Globalization of Outsourcing

Now that the world might be pulling itself out of the last recession, some of the things that were learned to save money should stay in place. When it comes to the labor market, the downsizing and closing of many businesses transformed many workers from being unemployed to becoming freelancer. The shifting of work by businesses from in-house to outsourcing is part of that trend.

The shift to outsourcing by business and the establishment of a freelance network started some years back. 5 years ago, the Wall Street Journal ran a story on how retirees were moving to 3rd world nations where the cost of living was less expensive. While there, they used their skills and contacts to work as freelance artist to supplement their income. By living where it is less expensive, the retired freelance artists are able to keep their prices low but maintain a high quality of work.

Today, the highly skilled workforces of the world have adapted to the lack of permanent jobs by becoming freelance artist. The work is abundant since the downsized companies have continued to look for ways to cut cost and outsourcing what they can has been a major part of it. While it is still true that many companies are moving their entire operations overseas and hiring foreign firms as their outsource agents, there are still many individuals that are available to do the little projects.

With this becoming a global trend that has been made possible by the growth of the internet as the medium of choice for the transfer of information and communication, employers from around the world are saving on their bottom line by outsourcing more and more projects on a daily basis. This is a positive outcome for the highly skilled workers in countries that have a lower standard of living because their overhead is smaller.

This has been the direction of how business is being conducted that was only accelerated by the global recession. Unfortunately, there are losers to this global trend and they are the workforces in the developed nations. With their relative high cost of living, their overhead is too great to compete with those that have moved to 3rd world countries. As a result, the standard of living is on the decline in most of the western world while the 3rd world nations are starting to catch up to them.

This globalization of outsourcing is a natural development of capitalism whose main premise is to maximize profits by lowering cost. The leading effect of this globalization of outsourcing work is the shift of revenue from the more industrialized nations to an even layering into the developing world. The standard of living around the world will be more evenly distributed and a better life is now available where it was non-existent before.

With the outsourcing companies and freelancers coming together to complete the necessary work to run the worlds economies, the equilibration of jobs, revenue, and opportunities will bring the two sides of the have’s and the have not’s closer together.


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