Offshoring The Future Of Our Economy Essay - 1464 Words

Offshoring: The Future of Our Economy Outsourcing jobs to foreign countries or offshoring is often viewed as the demise of the American economy. A more accurate view of offshoring is that it is the groundwork for the future of our economy. By enabling businesses to conserve costs, grow and have access to a large untapped pool of talent, offshoring is essentially securing the stability of our economy by securing the vitality of our businesses. In order to remain or become competitive in todays economy, US based companies must outsource jobs to foreign countries. The cost savings that can be derived from hiring employees in underdeveloped countries such as India or China are astounding. According to Agrwa and Farrell (2003), For†¦show more content†¦Francillon, personal communication, April 27, 2006). If a company were to choose China for their offshore location, they would have no employer healthcare costs because the government of China provides social medicine for its citizens. Employer sponsored healthcare coverage is one of the highest priced benefits an employee received. The cost of healthcare is only topped by federally required benefits, such as FICA, federal and state unemployment and workers compensation. The cost of federally required benefits in 2004 added an additional $2.07 an hour to an associates salary (EBRI, 2005). Of course, these costs do not have to be paid when the employee lives in another country. The most innovative companies in the world, while very different in service and style, share one common factor. They all outsource jobs to foreign countries. According to an ongoing survey from the Offshoring Research Initiative, growth is rapidly gaining on costs savings as the most common reason companies outsource. Growth is the goal of all companies. Growth creates profit, and profit creates more growth. For example, Apple saw stock returns of 24.6% between 1995 and 2005 and it is no surprise that their margin of growth in that same timeframe was 7.1% (McGregor, 2006). At IBMs innovation themed leadership forum last April, a man named Sunil B. Mittal gave a speech explaining how he created growth in his telecom company by outsourcing all functions with the exception ofShow MoreRelatedThe Negatives And Positives Of Offshoring1012 Words   |  5 PagesIn this paper the negatives and positives of offshoring are discussed. Offshoring has become a way of life for many businesse s. It is widely accepted that offshoring is a strategic business decision. Many organizations are taking advantage of these opportunities because of the benefits to them and their customers. In order to compete with other companies many businesses are finding it necessary to outsource to other countries. Offshoring has produced some economic benefits but it has also createdRead MoreOutsourcing Is An Alternative For Modern Economic Development1031 Words   |  5 Pagesonly manufacture products in other countries, but also employ and develop jobs in other countries in which reality should be available in the United States. Outsourcing as it may seem beneficial to the companies that employ it, actually harms the economy by decreasing the job market that is present in the United states. Offshore outsourcing has a strong potential to affect a variety of jobs ranging from low paid low and skill jobs to high paid and skill jobs. A princeton economist had predicted thatRead MoreEssay on Offshore Outsourcing1661 Words   |  7 PagesOutsourcing Currently, it has been reported that many of our jobs, as much as one out of every three private-sector jobs are being sent overseas. What is offshore outsourcing? Outsourcing occurs when a firm subcontracts a business function to an outside supplier. 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Outsourcing helps a company focus on those things it does best and hence increase its top line revenues while reducing costs. Outsourcing has provided organic growth to the United States corporations and enabled them to compete more effectively in global markets. This paper seeks to explore what outsourcing is, what the difference between outsourcing and offshoring is, what effects it has on individuals, firms, countriesRead MoreMy School Of Media Arts And Design821 Words   |  4 Pageswere to a capitalist economy, or that I could apply my skills as a fraud examiner for the FBI. The more I learned ab out the profession, the more I learned about the significant role accountant’s play in today’s society. As I continued my studies in accounting, my teachers emphasized the importance of accounting in our economy. I learned how integral accounting is to the business world. Without accountants, the investing public would have no trust in the capital markets, and our stock market wouldRead MoreReassessment of International Instruments in the Field of Migration1026 Words   |  5 Pagesof ethnicities and cultures, mixing of which with the ethnic groups and cultures of the host countries may not always have predictable effects and features. At the same time, according to many experts, neither North America nor Europe in the near future are able to do without a constant inflow of immigrants from as far east as Asia, as far south as Africa and Latin America. A direct consequence of the large-scale migration has been the actual formation of multinational states, accompanied by the