Squeeze Play

Is America's offshoring movement hurting black businesses? Many are applying innovative strategies to buck the trend.

It is nothing less than the hot-button labor issue of our times. The unions have howled about it for years, and the press chimes in regularly with bushels of bad news on the topic. Last year, the story elbowed its way into the presidential debates and became one of the thornier issues in the election. By now, we’re all aware of the stream—no torrent—of jobs and businesses that have been crated and unceremoniously shipped overseas. Manufacturing positions migrated long ago, and now you need only call a bank or computer company for a reminder that white-collar businesses have joined the trend: Within seconds, the call is zapped thousands of miles away to destinations we can only dream of visiting such as India, China, the Philippines, or Ireland. Offshoring, the outsourcing of jobs to foreign countries, poses one of the biggest threats to U.S. businesses today.

Despite the offshoring threat, 2005 is shaping up to be a banner year for Mark Wilson, chief executive of Ryla Teleservices Inc., a telephone-service outfit based stateside in suburban Atlanta. A few years ago, Wilson says he worried briefly about losing business to foreign competitors. In fact, in 2002, one of his clients actually did farm out a contract overseas, he says. But Wilson managed to maintain his success. With some companies readjusting their offshoring strategies, Ryla positioned itself to take advantage of a growing offshoring backlash and has reaped the benefits. This year, Wilson plans to add up to 400 new jobs at Ryla’s headquarters and has already added 48,500 square feet to accommodate the new changes. The company has also opened up a new center outside of Providence, Rhode Island, with 9,000 square feet of office space to house more than 100 more jobs. Oh, and did we mention that Wilson’s business runs call centers, the same telephone bank operations that have relocated practically en masse to exotic locations overseas?

BLACK ENTERPRISE spoke to many business owners like Wilson for an inside look at how offshoring is affecting fledgling and midsize African American companies. True enough, offshoring’s force has hit black firms large and small in terms of costs, competition, and revenue streams. But minority-run companies are not shrinking from the threat. Instead, black business owners are not only devising new ways to counteract business and job loss to cheap labor markets but they are also developing strategies to benefit from the trend. Here are some of their success stories, which offer lessons for businesses of all types.

THE MONSTER
Any way you stack the numbers, offshoring is a gargantuan movement that has brought light-speed changes to the U.S. business climate. Worldwide spending on job relocation to overseas offices was approximately $3.7 trillion in 2001 and expected to reach $5.1 trillion this year, according to Robert Kennedy, executive director of the William Davidson Institute at the University of Michigan. Forrester Research, a Cambridge, Massachusetts-based research firm that tracks technology changes, predicts the U.S. will lose 3.3 million service industry jobs to less expensive locations overseas over

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