Once upon a time there was a caveman named Og. Og was a good husband who provided for his family. He hunted for food, he found shelter in the form of a cave, and clothed himself and his family from the pelts of his dinner. He manufactured his own weapons and clothing and created fire. It was a simple, relatively, happy life.
However there was a downside to Og’s life. He constantly needed to relocate his family to follow the migrating herds, since OSHA didn’t exist yet, occupational hazards were numerous, and early retirement meant he died in about 25 years.
One day Og’s brother-in-law, Gok, came to visit Og. Gok told Og of a new town called Acirema where people didn’t move so often. Instead the people there grew crops and domesticated livestock. They shared in many different jobs such as farming, herding, tool making, construction, shop-keeping and medicine.
Og thought long and hard about joining Gok in this new civilized world but finally decided to move his family into the town and take up farming.
Soon Og realized that he no longer needed to do everything himself. There were capable men and women who could perform job functions that he had no time for such as home building, clothing making and tool manufacturing.
Now that Og no longer needed to do the things he wasn’t very good at, he could concentrate on becoming the best farmer that he could become.
After a short while, Og’s farming operation was very successful and grew and grew. He soon hired several of the Acirema townspeople to work on his farm. The workers were paid a wage that they could use to buy food (some of which Og’s farm actually produced) as well as other goods and services that other townspeople produced.
Acirema was very prosperous which allowed the creation of the best educational and medical institutions. Soon word traveled to other towns. People from other towns often moved to Acirema as they too wanted an opportunity for prosperity for themselves and their own families.
Neighboring towns soon began to supply raw materials and inexpensive labor for the new industries sprouting up in Acirema. The dependence upon these other neighboring towns didn’t bother the townspeople of Acirema as this now allowed them time for leisurely activities and an improved lifestyle.
After some time, workers in Acirema began demanding, more money, shorter work weeks, and better working conditions from the owners of the factories. At the same time, the people from the neighboring towns realized that they could process the raw materials that they were currently supplying into finished goods.
The factory owners discovered that they could purchase these finished goods from the factories of the neighboring towns and just shut down their own factories.
The workers of these closed factories soon found themselves without any means of earning a living. Many of them got jobs at other factories or started their own business doing the same type of work, some of them learned new skills and went to work in different industries, some of them just sat at home waiting for the factory that they worked at to reopen one day.
Meanwhile the neighboring towns began to prosper themselves. Their educational, medical, and transportation systems began to improve. Their workers have begun to demand higher wages, shorter work weeks, and better working conditions. Soon factories in the neighboring towns will close as the factory production moves yet to another place.
...and so it goes
The concept of outsourcing has been around since Og first decided to move into the town and begun to purchase goods and services from others. Og produced crops using a plow he purchased from the mercantile store, who bought it from the blacksmith who forged steel purchased from a factory who bought the iron ore and coal from the mine...
Everyone was a part of the supply chain...this is the way the civilized world has worked ever since the beginning of time...
As transportation and communication systems developed...so did the reaches of trade.
Whereas Marco Polo and Christopher Columbus journeyed to distant lands at great peril and difficulty in search of rare and exotic goods... today we have the Internet and UPS in order to make the task of trade much easier...
Outsourcing is nothing new...
The question you need to ask yourself is...
"What assets or skills do I bring to trade to the world?"
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