Is this about productivity measured as economists usually define it (so - value added divided by hours worked)?
It is a very misleadingly named indicator. If you're a barber working in a small village in a poor country you cut hair for 8 people a day for 3 USD and pay 100 USD a month for renting a place and other costs. So your productivity is 20*24 - 100 = 420 - 100 = 320 USD / 160 hours a month = 2 USD/hour.
If you go to a big city in developed country you now take 30 USD per haircut and still do 8 of them a day and pay 1000 USD for rent and other stuff. That results in a productivity of 20 USD/hour. You had become "10x barber" just like that :)
It has nothing to do with how well or fast you cut hair or how "productive" or distracted you are. It's all about the price of labor.
If that's the productivity we're talking about then the answer is "Great Averaging". Every job that could be moved to low-income countries to lower the costs - is. So the cost of labor goes down. Meanwhile land prices and patents and brands remain in high-income countries. So the relative cost of labor is lowered (or at least its growth is artificially slowed down). For people in low-income countries (like me) the "productivity" goes up, for people in high-income countries it goes down. Great Averaging.
A good physical analogy would be 2 containers with water. 1 with hot water and 1 with cold water. When you connect them the water in both changes temperatures in opposite ways. And you can extract work from the temperature difference (that's what the millionaires who do the outsourcing do).
It also increases local inequalities (you get rich people in poor countries and poor people in rich countries), but decreases the inequality globally.
It is a very misleadingly named indicator. If you're a barber working in a small village in a poor country you cut hair for 8 people a day for 3 USD and pay 100 USD a month for renting a place and other costs. So your productivity is 20*24 - 100 = 420 - 100 = 320 USD / 160 hours a month = 2 USD/hour.
If you go to a big city in developed country you now take 30 USD per haircut and still do 8 of them a day and pay 1000 USD for rent and other stuff. That results in a productivity of 20 USD/hour. You had become "10x barber" just like that :)
It has nothing to do with how well or fast you cut hair or how "productive" or distracted you are. It's all about the price of labor.
If that's the productivity we're talking about then the answer is "Great Averaging". Every job that could be moved to low-income countries to lower the costs - is. So the cost of labor goes down. Meanwhile land prices and patents and brands remain in high-income countries. So the relative cost of labor is lowered (or at least its growth is artificially slowed down). For people in low-income countries (like me) the "productivity" goes up, for people in high-income countries it goes down. Great Averaging.
A good physical analogy would be 2 containers with water. 1 with hot water and 1 with cold water. When you connect them the water in both changes temperatures in opposite ways. And you can extract work from the temperature difference (that's what the millionaires who do the outsourcing do).
It also increases local inequalities (you get rich people in poor countries and poor people in rich countries), but decreases the inequality globally.