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08/11/2004
Pressure on firms to ‘off-shore’ growing, says CBI
A CBI survey has revealed that many companies feel under growing pressure to relocate parts of their business overseas.
Opening the CBI annual conference in Birmingham, employers boss Digby Jones argued that that the benefits of off-shoring outweighed the drawbacks; that the process would increase productivity, profitability and economic growth.
Co-sponsored by the CBI and Alba, a MORI survey on the topic revealed that 51% of respondents said pressure to off-shore had increased over the past two years, with 21% describing these pressures as "very great".
Almost one third of respondents said they had taken “some activities overseas” and almost one fifth were considering doing so.
Mr Jones, the CBI’s Director-General, said: "Off-shoring is now part-and-parcel of doing business in the global economy.
"Make no mistake, this is a survival issue. Anyone who believes that firms have a great deal of choice are naive. Companies know if they don't do it, somebody else will. If competitors act and they don't respond, they may put their business at risk.
"It is short-sighted simply to see all this as a bad thing. Globalisation was made for Britain. Off-shoring means greater productivity and more efficient goods and services. It also means UK jobs will be of higher quality, more skilled and in many cases more secure.”
The survey showed the trend was increasingly extending beyond manufacturing to areas like information technology, financial services, design, and even research and development.
Mr Jones urged the government to avoid forcing firms to off-shore through an increase in policies unfriendly to business He said that the rising cost of compliance with regulation was starting to “drive firms abroad”.
The CBI survey revealed the main reason cited for off-shoring was to cut costs, followed by improving the speed and quality of services. But restrictive regulation too played a part with 26% of respondents currently considering a move saying that legislation was a reason.
China and India remain the most popular off-shore locations, but firms view Eastern Europe as increasingly attractive, with Poland and the Czech Republic leading the pack.
(SP/MB)
Opening the CBI annual conference in Birmingham, employers boss Digby Jones argued that that the benefits of off-shoring outweighed the drawbacks; that the process would increase productivity, profitability and economic growth.
Co-sponsored by the CBI and Alba, a MORI survey on the topic revealed that 51% of respondents said pressure to off-shore had increased over the past two years, with 21% describing these pressures as "very great".
Almost one third of respondents said they had taken “some activities overseas” and almost one fifth were considering doing so.
Mr Jones, the CBI’s Director-General, said: "Off-shoring is now part-and-parcel of doing business in the global economy.
"Make no mistake, this is a survival issue. Anyone who believes that firms have a great deal of choice are naive. Companies know if they don't do it, somebody else will. If competitors act and they don't respond, they may put their business at risk.
"It is short-sighted simply to see all this as a bad thing. Globalisation was made for Britain. Off-shoring means greater productivity and more efficient goods and services. It also means UK jobs will be of higher quality, more skilled and in many cases more secure.”
The survey showed the trend was increasingly extending beyond manufacturing to areas like information technology, financial services, design, and even research and development.
Mr Jones urged the government to avoid forcing firms to off-shore through an increase in policies unfriendly to business He said that the rising cost of compliance with regulation was starting to “drive firms abroad”.
The CBI survey revealed the main reason cited for off-shoring was to cut costs, followed by improving the speed and quality of services. But restrictive regulation too played a part with 26% of respondents currently considering a move saying that legislation was a reason.
China and India remain the most popular off-shore locations, but firms view Eastern Europe as increasingly attractive, with Poland and the Czech Republic leading the pack.
(SP/MB)
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