When people ask me about offshoring and whether it takes jobs away from New Zealanders, my answer is nuanced. There is some truth to the idea that certain jobs are being done offshore rather than locally. However, if we step back and look at the broader picture of labour economics, history suggests that the real driver of change in labour distribution isn't cheap labour—it’s technology. It's an important concept to understand for small business owners grappling with the “taking New Zealand jobs” problem.
You can trace the dynamic nature of labour force distribution back through multiple industrial shifts. The automated loom in the textile industry didn’t just make labour cheaper; it fundamentally changed the way textiles were produced, shifting where and how labour was deployed. Steamships and refrigeration revolutionised global trade, altering the economic structures of entire industries. The printing press dramatically reduced the need for scribes. More recently, computers, automation, and artificial intelligence have transformed white-collar jobs just as dramatically as industrial machinery reshaped factory work.
The key takeaway here is that technological advancements, not just access to lower-cost labour, are what disrupt labour markets and drive innovation. And in the context of small business offshoring, the core technological advancement isn’t factory automation or AI—it’s fast, cheap, and reliable internet.
Offshoring in its modern form is fundamentally a technology play. The reason small businesses should access offshore talent is not just because wages are lower in other countries; it’s because the infrastructure to support seamless remote work has been developed. High-speed internet, cloud computing, digital collaboration tools, and online education platforms have enabled skilled professionals anywhere in the world to contribute to businesses as if they were sitting in the same office.
To put it in perspective, take a look at accounting software like Xero. Decades ago, businesses employed bookkeepers who manually recorded transactions in ledgers, reconciled bank statements by hand, and balanced accounts without automation. Today, cloud-based accounting software does most of that work automatically. Businesses don’t think of using Xero as “taking jobs”—they see it as an innovation that makes financial management more efficient. Yet, in reality, this technology has fundamentally reshaped the accounting industry, reducing demand for lower-level bookkeeping jobs, while increasing the need for higher-value financial advisory services.
Offshoring should be viewed in the same way. It’s not about exploiting cheap labour; it’s about leveraging a technological shift that allows businesses to operate more efficiently and sustainably. Just as businesses embraced cloud accounting, automation, and digital workflows, they should also recognise that remote workforces—enabled by technology—are a natural evolution of how work gets done.
This doesn’t mean local jobs disappear. What actually happens is that the nature of local work changes. Just as accountants today focus more on strategic insights rather than manual data entry, small businesses that offshore routine administrative tasks can free up local staff for higher-value roles—whether that’s customer engagement, product innovation, or business development.
In short, offshoring isn’t a labour story—it’s a technology story. And like every major technological shift before it, the businesses that embrace it strategically will be the ones that thrive.
