India: Outsourcing of US Jobs and Economy

external image indian-call-center.jpg


By: Janel Davis , Israel Cruz, and Kaityln Garcia

Our history of outsourcing to India
(By Janel Davis)

What is outsourcing? To outsource is to simply send out a job to or obtain goods from an outside supplier or source (dictionary.com) According to outsource2india.com, 'outsourcing' is the process through which one company hands over part of its work to another company, making it responsible for the design and implementation of certain business process under the requirements and specifications of the outsourcing company.
Globalization in India began in the 1990’s. In 1994, the Indian government announced a policy under which the Indian telecom sector was liberalized and private participation was encouraged. Then in 1999 the “revolution began” due in part to the ‘New Telcom Policy’ which ended the state monopoly on international calling facilities. That is when the call, telemarketing, and data processing centers were born, and American outsourcing to India began. The outsourcing as expanded during the last decade. Not only are telemarketing and data processing calls being outsourced, but also health care, photo editing, financial services, and teachers are even sending their student papers to India to get graded.
Busy Indian Call Center (www.theworldonline.ae/wp-content/uploads/2009/01/callcenter3.jpg)
Busy Indian Call Center (www.theworldonline.ae/wp-content/uploads/2009/01/callcenter3.jpg)

Why outsource?
Outsourcing is much cheaper for American companies but also for consumers. CBS reporter Rebecca Leung states that outsourcing “..may have cost hundreds of thousands of American jobs, but it's made American products more affordable.” College graduates in India are willing to work for a fraction of what many American graduates expect, so companies are flocking to them to help expand their businesses.

Outsourcing’s Impact On the US Economy

(Info by Israel written by Janel)
How big is the impact?

Many companies defend outsourcing because they say it helps them and their consumers save money, but the question is, what impact is outsourcing having on the US economy overall? 3.3 million jobs. That is the estimated amount of jobs expected to be lost by 2015 according to a recent report by Forrester Research. That sounds like a lot of jobs that will be lost just to call centers and technology jobs, but it is not just technology jobs that are being lost in India. Deloitte Consulting has reported that approximately 2 million jobs will move from the United States and Europe to cheaper locations such as India in the financial business alone. Deloitte forecasts that three-quarters of financial
One of the many Fortune 500 companies that outsource
One of the many Fortune 500 companies that outsource
institutions and investment banks will allocate tasks to third world countries in the next five years, and that India will be at the top of the list. Many might be wondering what companies are outsourcing. It is more than people think. Frontline World reported last year that over half of Fortune 500 countries such as Dell, HSBC, American Airlines, American Express, and many others, are moving jobs across seas. The US Bureau of Labor Statistics reported the job separations due to outsourcing are at their highest level since 1995. So even though many Americans have not yet noticed, outsourcing to countries such as India is having a major impact on the overall US economy, and the impact is only going to increase within the next decade.


Outsourcing's Impact on the Indian Economy
(Info and writing by Kaitlyn Garcia)


Outsourcing has made a huge impact on the Indian economy. Outsourcing has boosted the economy greatly because of all the job opportunities that it has brought to the country and by the many of thousands of people it has employed. Outsourcing has helped build an infrastructure in the country that was once crumbling. Outsourcing has also brought many opportunities to women and it has liberated them from some repression that was once a factor. The Outsourcing of jobs has boosted the national economy and it is predicted to be the twelfth largest economy on the world by 2025 according to a study done by Goldman-Sachs. However there are some downsides to th
A growing economy means a growing India. A new mall in downtown Bangalore (http://farm3.static.flickr.com/2322/2069729925_8b192a68e9_b.jpg)
A growing economy means a growing India. A new mall in downtown Bangalore (http://farm3.static.flickr.com/2322/2069729925_8b192a68e9_b.jpg)
e rapid economic growth that India is experiencing. One problem is that the economy is groeing so fast and there are so many people that live in India that the wealth among them is quickly becoming unequally distributed. The rising growth of poverty has also had a negative impact on the economy. Outsourcing does have its pros and cons the pros according to the Indian government outweigh the cons. Outsourcing has created a boom in the Indian economy that will last for several years.



The Future of Outsourcing
(info and writing by Kaitlyn Garcia)

Many are afraid that if the US keeps outsourcing jobs to India that there will be no more jobs left in America for the future generations. Corporations are working on practicing "transformational outsourcing" that when a corporation brings jobs to another country they train the workers extensively to teach them how to interact with customers and how the product works so that they can be helpful and no one will know that they are
speaking with someone in another country. Another fear is that they receive all of the customers personal information that if the corporation were to end their outsourcing of jobs in that country that they could use a customers personal information against them.
Americans protesting IBM outsourcing jobs (http://www.endicottalliance.org/graphics/r2465660638.jpg)
Americans protesting IBM outsourcing jobs (http://www.endicottalliance.org/graphics/r2465660638.jpg)
The government has yet to pass laws that protect the information we give out as customers. Many feel the government needs to pass privacy regulations that our country isn't negatively affected by the outsourcing of jobs. Many think that other nations will follow in the America's footsteps and outsource all traditional forms of work like IT and customer service and manufacturing. In the future many more nations will being to outsource because of rising prices it becomes more efficient for nations that have a high rate of consumerism might become less competitive. Outsourcing the technology centers will shift the technology epicenters from western nations to eastern nations.There are some positives to the future of outsourcing: like the stability created by the supply chains of outsourcing will put pressure on governments to avoid conflict and war.


The Conclusion

(By Janel Davis)
In conclusion, there are many ways to look at outsourcing to India. On one hand, it can be seen as a very positive thing. We as a country are saving money, companies are able to expand, and we are even helping a country that was very down at one time, India, increase their wealth, and even become more westernized. On the other hand however, sending jobs to India can be seen as negative, simply because we are doing just that, sending jobs overseas and preventing many Americans here on the homefront to earn a living. However one feels about outsourcing, they will have to accept the idea because it is here to stay. The relationship between United States and Indian companies can only get better, and as businesses increase, so will the amount of jobs being outsourced, it's just a fact of life.


References
"NOW with Bill Moyers. Politics & Economy. America and Jobs . Outsourcing." PBS. Public Affairs Television, 7 May 2004. Web. 25 June 2010. http://www.pbs.org/now/politics/outsource.html.

"Outsource | Define Outsource at Dictionary.com." Dictionary.com | Find the Meanings and Definitions of Words at Dictionary.com. Web. 20 June 2010. http://dictionary.reference.com/browse/outsource.

"The Outsourcing History of India Is One of Phenomenal Growth in a Very Short Span of Time." Outsource to India - Outsourcing Services and Outsourcing Solutions. Focussing on Business Outsourcing for Global Clientele. Flatworld Soulutions. Web. 21 June 2010.
http://www.outsource2india.com/why_india/articles/outsourcing_history.asp.

"Out Of India - 60 Minutes - CBS News." Breaking News Headlines: Business, Entertainment & World News - CBS News. 1 Aug. 2004. Web. 20 June 2010. http://www.cbsnews.com/stories/2003/12/23/60minutes/main590004.shtml.