Social Effects of Outsourcing

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There is no denying that outsourcing is a major phenomenon on a massive global scale. The Information Technology field is a major contributor to global outsourcing. Outsourcing is currently a major social and political issue in the United States. At stake are thousands of jobs ranging from help desk operators to software programmers. The financial impact outsourcing has on the global economy is also a key factor. The advancement of information technology has spurred many high tech corporations and start up companies within the last few decades. The advent of the internet opened the world to online business technology and commerce while simultaneously fueling globalization. Private companies began to appear on the internet in the nineties, contributing to the expansion of their businesses and services on the world market. The late nineties brought the dot com boom to the forefront with internet companies prospering and expanding their operations. The burst of 2000 essentially ended the boom and soured the economy, particularly in the technology sector. As time passed, companies recognized the need to cut operating costs, reduce personnel and save their resources. Hence, outsourcing came to the forefront as a way to stay competitive. Developing nations like India and China have come to light in recent years as they have a wealth of computer engineers and programmers who will work for low wages. Outsourcing has become such a common practice that it is now considered a benefit to the world economy “We know that outsourcing is a $400 billion a year industry and IT outsourcing is a vital part of the industry. A slump in IT outsourcing would mean a loss for the global economy.” (Ghimire) The world must accept that outsourcing is a major staple to the world economy. However, with every step forward, come two steps back. Companies continue to outsource jobs overseas, leaving thousands jobless in the United States. Companies have emphasized costs cutting and profits rather than focus on the social change outsourcing has done to American Society and the economy. The era of technological outsourcing has essentially lowered the Information Technology talent significantly, as far down as the college ranks. In 2004, nationally, enrollments in computer science and computer engineering were down 23 percent that year. At MIT, the premier engineering school, enrollment in electrical engineering and computer science has fallen 33 percent in two years. (Roberts) The IT industry, particularly in the manufacturing field has suffered many job losses due to irrational outsourcing. As one of the largest industries in the U.S over the last twenty years, this has as still impacts the economy today. As the economics suffer a downturn, the effects also carry on to the families as well. We come to a point in our society where we must ask ourselves whether outsourcing’s economics and staying power is more of social importance then the moral dilemma of shipping American jobs overseas.

The standard of living in today’s modern world is without a doubt high and boisterous. The number of industrialized countries has skyrocketed in the last half century and many more countries are still developing. The information technology age of the twentieth century has literally developed the world into a connected and networking society. Outsourcing of this technology to other countries has given them an edge of completion over the U.S. and other rich nations. Many speculate on the benefits of a globalized society. The advancement of technology is the key factor in the development of the industrialized world. Computers allow industries, businesses and nations to interlink with each other to further trade through instant information. Countries are able to open their markets on the world stage and compete globally. As competition grows globally, so does the spread of technology. A Globalization and Growth study showed various developing countries around the world...
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