As the gap in worldwide wage rates narrows further, it will become more obvious that other factors, such as skills, labour law, clusters of industries, infrastructure, tax and regulation are playing an ever more important role when companies decide where to put their production. Now that many firms are taking another look at their outsourcing and offshoring policies, governments need to give them every reason to come back. "If companies are offshoring because of fixable policy problems at home," says Mr Porter, "that is unforgivable."

Read Now