4/13/2006

Outsourcing

I recently read a blog posted by Gregory Mankiw, a Harvard professor, and author of Economic textbooks. Professor Mankiw referred to a comment he made in one of his textbooks which caused a bit of an uproar regarding outsourcing. In regards to outsourcing, Mankiw states, “more things are tradable than were in the past, and that’s a good thing.” The article goes on to mention the importance of facing the challenges which outsourcing will bring. I agree that outsourcing or offshoring is a means of seeking greater efficiency through the market, but I realize it means lots of temporary job loss for countries like the USA.

9 comments:

Billy said...

Some people won’t appreciate this, but I’m going to say that I think that the market determines the value of labor. The jobs that are lost in America to outsourcing are lost because they are priced too high; they are simply priced out of the market. I think outsourcing is cool because it lowers costs for companies that outsource, thus lowering costs for me.

noah said...

I don't think that we should fear outsourcing because in the long run we will all benefit from it. I think that it is hard for us to accept even when we know that in the long run we will be better off because in many cases we can associate the loss of jobs caused by outsourcing to real people, but we usually can't see or measure the greater benefit that all of us as consumers receive.

Dr. Tufte said...

The posts and comments are all good here.

I tend to think this is an issue where there is a lot of selfishness involved.

We get upset when gas stations raise the price of their gas, indicating that we expect them to lower the price for us. Yet, we are appalled when employers have the same expectations of us and our labor.

Sharad Saxena said...

After BPO it's KPO By Sharad Saxena

KPO or Knowledge Process Outsourcing is the new buzzword.

KPO promises to be the next big thing in the outsourcing sector. It's an estimate according to a report by (Global Sourcing) KPO or Knowledge Process Outsourcing business is supposed to touch $17 billion by 2010 of which at least 70 per cent or $12 billion is to be outsourced to India. More then 300,000 new jobs are required from the current 25,000. Many companies are planning to develop KPO segment due to this. The impact of quality manpower and work helps India to receive this much of work. According to a report, for every one job created for a foreign language professional, two new jobs will be created for Indian English-speaking professionals.

Read More at: http://www.iwebconnects.com/kpo.html

Our Services
Interactive Web Connects BPO & KPO, includes services such as Basic Data Entry, Data Research, Web Research, Animation & Website Design, Writing & Content Development, Legal Services & Accounts Support, Web Promotions, Logo-Graphic Designing, Forum & Blog Posting and Many More.

Services: http://www.iwebconnects.com/services.html

Interactive Web Connects
http://www.iwebconnects.com

:Interactive Web Visions --- Cost Effective Web Support Services. said...

Interactive Web Visions --- Cost Effective Web Support Services.

We offer cost effective web support services. We try our best to strengthen your customer interaction using variety of tools. We specialize in supporting your company at back end in efficient way. Many companies are outsourcing their support work to us, Try us once and see the difference...

* E-MAIL SUPPORT SERVICES
* CHAT SUPPORT SERVICES
* BACK OFFICE SERVICES
* WEB RESEARCH SERVICES

Check our Website: http://www.iwebvisions.com

alex said...

"I tend to think this is an issue where there is a lot of selfishness involved."

Precisely!

Dr. Tufte said...

Agreed.

A lot of control issues too ...

Matthew said...

Dr. Tufte said, “We get upset when gas stations raise the price of their gas, indicating that we expect them to lower the price for us. Yet, we are appalled when employers have the same expectations of us and our labor.”

I agree. It's true that selfishness is an issue. Most people are only concerned about how things affect them and forget to look at the big picture. While outsourcing jobs may hurt a few people significantly, it will also help a lot of people a little bit, adding up to quite a bit. Businesses will have lower costs which will help them compete better overseas and will allow them to give lower prices to their customers.

Dr. Tufte said...

To selfishness, I would add asymmetry: the inability to admit that opposite sides of issues behave oppositely.