Is Outsourcing Good?
It looks like the whole of America is in the grip of the outsourcing fever. Don’t you think the world has gone small in size with the globalization of economy due to cheap and quick communication systems? Outsourcing has opened up the job world by offering jobs to people living abroad due to economic reasons and other special skills the locals may not have. What works in its favor is that outsourcing works out to be cheaper in terms of labor and other business costs.
Outsourcing - the Advantages
If you are an American, you may have another perspective, but the fact is that nations are benefiting from outsourcing though at the cost of local jobs. While it might be good for someone, it is bad for others.
The major companies in the US are outsourcing projects because one - it is economically viable, and two - special skills are available in countries where they have entered outsourcing contracts. The other two very pertinent reasons are that taxes in the US are relatively very high, and so is the wage structure. Both the factors contribute to company expenditure in a big way.
What makes India the most sought after outsourcing destination is its cheaper skilled labor and lower tax rate. Now, a US company can produce goods and services at relatively lower costs and sell it at a lower price. For outsourcing companies, it is easy to beat the competition by selling low and making high profits. Consumers in America benefit as they get to buy high standard products and services at lower prices.
We have got to educate ourselves to be able to compete with the world education standards, otherwise jobs will continue to slip out of our hands.
Posted on Sunday, January 22nd, 2006
Under: Business | No Comments »
