OutsourcingUS to India and Beyond
...many sections of there businesses for either ¼ or ½ the cost, while still maintaining there great support. Or are they? Microsoft, IBM, Yahoo, AOL, and others are moving many parts of the firms over to India where they can hire a support firm which will pay technical support people less that half of what we are currently receiving for these jobs. Currently industrial analysts say that the Global Outsourcing market, which is one of a political hot potato for this year up coming Presidential Election, is worth 300 million to 350 million, with the possibility of growing to 500 million by 2007. Nearly 6 million jobs, mostly in the high tech sector are expected to be move from the US and Europe over the next 10 years as firms continues cost-cutting drives and the baby boomers generation retires. There have been many debates and articles written either claim outsourcing will hurt the US or it will help it. Michael Evans, Outsourcing Could Hurt, help the U.S., explains some of the wages, quality and consumer savings placed on companies when they outsource. Sure consumers would benefit buy good and services because it would be of a lower cost but on the minus side, many people will lose there jobs and be forced to find other employment which will most likely be lower that what there current pay scale was. Not just in technology is outsourcing happening, but even in sectors such as Textile. Evans shows how even in the textile industry how during the past decade U.S. based jobs for this industry has dropped near 500,000 as many manufactures move overseas. However, the only good thing about that is that now U.S. consumers have seen a drop of 2% a year on the cost because of foreign trade. We have saved some 66 Billion in 2003 alone because of the outsourcing of textiles. Many feel that outsourcing may help create U.S. jobs. Study’s show that U.S. companies use of foreign workers lowers costs, increases labor productivity and produces incomes that companies can use to expand both in the U.S. and abroad. This one study was commissioned by the Information Technology Association of America, an industry membership and lobbying group, which hired the economics consulting firm Global Insight Inc. of Lexington Mass. The study claims that twice the number of U.S. job are created then displaced, producing wage increases in various sectors. Spending for global outsourcing of computer software and services is expected to grow at the same time a compound annual rate of almost 26% increasing to $31 Billion in 2008, or 6.2% of all information technology spending by U.S. companies – from about $10 Billion in 2003. Another conclusion from this study is that savings from lower wages, among other things are estimated to grow to $20.9 Billion from $6.7 Billion. The savings we will get from lower wages will allow the creation of 317,000 U.S. jobs by 2008, including construction, education, healthy care and financial services. As of 2003, 104,000 jobs were displaced because of outsourcing, the study concluded. IBM, hiring in Calcutta, AOL, sets up software center in India, ETC... All over the news and in the newspaper we constantly see more and more companies from the U.S. sending jobs overseas to differently countries. Whether is be fore cost-cutting, downsizing, or just plan they feel like it, outsourcing seems to be the way of the world; or is it. Does outsourcing open doors for more global communication between countries? Does outsourcing allow U.S. firms to reap profits and just become richer? Yes and no. Yea, outsourcing is a very good way to cut costs and keep a company from going under, but it is always at the expense of the “little guy”. I myself can relate to outsourcing. As of Oct 1, 2004, my company will be closing one of its departments and moving to outsourcing. One difference is that our outsourcing is not oversea, but in the U.S. However, many people are being affected by it and all this move will do is allow, in my eyes, is the big wigs to continue getting there nice yearly bonus’s. I was one of the lucky ones and was not affected. I did however see how th...