-Jayan CM
As the US presidential election heats up, Democrat presidential senator Barack Obama candidly voiced the anti-outsourcing card. Unlike most other anti-outsourcing lot Obama does understands that 'America cannot "shy away" from globalization, but reiterated that it will need to take measures to ensure that jobs are not shipped overseas. Now far that was a political statement is only a matter of time before we see how effective it will be for the American economy.
Going back to history and how America started outsourcing, well! its all a part of the historical economic swing towards globalization and free trade. During the times anti-outsourcing lobby would say 'Why send IT work to India or any part of the world when that can be done by paying a little more and have it done in middle or in some low-cost area in America. There was a common belief outside the corporate America that "If America can outsource work to such low cost countries, then it can outsource to Arizona”.
The idea of IT outsourcing to low-cost region within the United States looked promising that time. Many local companies moved their billing operations and services to smaller areas of America to take advantage of cheaper labor rates. But this trend analysts had predicted will not sustain for the long and will have minimal or no impact’.
As said above the concept about outsourcing to low-cost regions in the United States made sense initially, but later this tried and tested formula started to wane off. The reason; there aren't enough skilled IT workers in those areas to cater the ever demanding IT needs.
Secondly to catch up with the competitive market, these companies where under constant pressure from their investors to increase revenue, so they moved out their operations offshore to low cost countries for bigger saving. More and more companies started looking offshore to get the work done at cheaper cost. India as their favored destination was not a surprise. The driving forces behind these IT companies to place work with India was an amalgamation of cost saving and convenience. This move even created panic in the manufacturing sector in the United States which too followed the suite to move offshore to places like China.
Another major factor for growing outsourcing involves America's social infrastructure and cost structure which is very different from those countries' where they outsource their work to. In globalization era companies cannot afford to sit back and practice the impracticable. They look at the world as one market and want their product to be on the global front even if that requires them to build their facilities in countries where they outsourced. Perhaps that is one of the reasons why India sees so many American IT giants functioning from Bangalore, Hyderabad and Chennai.
How concerned these companies are towards their country's economy is not a question because they will do all that they need to do in order to keep the profits up. These companies claim that outsourcing helps them save costs and increase profit, which is good as they will pay higher taxes.
Offshore outsourcing" is a stirring reality today, this is the signal of the future, and we just have to go with the flow. America realizes that low cost operation makes it feasible to develop product abroad and ship the finished goods back to the US is a cost saving. The situation grew to such extend that whatever the product may be, there is an effort to ship it outside America to cheaper labor.
There are mixed reaction about outsourcing. So in the age of outsourcing, does it look viable that we go by the books and apply old rules? Your take on this Senator Obama!
As the US presidential election heats up, Democrat presidential senator Barack Obama candidly voiced the anti-outsourcing card. Unlike most other anti-outsourcing lot Obama does understands that 'America cannot "shy away" from globalization, but reiterated that it will need to take measures to ensure that jobs are not shipped overseas. Now far that was a political statement is only a matter of time before we see how effective it will be for the American economy.
Going back to history and how America started outsourcing, well! its all a part of the historical economic swing towards globalization and free trade. During the times anti-outsourcing lobby would say 'Why send IT work to India or any part of the world when that can be done by paying a little more and have it done in middle or in some low-cost area in America. There was a common belief outside the corporate America that "If America can outsource work to such low cost countries, then it can outsource to Arizona”.
The idea of IT outsourcing to low-cost region within the United States looked promising that time. Many local companies moved their billing operations and services to smaller areas of America to take advantage of cheaper labor rates. But this trend analysts had predicted will not sustain for the long and will have minimal or no impact’.
As said above the concept about outsourcing to low-cost regions in the United States made sense initially, but later this tried and tested formula started to wane off. The reason; there aren't enough skilled IT workers in those areas to cater the ever demanding IT needs.
Secondly to catch up with the competitive market, these companies where under constant pressure from their investors to increase revenue, so they moved out their operations offshore to low cost countries for bigger saving. More and more companies started looking offshore to get the work done at cheaper cost. India as their favored destination was not a surprise. The driving forces behind these IT companies to place work with India was an amalgamation of cost saving and convenience. This move even created panic in the manufacturing sector in the United States which too followed the suite to move offshore to places like China.
Another major factor for growing outsourcing involves America's social infrastructure and cost structure which is very different from those countries' where they outsource their work to. In globalization era companies cannot afford to sit back and practice the impracticable. They look at the world as one market and want their product to be on the global front even if that requires them to build their facilities in countries where they outsourced. Perhaps that is one of the reasons why India sees so many American IT giants functioning from Bangalore, Hyderabad and Chennai.
How concerned these companies are towards their country's economy is not a question because they will do all that they need to do in order to keep the profits up. These companies claim that outsourcing helps them save costs and increase profit, which is good as they will pay higher taxes.
Offshore outsourcing" is a stirring reality today, this is the signal of the future, and we just have to go with the flow. America realizes that low cost operation makes it feasible to develop product abroad and ship the finished goods back to the US is a cost saving. The situation grew to such extend that whatever the product may be, there is an effort to ship it outside America to cheaper labor.
There are mixed reaction about outsourcing. So in the age of outsourcing, does it look viable that we go by the books and apply old rules? Your take on this Senator Obama!
