise and the demand for labor shifts to other sectors. Area post-secondary education will need to be flexible and on top of global labor market trends.

Update: The Urbanophile posts about Indianapolis acting as an outsourcing hub for Chicago businesses.

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