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Examine the geographical consequences of international outsourcing

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Examine the geographical consequences of international outsourcing. International outsourcing, which is contracting services to an offshore, rather than a domestic, company, has become a growing source of contention. This outsourcing occurs when some aspect of a business operation is contracted out to an external company. It has become a popular management tool in recent decades as companies continue to identify things done best by its own employees and then contracting out services that can be handled more cheaply or efficiently by a specialist contractor. Due to this, companies that do engage in international outsourcing face significant geographical consequences for both host and source countries. One of the main expansion of international outsourcing is the ICT sector, otherwise known as information and communication technologies. ...read more.


While there is an increased employment in the emerging host economy, in this example India, there has been a loss of jobs in source economies such as the United States. In the social aspect, this is met with criticism, especially by software engineers in western countries that lose their jobs to overseas workers. In fact, a University of California study concluded that 14 million white collar jobs are vulnerable to being outsourced offshore. At the moment, Corporations in the U.S. and Europe will move an additional 750,000 jobs in IT, finance, and other business services to India and other low-cost geographies by 2016, according to new research from The Hackett Group. What this demonstrates is that outsourcing forces negative impact on the job outlook in the source country as there is more competition with foreign workers. ...read more.


In addition to this, there has been a correlation with a real-estate bloom. Rapid development in the area has transformed the landscape of the Kharadi-Kalyani Nagar belt. Land developers have created top-end residential units. The coexistence between shanty huts and modern high rise housing, however, demonstrate that the needs for the local population are not the same for the software developers. Overall, international outsourcing is attractive for businesses because of the cheaper cost of labor and same output. Information and communication technology is one section of the economy that has become largely outsourced to overseas host countries. This has brought geographical consequences including the loss of jobs at the source country and positive consequences such as infrastructure development in host nations. In the future as population for many developing countries start to increase, the outsourcing of jobs may become more prevalent. ...read more.

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