From: mackinac
Outsourcing itself is nothing new. U.S. companies and governments have been outsourcing domestically for decades by contracting out such services as payroll, database management, and janitorial services. The new twist has been the recent increase in foreign outsourcing, or offshoring, in which companies buy services from foreign-based providers. Foreign outsourcing has been made increasingly cost-effective because of the personal computer, which has digitized much of our work, and high-speed and deregulated transmission of that information through broadband and the Internet. Informational technology (IT) companies are increasingly outsourcing routine programming, data entry, and system monitoring. Call centers are shifting more of those thankless jobs abroad.
Foreign outsourcing almost certainly benefits the U.S. economy in the short run as well as the long run. Like more conventional forms of trade, foreign outsourcing allows U.S. companies to dramatically cut the cost of certain information technology services. As a result, U.S. companies become more competitive in what they do best, their “core competencies.” Better and more affordable services become available for consumers and taxpayers. Outsourcing allows companies to operate on an around-the-clock, “24/7” production cycle, further adding to productivity. Outsourcing is even making possible work that simply wouldn’t exist otherwise, such as chasing down delinquent accounts receivable that were thought to be beyond collection.
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