How can rural communities adapt and prosper in the era of globalization– that’s a question I am often asked. A new report entitled Rural Sourcing: The Migration of Knowledge-Based Jobs to Rural America, by students at the University of Texas at Austin highlights this trend (Hat tip: Steven Pedigo).
“In their research, the students found that not only do companies
move certain service functions to small and mid-sized cities to take
advantage of the lower wage rates and facility costs, but they do it to
avoid the hidden costs associated with offshoring, including travel, communication, security, time schedules and cultural misunderstandings. ” Read more here.
What are your thoughts on this trend?
December 28th, 2006 at 8:57 pm
They don’t even have to be rural workers. I have started using homesourcing for tasks that used to be for office temps. I’m getting a lot of mileage out of virtual personal assistants on tasks that take more than a computer script, but less than a PhD.
I currently employ a lawyer/mom in Chaddsford, PA for work delivered virtually, making her WHERE less important to me than her ability to deliver. She is worth GOLD to me, and yet doesn’t have to work in our headquarters on Long Island, NY, nor with me in our satellite office in Massachusetts.
JetBlue homesources their customer service, and as I use them a lot, I’m VERY satisfied with the level of service I get. Why have an impersonal call center in a cost-reduced part of a town begging for commerce when you can let families stay geographically satisfied while delivering the work to them.
Just as Web 2.0 is about decentralizing data (through widgets and wikis and YouTube’s sharing methods), homesourcing is about decoupling work from a locale and freeing the Creative Class to source their knowledge workers creatively.
I’m a big fan. I’d love to talk with you some day.
–Chris Brogan…
December 29th, 2006 at 7:35 am
I recently had a discussion with a Citigroup executive who basically said these same things.
I’m a little less impressed with the implications of this article. Just when I was getting civic leaders and policy makers to believe me when I said we need to focus less on attraction because those opportunities were limited, this study had to come out! Great, more opportunities to beg and bribe companies to move to rural regions.
First of all, the inefficient spatial distribution of economic activity is pretty well-documented- Porter talks about it in “Competitiveness in Rural US Regions: a Learning and Research Agenda.” It’s good to see that brought to light in this article
I have a couple of thoughts about this article:
1) Professor Jarvenpaa’s contention that rural regions have been “largely untouched by globalization” is fallacious. Rural regions have yet to garner the benefits of globalization. Globalization has exacerbated the steady decline rural economies have been experiencing for decades.
2) While the study looked at cost benefits for companies, I wonder what the costs are to communities ie ROI in terms of incentives and costs per job. The reference to companies “trolling for opportunities” was telling. Furthermore, accountability for incentives must be tightened. Rural regions have a tendency to be cheap dates by giving finite resources away without adequate controls on what the company does or doesn’t do.(But that’s a different story)
I’m a little hesitant to accept the rather categorical assumptions that this represents potential opportunity for all rural regions.
I’m sure MBA types would see this as a great opportunity. However, from where I sit, I don’t see this as anything more than the next generation of rural recruitment efforts.
Rural regions should focus primarily on entrepreneurship and retention as the primary strategy. Business attraction should be the third tier strategy. With finite economic development dollars available, those dollars should go to what would increase the economic vibrancy of the region- this would be good for the communities themselves, and would make them more attractive to incoming businesses. And maybe not make us feel so much like a cheap date when all is said and done.
One way to address the middle management issue would be to create a system to notify those looking to relocate to a region, such as those with connections to the region ie brain drain people,and incentivize (if you must) their relocation back to the region. For instance, this can be done via communication through student loan finance authorities (they have the graduation information and the current addresses of these students) and through an “ex-pat” blog. This presents a chicken/egg conundrum of sorts- but over time it may be one of many ways to address the problem.
Facilitating the connectivity between education institutes and future potential employers to address the long term employment needs may be another avenue for consideration.
December 29th, 2006 at 3:02 pm
Chris and Sandy – Nicely said. Wondering if there aren’t some companies out there trying to “rollup” this home-sourcing talent, and match to work?
Sandy – Your points about rural communities and globalization and the “company attraction” bent are both very well taken.
Thanks a ton, Richard