Information Technology Offshoring Outsourcing: A Perspective kof Advanced Countries

Abstract

Offshore outsourcing is a term covering a range of information technology (IT) and business services delivered to companies in developed countries by IT personnel based in developing countries. The significant cost savings achieved by the offshore model is the prime factor in its growing acceptance and use. IT software and service outsourcing is becoming a new reality for employers, employees, government and academicians. The widespread use of Internet, standardization of software development methodologies, efficient IT project management techniques, low cost of telecommunications, have provided the necessary thrust for global production of software and services. In this chapter, we analyze the impact of today’s offshore outsourcing movement to the United States economy, education, jobs, wages, and social issues. We suggest that offshoring is a viable economic model. It leads to improved productivity, lower inflation and eventually growth in jobs and wages. The U.S. will also see significant numbers of “in-sourced” jobs because of subsidiaries of foreign based companies. Future job growth in different areas of business and skills, require young students and present IT workforce to acquire them with education and training. Federal Reserve chairman Alan Greenspan has also expressed the need to produce highly skilled workers. The loss of jobs of IT workers is the difficult aspect of offshoring. Laid-off workers should be provided assistance to find a new comparable job, both by the U.S. government and companies. In this chapter, we make some recommendations to reduce, minimize and overcome the hardships caused by the IT outsourcing.