A report by a Boston Consulting Group has exhorted U.S. companies to speed up “offshoring” operations to India and China, including high-powered functions such as research and development, according to The Washington Post.

The report warned American firms that they risk extinction if they hesitate in shifting facilities to countries with low costs. That is partly because the potential savings were so vast, but the report also cites a view among U.S. executives that the quality of American workers is deteriorating.

“The largest competitive advantage will lie with those companies that move soonest,” The Post quoted the report as saying. “Companies that wait will be caught in a vicious cycle of uncompetitive costs, lost business, underutilized capacity, and the irreversible destruction of value.”

Boston Consulting, which counts among its clients many of the biggest corporations in the U.S., admonished them that they have been too reluctant rather than too eager to outsource production to “LCC’s,” or low-cost countries. “Successful companies ask themselves, ‘What must I keep at home?’ rather than ‘What can I shift to LCC’s?’” states the report. “Their question is not ‘Why outsource to LCC’s?’ but ‘Why not?’”

The Post said the report, released in May, went almost unnoticed amid generally upbeat news as strong economic growth has begun fueling an increase in jobs, diminishing public debate about offshoring.

“More than 40 percent of the companies we talked with expressed significant concerns about the erosion of skills in the work force,” the report said. “They cited machine operators who are unable to handle specialized equipment properly or to make the transition to new work materials. In contrast, LCC’s provide large pools of skilled workers who are eager to apply their ‘craftsman’ talents.”

(Compiled from news dispatches by Shaji Iype)