The Economics Behing Offshoring
thierry | August 30, 2011According to The Economist, “as the information technology industry’s emphasis is shifting — away from innovation and towards execution — so is its location.” More specifically, information technology (IT) jobs and resources have been moving overseas due to the combination of US software producers’ need to cut development costs and the large and inexpensive labor pool that exists in countries like India. The result has been the creation of an international supply chain for the IT industry similar to what the manufacturing industry developed in the 1970s.
This article is already dated 2003 … I would be interested to here if anyone thinks there has been much change since. From my perspective I would think there has been a re-balancing going on and especially since the 2008 Economic and Market crash. Second tier cities in the US as well as entry level IT workers are now more properly “utilized”, also rising wage inflation in the developing world combined with currency devaluation in the US and potentially Europe will strongly re-balance the competitive field. Still a nice synthetic overview of the Industry´s principle based on Economic rational, observation and common sens.
1. Economic reasons and historical perspective of Offshoring
2. Impact on the Labor market both in outsourced and outsourcing regions.
3. Jobs least and most likely to be outsourced
etc …
