How AI could reshape corporate outsourcing decisions
By
Noah Smith
Summary
The article explores how AI might affect business outsourcing decisions, examining the tension between AI enabling companies to bring work in-house (by automating tasks previously sent overseas) and AI potentially making outsourcing even more efficient and attractive. It discusses the pre-pandemic decline in business dynamism, the pandemic-era surge in new business applications, and how AI could reshape organizational structures, labor markets, and the fundamental question of what work companies choose to keep internal versus contract out.
Source
Twitter / XHow AI could reshape corporate outsourcing decisionsnoahpinion.blogKey quotes
· 4 pulledIt's almost hard to remember nowadays, but before the pandemic a lot of us were worried about falling business dynamism in the United States.
For whatever reason, Americans just weren't starting companies — either high-growth startups or small businesses — at the rate they used to.
Then the pandemic came, and the trend shifted almost overnight. Suddenly, Americans were creating new businesses again.
Notably, even in 2024 the trend in business applications showed no sign of reverting to its pre-pandemic trajectory.
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