There are many reasons why a business may choose to outsource a particular task, job or a process. I’ve been reading articles about Outsourcing. This one tackles how outsourcing affects the global economy. Here are some snippets from it.
While the delicate nature of outsourcing will always provoke controversy, there are actually numerous benefits to the global economy. To analyse these more closely, it is a subject that is better addressed in terms of benefits to the local economy and the foreign economy, the former being the western economy who will outsource to the latter foreign economy.
➤ The impact of outsourcing on the local economy
The immediate argument that springs to mind whenever outsourcing is mentioned is the inevitable loss of local jobs. And yes, while this is a concern, there are many tangible benefits that can be realised by outsourcing to another country as well. Outsourcing is usually considered in an attempt to reduce costs and make a business more efficient; thus, in turn, making it more competitive. Furthermore, a more competitive local business will appeal far more to potential investors, whose investments will ultimately drive greater growth in the local economy as the business expands.
➤The impact of outsourcing on the foreign economy
Outsourcing also affords much growth in the foreign economy because of the influx of new money. Individuals who are working on an outsourced contract from another country inevitably have more money to spend. This means that they can buy products and services from other sectors in which they wouldn’t usually shop, ultimately giving them a boost. Perhaps the biggest win-win aspect of growing foreign economies is that they develop into potential future business partners for western nations. Their stronger economic standpoint allows them to conduct business on an international level and purchase products and services from the very nations who outsourced to them in the first place. Again, this is an example of the benefits of outsourcing going full circle.
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