Liz Gonzalez – Thomas Friedman: The Other Side of Outsourcing
Keywords: Accent Centralization, Glocalize
In light of the information technology revolution, the world is getting smaller and the global economy is getting bigger. Technology has made communication between foreign countries instant, cheap, and easier. Globalization serves as proof that the world is moving towards a community of one. Out sourcing of American jobs has become a heated topic at home. Thomas L. Friedman has written various books on the topic of globalization, as well as various documentaries. I will further analyze how technology has facilitated globalization, as well as the pros and cons of it as stated in Thomas Friedman’s “The Other Side of Outsourcing.”
The World
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One of the most popular reasons jobs are outsourced is for cost savings. A company can benefit from saving on the cost of labor and on U.S. taxes. Businesses also benefit in receiving top talent for a lower cost. Out sourcing has made the talent pool a global one, providing access to people with specialized skills. This can result into efficient, fast results, expediting the supply chain process as stated by Rajesh Rao in the “The Other Side of Outsourcing.” As seen in Bangalore technology training starts as early as childhood, allowing for room to develop a specialization. The outsourcing of jobs has helped develop nations such as Indian, and has given the youth opportunity to make three to four times the money than they would have made elsewhere. These opportunities have decreased poverty and new global consumers have emerged. As stated by Rao there are 300 million middle class people in India, and every dollar made in India can create global prosperity. Globalization also has helped to release tension among nations, as it did between Pakistan and India. The high tech community stressed the importance of creating peace with …show more content…
Although I live in America and have made my life here, I personally have seen how it changed my native country, Dominican Republic. Most of my family back home work for American companies, and make five to six times more than the average professional. Some of my family members work in call centers, and a few of my cousins are consultants for American owned businesses. Globalization has shaped and changed my family’s lifestyle, in the Dominican Republic. We also rented some of our fields and crops to American business and gained greater profits than any local company would have paid. Being that I live in America, I do recognize the impact it has had on the job market. It took me 2 years after graduating college to finally land a job in my field. Many of the entry level positions are now being outsourced, and that is hurting the recent college graduates. So in a sense, I too have been impacted by the outsourcing of jobs. Given how tough the job market is today, it is forcing us as Americans to become more competitive. This is one of the main reasons I decide to go back to school and get an MBA. Perhaps as a nation we have become complacent; with the world getting smaller we will have to work harder to prove we cannot be
Offshoring American jobs have positive and negative consequences to the American community. Some of those consequences of offshoring American jobs include Amer...
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
In the article Your Local News, Barbara Ehrenreich provides her personal and professional insights into outsourcing, starting with a newspaper in California that has begun outsourcing the writing of even some of its local stories. In the article The Rise of the Rest, Fareed Zakaria looks back on history to see how we arrived at globalizing and he examines the present through myriad examples and data to then consider the globalized future with “the rise of the rest.” Zakaria’s article better helps understand Ehrenreich’s insight about outsourcing. With the help of Zakaria we better understand Ehrenreich’s outlook of outsourcing.
Mankiw and Swagel (2006) argue outsourcing is not as large a phenomenon as the media describes. Their research indicates outsourcing accounts for very little of job loss in the United States, nor has it made a distinct contribution to the slow rebound of the labor market. They go on to propose that increased overseas employment has actually contributed to higher employment in parent United States companies. They reported that while 30,000 jobs were lost per month in 2004, two million job changes per month were happening as well. They reference the Bureau of Labor Statistics when they report that in 2015 there are expected to be 3.4 million jobs outsourced, but 160 million jobs gained here in the United States. They also claim that there is a rise in net US income by 12-14 cents per dollar of outso...
Outsourcing is a complicated and a multifaceted subject that involves a “business[’s] purchase of parts or labor from another company rather than maintaining a sufficient enough number of its own employees to do the same work in the country where the company is already based” ("Outsourcing"). The first practice of outsourcing was in medieval times when “nation-states called in soldiers-for-hire to help their own military forces during ongoing conflicts” ("Outsourcing"). Many think of outsourcing as a one way trade of production facilities moving outside of a companies locale but in actuality it is a two way trade that also involves companies from other areas moving their factories to local areas where conditions are beneficial for the specific business. Outsourcing has evolved but the main idea has remained the same. The recent increase in outsourcing “was initiated by Wall Street pressures on corporations . . . . for increased profits . . . in the production of goods and services marketed in the U.S."(Roberts).
Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270). Both sides can also agree, however, that U.S. jobs are lost as a result of outsourcing (Ahmed 192), as well as environmental damage being cause due to corporations taking advantage of loose environmental regulations (Marquis 39). Upon digging deeper into this debate, one can find that both sides present very convincing arguments.
Outsourcing emerged on the financial arena during the 1980s and has since then been spreading. Outsourcing production was furthered with the process of globalization which provided a new component leading to the strengthening of resources, skill and labor specializations across the world. The process of outsourcing is using the skill and abilities of a third-party to accommodate society on the foundation of labor. As stated earlier, it was during the 1980s that the process kicked off mainly due to the efforts of corporations when they began to hire labor forces across the world. Even though outsourcing has come out from its developing stages, there are still following effects on the US economy.
As the problem of job outsourcing becomes more of an issue in politics, elected officials like the President and Congress will no longer be able to ignore the dilemma. The war in Iraq has been at the forefront of the presidential race but the importance of outsourcing American jobs seems to have been slightly overshadowed. If the issue of outsourcing is not watched carefully and a definitive plan hammered out, a trickling down of negative effects may occur within the U.S. economy. However, there is a polarized opinion on the effects of this “phenomenon”.
The world is growing increasingly competitive, with newer technologies making the earth seem to shrink in size. Now this isn't literally of course but figuratively. Information can be shared faster, and at a fraction of the cost that it used to. Therefore this newer technology has flattened out the world, Thomas L. Friedman stated that “ Every young American today would be wise to think of himself or herself as competing against every young Chinese, Indian, and Brazilian.”. Globalization makes it easier for people to connect and share their ideas. It also makes it easier for people to travel to work and connect with their co workers who may be hundred of miles away. Globalization is bringing the world closer. When competing for a job one may be competing with an Indian or Brazilian and whoever has the most education will get the job. Moreover it isn't local competition anymore it’s now on the global level, whether its offshoring the job or having the employee move. Friedman stated that “…data entry to securities analyst to certain forms of accounting and radiology that were once deemed non tradable are now tradable.”. More and more jobs can easily be off shored to a Chinese, Indian, or Brazilian who is more qualified than an American. Furthermore the likely hood of offshoring is increasing and so is the level of education one needs to have the job they want.
Outsourcing has been around for many years. In this paper I will discuss some of the history of outsourcing, the goods things about outsourcing, and the bad things about outsourcing.
We say that we are heading toward a more global economy because of the fact that competition in today’s markets is global. This means that corporations in the United States can compete in foreign markets and vice versa, therefore U.S. corporations and foreign corporations become interdependent and thrive off each other. This can have a good impact on the United States because it allows U.S. corporations to seek materials and labor outside of the U.S. in countries such as China, India, and Mexico, where workers are paid a lot less money than U.S. workers, thus allowing them to sell their products for significantly cheaper than if they were produced in the U.S.; however, the tradeoff is that many American workers in the industrial sector lose jobs due to this shift of labor to overseas. In the long run this will be beneficial for the U.S. and although some percentage of workers are losing work, new jobs in the services sector, in fields such as computer technology, telecommunications, and language skills are opening up and experiencing growth because of this change.
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
When Americans hear the word “offshore outsourcing”, they automatically assume that Americans are losing their jobs to foreign countries. Most of these jobs that companies outsource such as the garment industry jobs are offshore outsourced because they are labor intensive jobs. According to Timmerman
The interrelation and the integration of people, companies, governments and nations can be described as globalization. Globalization was produced due to international trade and investments with the help of technology. In today’s world, globalization is very essential. Advancements and technology help the process needed for globalization. Many countries and organizations similarly are affected by this phenomenon, on the other hand, smaller countries have benefited from larger contributors to the world’s market.
Economic globalization has changed the perspective on life today. More low class and middle class citizens are able to have access to food and shelter, unlike the past where high class citizens almost everything, while the low class citizens are living in harsh conditions. As many people have a good life, they are able to have a chance to develop advance our technology today. For example, transnational corporation like Facebook and Skype creates real-time conversations online, which is amazing compared to the past where it would take days or even weeks to communicate with the other person when they are somewhere else. Economic stability has been a problem in our economy since the Great Depression, but as we experience them we are able to learn from it and not make the same ...