HOWZAT

“We have moved from a world of building to one of buying,” said Ridderstrale. “And the more non-core activities you place outside the firm, the higher the value you can generate.”

One technique for doing so is the use of “white-labelling” — the practice whereby a company supplying a product or service may provide it to more than one distributor, permitting each to slap on its own label before selling it to the end-user. Thus, a cornflake factory might supply the same cornflakes to rival supermarkets, each of which will label them with its own brand.

The internet lends itself particularly well to white-labelling. Infomedia, one of Britain’s fastest-growing private companies, not only sells mobile-phone content (ring-tones, games and so on) through its own website, partymob.com, but also supplies the same content to websites owned and fronted by other companies in Ireland, Australia and elsewhere.

One is iol.ie, the consumer website for BT in Ireland. “They wanted to supply this same content to their customers,” said Michael Tomlins, Infomedia’s commercial director. “So we made a smaller version of partymob.com for them and white-labelled it. Consumers in Ireland are not made aware that the website is run by Infomedia. But they get the full service and the highest-quality content that only a company specialising in mobile content could provide.”

Another sector where white-labelling is growing fast is financial services. If you buy, say, a new BMW and decide to take out insurance at the same time, the policy will be sold as BMW insurance but actually be underwritten by Royal Bank of Scotland (RBS). Indeed, seven of the top 10 carmakers use RBS to provide their insurance, which they label as their own.

A result of the growing use of white-labelling and outsourcing is that many companies seem to consist of little more than a brand. But companies — or “brand-carriers” — still take responsibility for delivering on the brand promise by orchestrating their network of suppliers, policing quality control, and shouldering ultimate legal responsibility. Brand-carriers are buck-carriers.

“If you buy a computer from Dell, you will end up at a call centre owned by someone else, but Dell is ultimately responsible,” said Ridderstrale. The same applies if you buy a pair of trainers from Nike or a phone from Sony Ericsson. “They are not actually made by Nike or Sony Ericsson, but the company that is selling to the final consumer has to accept responsibility for the entire chain.”

A modern company, argues Ridderstrale, is like a Lego model. “Once, activities and units were welded together. Today, you can take them apart and move the pieces around.”

The nature of companies, in short, is changing because companies now outsource what they once produced in-house. Of course, outsourcing itself is far from new. But what is new is the sheer scale of it. The number of companies outsourcing their manufacturing almost tripled in a two-year period, Business Week magazine estimated recently.

Indeed, at least four things are different about the new outsourcing. The first is its international nature — outsourcing is becoming offshoring and is spreading across borders and continents.

The most famous example is the offshoring of call centres to India. Thus, as of this month, up to half the 50m calls answered each year by Britain’s national rail-inquiries service are to be handled by call centres in India as part of a £100m contract run by BT and Ventura.

Offshoring, however, is just a sub-category of outsourcing. And we ain’t seen nothing yet. Offshoring still accounts for a minority of outsourcing but is predicted to end up in a landslide majority. A recent McKinsey study estimated that while 20% of world output was already open to global competition, the figure in 30 years would be 80%. The fact that English is the language of the business world means that English-speaking countries will feel the greatest effect. “What we have so far,” said Ridderstrale, “is a mere tea-party.”