As part of our series on outsourcing, we look here at this 2004 report from the Mckinsey Global Institute titled 'Exploding the Myths about Offshoring', which puts forward the classical free trade position from a US-based perspective.

The report accepts that, 'what is good for the economy as a whole may not be good for individuals', but rests its case on these figures. 'For every dollar of corporate spending that is outsourced to a low-wage nation, the spending economy captures more than three-quarters of the benefit and gains as much as $1.14 in return. Far from being a zero-sum game, offshoring is instead a story of mutual economic gain'.

According to McKinsey's, only 33c of every dollar spent offshore stays in India. The other 67c returns to the USA through corporate savings, returned exports, and repatriated profits. These are then passed on to the consumer through price cuts, and used to generate jobs through new investment, making up the 14c of additional wealth that results from the process.

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