Globalisation has affected most areas of contemporary life, not least academia. Not so many years ago there were few journals, most of them published by learned societies with much of the work done in-house but the printing and, perhaps, distribution contracted out. Today production of most of those journals has been outsourced to one of a small number of large-scale publishers, who in turn contract out many of the ‘back office’ activities to firms some considerable distance from the publishers’ headquarters, with most of the contact between publisher, copy-editor, printer, author, editor and owner being electronic. Those publishing firms compete for the learned societies’ custom, and journals sometimes change publisher without the consumers being aware of it, as societies seek greater financial and other rewards; the back-office activity contracts are frequently renegotiated and reassigned too.
This aspect of academic publishing illustrates the main topic of Jamie Peck's latest book. The moving of production processes offshore to benefit from much lower labour costs was a feature of a stage of globalisation that began some decades ago – termed the new industrial division of labour. It was then followed (1997 is sometimes identified as the start-date) by a further stage, much of which takes advantage not only of labour cost differentials but also the ease of contact via the internet to facilitate outsourcing of non-production functions. This, as Peck clearly demonstrates, is now a major activity with firms and their agents seeking locations where they can achieve not only cost savings but also value-added through working with their offshore partners. It differs very substantially from the offshoring of production, however. That frequently involved substantial, long-term investments in plant and commodity-chain construction and maintenance. With ‘service sector’ offshoring the contracts are frequently short and readily moved from one supplier to another; they may even involve relatively little labour.
This new form of offshoring activities is a particularly murky one and those involved are very reluctant to provide much detail. As a consequence there are few data sets available with which to chart its size, nature and frequent changes and researchers have to delve hard to uncover the basic patterns. That is what Peck has done, in a detailed multi-year study involving much archival work on the internet alongside trying to get some of the principals involved, including the consultants who promote offshore activities, to divulge details. The result is a fascinating story, of a process in great flux – a good example of creative destruction, of that which is solid melting into air. We learn not only about outshoring across the globe – farshoring – but also nearshoring (reducing the distance between the principals and their offshore contractors to enhance contact and productivity) and backshoring. The latter involves work that might formerly have been outshored being contracted to places within the principals’ home country – but to where costs are relatively low and the benefits of proximity outweigh the disadvantages of not moving offshore to cheaper wage areas where the problems of high quality delivery on contracts are greater (the ‘employability’ of labour, for example).
Places compete for this outsourced work. And there is a new phase underway – noshoring, or the ‘road to robotistan’. An increasing range of functions is being automated and contracted out to firms that could be anywhere – or nowhere. The operations are in ‘the cloud’ or, to be more precise, where the computers are sited, probably in large hangars using much electricity to both drive the hardware and keep it cool (or even, as with a recent example, underwater). The contests over their location may thus rest not on labour costs but rather those of power.
Most people are aware of globalisation and the division of labour involved, but probably not of its detail and complexity. The clothes they are wearing may have been made in Bangladesh – but were probably designed elsewhere; and the car they recently bought perhaps made in Spain – although it probably wasn't: the parts were made in a variety of locations and just assembled in Spain. People in the UK may be more aware of this complexity as Brexit approaches, but that probably only applies to goods. Regarding services there is much less clarity – not least because the industry is not keen on it. The location of call centres may be apparent from the operators’ accents – either internationally or regionally – but when transactions are being made via the internet it is usually far from clear what is being done where. And that is just the transactions involving an end-user/purchaser; even more hidden are the many more transactions involving intermediaries, those with whom the end-users have no contact. In displaying this Peck's book might be seen as somewhat disappointing: it is not abstract but much of its discussion, though empirically informed, is not replete with detailed exemplars. We know offshoring is big and complex, but we have no maps to show us how and where – because ‘they’ don't really want us to know. (Nor, in many cases, do they want the state to know. The recent exposés of large multinationals avoiding national taxation régimes through their location decisions about the various elements of their complex organizations, let alone those of the many subcontractors they employ, illustrate the political issues involved.)
Offshore brings that murky world into clearer focus, to the extent that is possible given the shadowy nature of much of its operation. In doing so, Peck not only sets out the nature of this rapidly changing world but also explores some fascinating side stories. One chapter, entitled ‘Outsourcing politics’, focuses on the political debates between US presidential candidates – notably Obama versus Romney – on the extent to which they favour offshoring (in Romney's case, he promoted it during his business career and so ‘destroyed’ many American jobs) and would counter it if elected. It raises questions, only hinted at, regarding the degree to which offshoring can be restricted by, for example, Trump's pre-election promises to repatriate American jobs, let alone what the consequences might be of the UK leaving the EU's customs union and single market.
The power of the state over outsourcing/offshoring capital is thus perhaps a next big issue facing contemporary capitalism. Governments speak about wanting global free trade (sometimes modifying that to fair trade) but at the same time seek to protect their own populations – and win their electoral support. The UK government, for example, argues that leaving the EU will enable it to promote even more trade globally where, presumably, comparative advantage will hold sway, yet then is criticised because it awards the contract for producing the country's passports to an overseas (cheaper) supplier. The contemporary state faces a continued tension between facilitating capitalism's operations wherever they might be and sustaining its national population's economic well-being. Jamie Peck's superb book focuses readers on that tension as they come to appreciate the complexity of the murky world in which we all now are deeply embedded.
