Examine the Geographical Consequences of International Outsourcing Essay

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Examine the geographical consequences of international outsourcing. International outsourcing, which is contracting services to an offshore, rather than a domestic, company, has become a growing source of contention. This outsourcing occurs when some aspect of a business operation is contracted out to an external company. It has become a popular management tool in recent decades as companies continue to identify things done best by its own employees and then contracting out services that can be handled more cheaply or efficiently by a specialist contractor. Due to this, companies that do engage in international outsourcing face significant geographical consequences for both host and source countries. One of the main expansion of international outsourcing is the ICT sector, otherwise known as information and communication technologies. As communication such as video-conferencing capability have improved, outsourcing ICT work to offshore destinations have developed to a point where software can be developed independently of location provided connections are adequate. The outsourcing destinations favored by US and European software developers include China, Korea, Mexico, and India. The geographical consequences of international outsourcing can clearly be found in India where the software export industry is worth more than 1 billion dollars each year. The number of companies in MEDCs that have outsourced their software by subcontracting has increased rapidly. While there is an increased employment in the emerging host economy, in this example India, there has been a loss of jobs in source economies such as the United States. In the social aspect, this is met with criticism, especially by software engineers in western countries that lose their jobs to overseas workers. In fact, a University of California study concluded that 14 million white collar jobs are

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