There are often many overlooked arguments as to why protectionist policies against outsourcing would be detrimental to Western economies. A documentary broadcast by the BBC (British Broadcasting Corporation) in 2010 showed exactly why protectionism against outsourcing would prove fatal.
The documentary called “Theo’s Adventure Capitalists,” followed three different entrepreneurs from the UK that were looking to expand their businesses into the Indian market. The three entrepreneurs were followed by Theo Paphitis, a highly successful British businessman,(who has an estimated net worth of £210 million). Theo Paphitis, best known for his appearances on the programme Dragons’ Den followed the three entrepreneurs around India offering them advice and guidance as they looked to crack the Indian market.
Upon arriving in India, Theo Paphitis stated, “If you think India’s all about poverty, think again. It’s one of the fastest expanding economies in the world, even in a recession. There are more millionaires per square mile, here in Mumbai than anywhere else on the earth. It’s rising middle classes, 300 million of them have more and more spending power. There’s masses of opportunity here if you are bright enough to spot them.”
The ever sharp Theo Paphitis was quick to summarize India’s economic potential and power. As Theo puts it, India has an ever increasing spending power and hence why all the three British entrepreneurs wanted to expand their businesses into the Indian market. The business logic is simple, the entrepreneurs have a product to sell and the Indian market has the financial muscle to buy lots of it.
The significance of the documentary with respect to the outsourcing debate was that it reflected an ever increasing trend of British and Western entrepreneurs looking towards India as an economic powerhouse, market and source of revenue. The potential India now offers Western businesses is considerable. Hence, if the US and UK revert to protectionist measures against outsourcing the inevitable consequence would be retaliation by the Indian government in the form of it’s own protectionist policies. This would simply make it more difficult for Western businesses to invest in India and take advantage of the enormous market is offers the West. In turn this is one of the reasons why protectionism against outsourcing should not be advocated by anti outsourcing campaigners.
Anti outsourcing campaigners must realize that outsourcing, like the West’s expansion into the Indian domestic, is all a part of globalization. Outsourcing may cause temporal job losses but the overall job creation globalization as a whole brings by far exceeds the job losses. Hence we should learn to accept outsourcing as a part of the “two way street” that globalization is. One cannot curb outsourcing whilst support British expansion into the Indian market. And it is Western expansion into the Indian market that will create the most significant number of jobs back home.
If one advocates against outsourcing, then advocate against globalization and without globalization what would become of Theo’s Adventure Capitalists in India? Greater economic cooperation is the need of the hour and this BBC documentary couldn’t have been a better reminder of this.