Outsourcing is good for economy
...esigning and manufacturing widgets, but we are skilled with managing information technology. We will sell you the IT services that you require, and you can pay us periodically with a minimum commitment of two years.” Today, EDS is a multi-billion dollar company with over 70,000 employees and is only one of many global BPO firms. Outsourcing can be a management tool to assist business to develop in the non-core areas in firm where they can get best return on their investment. For example: High cost payroll departments or accounting, internal weaknesses in management or shortcomings and limited capacity are areas where outsourcing opportunities exist. Outsourcing practice has led companies to save millions of dollars by focusing on their core businesses and firms have benefited immensely by not worrying about companies non-core practices. Many BPO firms are located in developing nations and that has an upper edge of finding low-wage skilled workers who can do the same job for half of the cost. Survey by the Earth Institute at Columbia University, shows that workers in Asia and India have better skills than their American counterparts. Today, American consumer wants the best products at the lowest prices. Therefore, it makes sense to outsource jobs to cut costs. But is the loss of American jobs worth the cost cutting? Many economists believe that it is worth it. They argue that American economy has seen this kind of trend when American mill workers were displaced in 1980’s due to garment companies outsourced their jobs to other countries. Today, ninety percent of cloths are made in foreign countries. The United Nations Conference on Trade and Development (UNCTD) says that developed nations such as the United States benefit more from outsourcing than do developing nations such as India. Saving money and finding better skilled workers for businesses are always a positive statement. Today, eighty percent of fortune 500 companies are using BPO firms to handle their non-core business affairs. Saving money has led the corporate America to invest more in R&D (Research and Development) and that leads to more advance new technology innovations. Other countries are now investing in America. Data shows that outsourcing has created a more jobs in America. According to figures released by the US Department of Commerce, new foreign direct investment (FDI) in the US totaled $82 billion in 2003, over twice the amount from the previous year and created a million more jobs. The Organizat...