Outsourcing by the End of Term Paper

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Offshoring is occuring across a variety of job functions in areas such as IT, manufacturing and the service industry. Functions that easily be digitized or handled by phone or that involve skills that are available or easily developed are all fair game (Hoffman). The range of functions is substantial and increasing over time. Currently, major areas are depicted in Figure1, Offshoring Opportunities Across the Organization. According to some experts such as Baker and Kripalani (2004), while the lower-skill sets are being outsources, there is still a global marke palce for high-quality professionals. As an exampe, the authors point out that the IT industry where of the six types of software professionals, architects, researchers, consultants, project managers, business analysts and basic programmers, only basic programming jobs are being outsourced to offshore operations. Therefore, Baker and Kripalani deduce that America will still remain the supreme source for application development because of tis diverse and talented workforce and that American innovation will create the new products, processes and markets that will result in a net increase in the American economy.

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Source: Hoffman, M. Offshoring - Is it a win-win game? Global Issue

Personally, I believe the outsourcing is a necessary evil for America to survive in a global economy. If it doesn't take advantage of lower-cost resources, other countries that do so will have a significant competitive advantage. However, I don't quite buy the arguments that American workers will be better off as a result of higher productivity and that only low-skilled employees will be impacted. As productivity increases, it's not clear which workers will fill the increase in demand for labor, Americans or foreign workers. Because there appears to be an abundant supply of foreign labor, the real question is if rising productivity at home will be enough to offset the advantages outsourcing to foreign countries can offer in terms of net cost savings. And, the sophistication of skill sets in countries that are reaping the benefits of outsourcing are bound to increase with time. Unfortunately, this does spell bad news for American workers......

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