Outsourcing: A Review of Some Literature

Article Summary: According to an article in Economist, outsourcing to other countries has become a hot political issue in America. President George Bush's chief economic adviser told Congress in January 2004 that if a product could be produced more cheaply abroad, Americans were better off importing the product than producing it at home. This is the essence of the law of comparative advantage. Although America's economy has lost jobs since the start of the decade, the vast majority of these job losses are cyclical in nature, not structural.

Outsourcing accounts for a tiny proportion of the jobs constantly being created and destroyed within America's economy. Even though some IT tasks will be outsourced, many more jobs will be created in America and those jobs will tend to be higher paying than the order entry and customer support jobs being lost. A report by Forrester Research, a well knowing consulting company, estimated that 3.3 million American service-industry jobs will have gone overseas by 2015. The article in Economist suggests that this is barely noticeable when you think about the 7 to

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