US Companies are off-shoring manufacturing and service in droves. Will this strategy backfire when Chinese companies start using this knowledge to their own benefit?
The cost savings of off-shoring work to China and other nations seems to be the number one priority now for many US companies. However, the potential for competition and abuse of trademarks and patents is great.
This is an issue that many US companies may be overlooking. China, for instance has had a history of patent and copyright abuse. Piracy is rampant in the country and there is a great opportunity for knock-offs or outright theft of patents.
With so much manufacturing and service knowledge going to a country with issues such as this, US companies may just be building competitors for themselves. Unlike, the US however, non-compete agreements and patent infringement will most likely rarely be enforced.
Many of these companies that are manufacturing for US companies may start competing brands that mimic US brands and may even be sold through the same US channels. If this starts to become common it could be a major problem for US companies and the US in general.
The question many companies should be asking is it worth the risk of giving your knowledge and brand away?
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