Are personal services the next wave of offshoring? Even though you may think that personal services are locally rooted, there is a growing trend to offshore certain services, such as writing projects, graphic design and tutoring. According to the Wall Street Journal – Outsourcing Your Life:
Such “personal offshoring” is still new and represents a tiny fraction of the more than $20 billion overseas outsourcing industry. But management consultants and economists say it’s likely to evolve into a larger niche as offshore workers identify the opportunities. Thanks to instant messaging, computer scanners and email attachments, any work that doesn’t require meeting in person has the potential to be done overseas.
The approach relies on the same model that drives corporate outsourcing: labor arbitrage, or benefiting from the wage differential between U.S. workers and those in developing countries. In the U.S., tutoring services charge $40 to $60 an hour for math help. Some skilled tutors in India are paid $2 to $3 an hour.
The Journal article tested a number of services — from simply databases (for a wedding guest list and mislabeled “Wedding Planning” in the article) to kitchen remodeling design. They liked most of the services – except for the kitchen design with required on-site measurements (which they labeled “inconvenient”). Having lived through at least two kitchens, I can tell you it is more than inconvenient to have to do your own measurements. Unless your house is new (and then why are you redoing the kitchen) and therefore perfectly standard in its dimensions, don’t do it yourself. There will be some nuance of the space which an on-site designer is going to catch that you will miss.
The test of the landscape designer was a similar (but more positive) case:
Though it would have helped if our designer had seen the property in person, the plans proved to be a good starting point, for a very affordable price.
Once again, if what you are looking for are started ideas and are an experienced gardener who can take the idea as basic input, this may work. Otherwise, my experience is that there are too many nuisances to carry this through to completion.
All in all, the article doesn’t change my view of what can be offshored. Telecommunications are now good enough to be able to do math tutoring from a distance — at least for many. However, those areas which need some sort of physical or site specific knowledge require on-site presence.
But how those on-site jobs translate into exports is still a mystery (see my previous posting).