The Relation between Offshorcing and Outsourcing

Offshorcing developed from outsourcing certain uncomplicated IT software programming tasks to low-economy countries, such as India. It was preceded by outsourcing numerous call centers and back-office tasks, and was most appreciated by the financial industry. According to the surveys, the largest clients of outsourcing and later Offshorcing services are mainly concentrated in the US and the UK.

In the USA there is now a lot of debate on whether outsourcing and Offshorcing should be further implemented or should there be some bans or restrictions concerning the activities. The benefits from outsourcing and Offshorcing are familiar to practically all American firms, as many of them seek to urgently decrease their operational costs.

Very many businesses have already tried outsourcing and Offshorcing, and still many intend to implement the two new cost saving techniques in the nearest future. However the final result of outsourcing and Offshorcing will really depend on how the whole process is managed in the future. Just like in most activities, there will certainly be advantages and disadvantages of outsourcing and Offshorcing for the USA and the UK. The most unfavorable possible disadvantages are: the large rate of unemployed IT and other technical specialists, the reduced income taxes for national, state and local tax institutions, movement of investment capital and intellectual property abroad, increasing trade deficit of goods and services, dependence on foreign sources in terms of consumer products and even defense weapons systems.

Some agencies are especially concerned that outsourcing and Offshorcing of engineering, IT outsourcing and other high tech jobs can seriously ruin the leadership of the USA in terms of technology and innovation. This is one of the most serious potential hazards and may have tragic results for the country’s national security and economic excellence. If the trend of outsourcing and Offshorcing remains stable, then the lessening number of jobs and decrease of wages will take place, which will definitely retain several America’s talented young people from studying science and engineering.