New research delivers some surprising findings. For instance, “the majority of offshoring (57% by cost) was to locations with costs that were the same as or higher than America, such as Canada and Western Europe, rather than to low-cost developing countries (29%)—the ones typically suspected of gobbling up American work”:
By way of explanation, the researchers note that Western Europe and Canada are America’s largest and oldest trading partners, and point to a long history of foreign direct investment by American firms in these regions. Presumably, at least some of this investment and sourcing is reciprocated, though it will fall to future studies to determine how much. Interestingly, mid-cost emerging economies were almost entirely out of the mix, caught in what Mr Sturgeon calls the “middle income trap”—they are neither sufficiently attractive markets in their own right nor sources of cheap labour.
The Dish 