Outsourcing

Outsourcing affects large groups of people each year. For some, it is beneficial, for others, it can be equally disastrous. There are many people each year who lose their jobs because their company is outsourcing to another place where they can hire someone to do the exact same job for a much lower pay. It is estimated that in the next ten years 3.5 million jobs in the form of computer programmers and call centers will be outsourced. In the end, who really benefits from outsourcing? Outsourcing has both a positive and negative effect on the United States and the countries we outsource to.

Outsourcing emerged a few thousand years ago due to the production and sales of food, tools and other household appliances. Once societies and communities began to form people with specialized professions began to trade with one another for goods and services. During the industrial revolution the first wave of outsourcing occurred. At this time the companies doing the outsourced work were mostly located in the same country. During the 1970s, in the United States, it was common for computer companies to export their payrolls to outside service providers for processing. Accounting services, payroll, billing and word processing all became outsourced work in the 1980s. The reasons for outsourcing had more to do with small efficiencies than reshaping the economy. During the late 1980s outsourcing began to emerge as a potentially powerful force in transforming global economies. Early outsourcing by corporations like Kodak and American Standard captured the public’s eye. Kathleen Hudson said her goal was to “plug into the wall and have data come out.” This kind of thinking is what helped outsourcing prosper.

Outsourcing can boost developing nation’s economies. However, the world is a finite space with limited resources. Ironically, it is humankind’s ability to innovate that may account for the demise of outsourcing. New technologies may eventually make the workplace as we know it obsolete.

There are many good things that come out of outsourcing for both the United States and the nations we outsource to. Due to the establishment of many institutes of technology in the fifties and the internet boom in the nineties, hundreds of information technology companies outsourced to India creating an abundance of jobs. In other nations outsourcing gives technology savvy young people livelihoods that move them to the ranks of the middle class. There are so many jobs in India right now that when Chris Jobin goes to India on the outsourcing episode from the television series 30 days, the placement agency’s sign says “walk in with your rÐ"©sumÐ"© and walk out with a job.” Call center jobs are the best paying jobs in India, as a result of this India is the third most English speaking nation. Bangalor, India is the outsourcing capital of the world. Outsourcing is giving India a chance to become economically viable.

India has become extremely Americanized. This is both good and bad. India becoming Americanized is a good thing because the United States gets a profit. In India they use computers from Compaq, his software from Microsoft, his phones from lucent air conditioning from carrier and bottled water from Coke. So Indians get the jobs, however America is still making a profit.

Outsourcing to India is turning out to be a blessing for companies. India’s edge in quality and cost benefit is what is drawing organizations towards it. India will remain on top, in comparison to competing nations such as China, Ireland, Israel, & Philippines in the outsourcing “race”. The level of excellence India has in this field did not come overnight. Government policies, infrastructure, large number of people who can speak fluent English, have all played a pivotal role in India’s success. Outsourcing has many benefits; however there are many downsides as well.

Workers in industrialized nations are being displaced in large numbers and well paying jobs are not being created fast enough to make up for the positions that have been outsourced to other nations. Jobs that were once thought of as immune to trade displacement (computer programmers, telemarketers, customer service reps, etc) are now some of the most outsourced jobs. These jobs are now fully tradable due to the advances in communication and computational technologies. Outsourcing helps nations by giving jobs and hurt the Americans who lose their jobs to outsourcing because there are not many job openings here in America. Chris Jobin from “30 Days” experienced a very difficult time after losing his job to outsourcing; he had to sell all his stocks and use the money earned to pay his pilling bills. Chris also had a six week old son that he needed to take care of and being out of work made it difficult to properly support his family.

One major downside to outsourcing is how the Indian culture is changing as a result of out influence. Soni from “30 days” said that if