What is outsourcing and how does it affect economy?
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Outsourcing is when a company sends jobs that where previously in the U.S. to another country because the wages there are lower. Some say it weakens our economy because people lose jobs while others say it strengthens it because our goods and services are cheaper. You decide.
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Outsourcing can help US (or for that matter any country) who is interested to invest less money in processing/developing the product and servicing/selling it to the customer/client/consumer.\nThis helps to make a very huge difference in the cost to manufacture and the price to sell thus giving a huge profit margin. So, this will be more biased to the people who are doing business or investment than the people who have jobs.
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India offers cheap brainpower, China offers cheap manpower.\n\nThrough the Internet, it is easier to outsource services to India. There is even math and science tutoring of American teens by Indian tutors, using the Net and the phone.\n\nIf you want to read about what is REALLY going on with these two countries and how they will shape the new global economy by the middle of this century, read The World is Flat, by Thomas Friedman (already sold 1.5 million copies) and Three Billion New Capitalists, by Clyde Prestowitz.\n\nThe outsourcing aspects concern business executives, but the REAL impact will be on North American jobs as the Indians and Chinese are both smart and hungry for a piece of the action.\n\nThe new global economy is slowly becoming an "Olympic" economy where the best workers from each developed country will be competing directly with the best workers from other countries.
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Business Process Outsourcing (BPO) is the leveraging of technology or specialist process vendors to provide and manage an organisation's critical and/or non-critical enterprise processes and applications. The most common examples of BPO are call centres, human resources, accounting and payroll outsourcing. Business process outsourcing may involve the use of off-shore resources.\n\nBPO (business process outsourcing), the increasing trend of relocating entire business functions to either self-owned or third-party service providers, typically in low-cost locations.\n\nUse of a BPO as opposed to an application service provider (ASP) usually also means that a certain amount of risk is transferred to the company that is running the process elements on behalf of the outsourcer. BPO includes the software, the process management, and the people to operate the service, while a typical ASP model includes only the provision of access to functionalities and features provided or 'served up' through the use of software, usually via web browser to the customer.\n\nOut·sourc·ing in Technology\n\nThe procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs.\n\nContracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. In the U.S. in 2003, the term took on extra meaning, often referring to jobs being given to people in companies located in India and other countries. See netsourcing, ASP, SSP and facilities management. \n\nOutsourcing in Investment\n\nA practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally.\n\n\nInvestopedia Says:Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally. An example of a manufacturing company outsourcing would be Dell buying some of its computer components from another manufacturer in order to save on production costs. Alternatively, businesses may decided to outsource book-keeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant.\n\n\n-----\n\nOutsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Outsourcing is a business decision that is often made to lower costs or focus on core competences. A related term, offshoring, means transferring work to another country, typically overseas. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. Outsourcing became a popular buzzword in business and management in the 1990s. EDS was the first company to establish the outsourcing business.\n\nOverview\n\nOutsourcing is defined as the management and/or day-to-day execution of an entire business function by a third party service provider.\n\nOutsourcing and/or out-tasking involve transferring a significant amount of management control to the supplier. Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust.\n\nOrganizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. In theory, this business segment should not be mission-critical, but practice often dictates otherwise. Many companies look to employ expert organizations in the areas targeted for
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The general concept of outsourcing is having other firms do the work of a particular internal company functions.  Good example of that are the federal government agencies that looks for contractors to perform specific tasks.  An example is the company Lockheed Martin where they have a billion dollar contract with the Department of Defense to design and manufacture the F-22 Raptor.  \n\nOutsourcing can help a certain organization to save a little in terms of paying their own employess, and give other firms (usually start-up firms) an opportunity to take the work, which could give opportunities to potential to work in a different firm and perform the same duties.\n\nHowever, outsourcing can be a negative as well, a good example are call-centers owned by American firms.  Due to the labor costs in the United States being expensive, these firms reach-out or venture their business overseas where in most likelihood labor is cheaper.  Since call-center operators doesn't need to perform their business face-to-face with their customer, they don't need to travel to the United States to work.  This result to a lower cost in labor.  This sets gains in the part of the company but not to the average worker, which will lead to a higher unemployment turn-out.
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because americans underpay china to make them...that's why a lot of products and services get outsourced...it's cheaper on the company
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Is this a question, or a resume? As far as outsourcing to India, what a joke, thats why the economy is going to hell. shipping our jobs overseas--why pay $20 an hour when you can outsource to India for 20 cents
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Modernization means a great change for many countries. As you can see some effects of modernization is the outsourcing of business in other countries. That means less job for some countries while a great opportunity for other countries offering cheap labor cost. Other effects of modernization I think is the way people lives. Like now at our times, technology affects how we live our lives everyday. Cellphones and internet have largely affected the way we communicate with each other.
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I am in the call center business, no company will make it public knowledge they outsource their customer service/tech support call center.  You will need to advertise in trade magazines and hope they call you.  But right now the trend is outsourcing the calls to India.
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most businesses are booming in India right now...as far as outsourcing is concerned actually that's just one aspect although an important aspect of India's economy. What people need to understand is that the reason why more and more comanies are outsourcing work of different types to India is because those who have already done so are benifiting from it. That means the call centre workers in India are doing a good job.
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NO. I think that would be impossible. We cannot flourish if people are not working. Outsourcing causes Americans to loose jobs. Think of the problem on an individual level, if as an individual you cannot take care of yourself and have to depend on others what would happen? Just like individuals our country needs to be self sufficient.
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Outsourcing - the purchase by a company of labor or parts from a source outside the company rather using the company's staff or plant; Offshore - from land to water: An icy wind blew offshore; contracting - to make a formal or legally binding agreement with somebody to do something, especially work: I am not contracting if the work falls on sunday...
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Good point.  The jobs being outsourced overseas are better jobs than those left here, too.\n\n[ADDED] Lancelot (below) needs to do some research, as well as take his Econ 101 again.  He and the rest of the Bushie/right-wing ilk just LOVE simplistic explanations without substance.  Let's take Lancelot to school for a few moments....\n\nCorp tax rates in the US are among the lowest in the industrialized world - effective rate is 14% (that's net of tax break incentives, allowances, and subsidies provided by the government), which is lower than Lancelot's individual marginal rate.  Further, US corps, and many corps worldwide, WANT to do business inside the U.S. - we have the best intellectual property and copyright laws in the world as well as the greatest transparency in accounting standards (Enron notwithstanding and in fact making the point).  It's our TAXES that support the courts, SEC, Treasury, and other institutions that make our business climate so favorable to corporations.\n\nContrast this with the corruption and bribery that corporations have to put up with in many emerging overseas economies.  It's no wonder that the U.S. is THE country in which to launch a new business.\n\nTax rates have absolutely, positively nothing to do with the flight of jobs overseas.  Not that it isn't happening, and not that EVERYTHING is perfect about our economy.  Jobs really are going, and we have to face important issues about this.  But there are other factors - and not corporate tax rates - which are at play here.
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First do your research (i.e. What companies outsource? Where? Why? Are they saving money? Having problems? What have they learned? How would they do it differently in the future? Have they hurt American workers? The poor? Middle class? What do unions think? What do the workers who used to have those jobs think?). After you do your research outline what you have learned (i.e. The Impact of Outsourcing Jobs on the American Worker: A Study of the ZZZ Company Experience.) Now you are ready to write about this very important topic. Good luck.
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I think it's difficult for a lot of people to understand or support losing local jobs.  However, your scenario is accurate.  This is now a _global_ economy and people need to shift their thinking a little bit in order to understand the financial impact of decisions to outsource or not.   \n\nThe primary points of your argument are,\n1) There are equally competent engineers in India.  \nThis is true, in fact, of the people that I have worked with, I find that people in Indian firms are _highly_ competent, hard-working, and well-mannered.\n\n2) These competent engineers cost less.\nAbsolutely true.  This will probably change over time as the law of supply-and-demand starts to work, but not for awhile.  Although there is a great deal of demand for low-cose, high-potential engineers, there is also plenty of supply in the global markets.\n\n3) Companies that choose not to utilize global resources will lose.\nVery true.  The cost of product at such a company will be higher in some way.  The product will cost more to make, support, fix, enhance, etc.\n\n4) Downsizing has offsets.\nAlso true.  There will always be a need for direct customer interaction in many areas.  It's only the areas that can be serviced by remote people, like software development, testing, call centers, monitoring, etc that will be heavily impacted by global outsourcing.
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Outsourcing entered the business lexicon in the 1980's and often refers to the delegation of non-core operations from internal production to an external entity specializing in the management of that operation\n\nBPO outsourcing encompasses the transfer of ownership of any non-IT process to a capable supplier
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What do we get in return for giving our jobs away?  A lot of people think that we are outsourcing only blue collar/labor oriented jobs say like manufacturing. We are also outsourcing engineering and other technical work to countries like India via the internet. There are a lot of high paying manufacturing jobs. I get my hands dirty every day at work and I am not ashamed because I will make nearly 50 grand this year. That's on 50 hours per week which is a lot better than some of the white collar workers I know. There is a rediculous misconception when I walk into a store after work with my dirty navy blue uniform on with my name on it that I must be poor or something but the fact is I probably make more money than just about anyone else there.  Sorry going on a rant here. The fact is that when you take raw materials and produce usable products from those materials wealth is created. If you can produce a product and take it all the way to the end consumer you can make a lot more profit. But that requires engineering, research and development, market analysis, advertising, packaging, warehousing, wholesaling, distributing, and final sales. At each of those points wealth is redistributed. It all starts with mining and manufacturing. Everyone else makes some money along the way. A lot of very high paying high tech machining/die making jobs have gone to Taiwan. They are developing skills there that not many here in the U.S. can see the benefit. It makes me sick every time a have to explain what a machinist does. A machinist makes anything from the pistons in your engine to the wheels on your car to the mold that was used to form the shape of anything made from plastic. For example your keyboard, monitor casing, and mouse were all formed from plastic in a mold made by a moldmaker which is a type of machinist. These are the types of jobs we are losing.  Manufacturing drives innovation and if we stop doing this kind of work then our engineering capabilities will suffer due to lack of use. The main reason our country has become so wealthy is because of the huge supply of natural resources that have been mined and then manufactured into usable products. At every point in our growth we have come against obstacles to produce enough to supply a growing population. Due to these obstacles innovation was required. If we allow other countries to do our dirty work for us we will also be allowing other countries to be innovative for us. And we will eventually become weak minded and unable to solve our own problems. To answer the question, "Why is outsourcing of US jobs bad for the US?" It is bad because it takes away from the SOURCE of our wealth and our strength. There are only four economic sectors that generate material wealth: agriculture, mining, manufacturing, and construction. Other sectors, such as services and trade, redistribute this wealth, and are built on the products created by the wealth generators. Check out the link I hope your paper goes well.