Export or Outsource - Does Your Heart Care?

When most people think about international trade, they picture goods moving across borders. What does it mean to export a service? What is the difference between exporting services and outsourcing jobs?

Export.gov defines exports as goods and services produced in one country and sold in other countries in exchange for goods and services, gold, foreign exchange, or settlement of debt.

Export.gov defines activities such as banking, telecommunications, advertising, data processing, and consulting as services. Service industries account for approximately two-thirds of the economic activity of the United States and for an increasing percentage of U.S. exports. Therefore, when a U.S. accounting firms contracts with a Swedish company for the U.S. firm to perform accounting services on behalf of the Swedish firm, we have a service export.

Merriam-Webster’s Online Dictionary defines outsourcing as the procurement of goods or services needed by a business or organization under contract with an outside supplier. Therefore, when a company in the U.S. creates a call center in the Philippines to provide customer service to its customers, this activity is called outsourcing.

So, maybe exporting and outsourcing aren’t the same, but they could be related because some of the same services that are being sold to other countries, such as accounting and data processing are also being outsourced.

What is being outsourced to foreign countries? Call centers for numerous companies are located all over the world. Just try to get technical help with your Internet or computer and you’ll likely be talking to someone in India or the Philippines. However, Sen. Charles Schumer, D-N.Y. introduced legislation earlier this month that proposes a charge to U.S. companies for calls transferred to a foreign call center. This proposal opens up another can of worms that should test the difference between exporting and outsourcing. Is there an actual service being exported or has this service been outsourced? It may depend on where the initial call is actually answered? If one argues that it is an export, then the proposal may meet with some constitutional challenges under the Export Clause of the Constitution.

U. S. colleges and universities as well as businesses often outsource some of the eLearning development work to India.

One of the newest and most controversial outsourcing ventures is called “medical tourism.” Medical tourism is a term that describes overseas travel for medical treatment and other health care services. Could U.S. citizens be required to travel to foreign countries for medical services? At some of the hospitals in India, U.S. trained doctors can perform heart surgery for $6,000, while the same surgery costs around $100,000 in the U.S. What’s next on the list? So far, I think home improvement projects may be safe. It’s not likely that someone in the Philippines will be able to fix my broken air conditioning unit today.

What does America need to do in order to export more and outsource less when it comes to jobs and services? It might be impossible to export or outsource some personal services such as cleaning and home maintenance, but if we continue to outsource certain services to other countries, what will Americans do? What will we export?

By the way, all of the bcpLearning courses are created and managed using U.S.A. labor. When you contact our support center or call our office, you are talking to someone in the U.S.A.