Question

Explain how outsourcing has impacted both the countries that outsource work and the countries receiving outsourced jobs.

Answer 1

1. Impact on Outsourcing Countries: Outsourcing has led to job creation in countries like India, China, and the Philippines, offering cheaper labour and skilled workers. However, it has also faced resistance from job-seeking youths in these countries.
2. Comparative Advantage: The low cost and availability of skilled labour in outsourcing countries provide a comparative advantage, making outsourcing a viable business option.
3. Migration Trends: Outsourcing has reduced the outmigration from countries where jobs are available, as new opportunities lower the need for people to seek work abroad.
4. Emergence of KPO: Knowledge Process Outsourcing (KPO) involves highly skilled workers and has become a new trend in outsourcing. It focuses on research, e-learning, legal services, and other high-skill areas, creating additional business opportunities.