Monday, July 25, 2005

Benefits of outsourcing to India


The benefits of Outsourcing to Americans show that the Consumers are provided with the services they demand, at lower prices. As many businesses themselves purchase services, their lower costs will result in savings that can be passed on to consumers. If a capable radiologist in India can read x-ray pictures at a quarter of the cost of doing so domestically, important health- care services can be delivered at lower cost to everyone, putting a brake on exploding medical costs.U.S. exporters of goods and services are benefited from the extra income generated abroad. The outsourcing of services to India counts in the U.S. balance of payments as an import of services. If we are going to start importing large amounts of such services, these imports must be paid for by exports of something. The dollars being spent by firms to purchase these services will come back to the U.S. either in the form of demand for U.S. goods (our exports to India) or foreign investment in the U.S. As McKinsey has noted, "[service] providers in low-wage countries require U.S. computers, telecommunications equipment, other hardware and software. In addition, they also procure legal, financial, and marketing services from the U.S."

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