Off shoring

The Internet facilitates the export of jobs from high-wage to low-wage nations. Business processes from help desks to the analysis of x-rays by radiologists can be sent off shore as can software development and data processing. As network costs fall and people become trained, off shoring and outsourcing of information-based services will become more attractive. As shown here, India and Ireland are world leaders in this area. They are also pioneers. Tata Consultancy in India was perhaps the first exporter of programming services, and Ireland pioneered software localization and distribution in the early 1990s. The governments of both nations have taken many steps to encourage training and build service exports.

The possibility of off shoring raises many questions, for example:

  • Will the US and other developed nations lose jobs?
  • Will corporations in the US and other developed nations become more profitable?
  • Will the world become a more equitable, just place?
  • What should be the government response to this trend?
  • Is off shoring a significant portion of total services today?
  • Is off shoring difficult to manage?

    Resources

  • An early article on offshoring of software services to India, Ireland and other nations.
  • Pixel Corps is trying to train the next generation of offshore media developers.
  • Interview of an outsource firm owner.
  • Article analyzing the value added by organizations working on the Apple iPod.

Source: McKinsey and Company, The Emerging Global Market: Part II -- The supply of Offshore Talent in Services, June 2005.

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