Impact of Outsourcing on Global Economy

Outsourcing is no more an alien term in the arena of global business. However, it still makes people lift their eyebrows in a sort of anticipation. Many developing countries like Ukraine, China, Poland, Philippines and Brazil have been offering outsourcing services to the world, but outsourcing to India has earned a special recognition in the online market. So much so, that a vast number of organizations across the globe accredit their decision of business outsourcing to India for their splendid success. But due to its delicate nature of outsourcing, not everybody is a fan of this extraordinary business model. Yet, business owners from all domains are involving it in their working due to the ways it can positively impact the global economy.

It is very evident that outsourcing has a lot to do in the making of several developing nations like India. Outsourcing is playing an important role in driving India’s economic growth by attracting volumes of foreign investment. Taking advantage of this lucrative business trend, India and other developing countries offering outsourcing services are efficiently coming out as knowledge-based economies. Today, let’s understand how outsourcing can touch and transform both local (country offering outsourcing services) and foreign (country garnering outsourcing services) economies.

Advantages of Outsourcing for the Local Economy

1. Creating Employment Opportunities

One of the best merits of outsourcing for a local economy is generating employment. Today, lakhs of people from developing countries are employed to cater to the outsourcing requirements of business owners from the developed countries. Usually, developing countries face the challenge of lack of local jobs and outsourcing fills that gap and helps in making a large section of the population financially independent.

2. Bringing in Foreign Investments

The main reason why outsourcing business is flourishing in the developing countries is to gain a stronger economic standpoint. Attracting impeccable financial investment, outsourcing helps the local organisations boost their country’s overall development. They cater to long-term foreign business partnerships, which directly implies constant, steady flow of foreign currency.

3. Amplifying Skills and Experience

While working for an outsourcing company, an employee experiences working across different industries and functional areas. They learn to work with the latest tools and techniques in international markets, which is excellent for growth of both their personal profiles and their country’s economy.

Advantages of Outsourcing for the Foreign Economy

1. Making Business More Competitive

One of the top reasons for any business owner to initially consider outsourcing to India is to save money. But gradually, it is realised that besides a lot of cost savings, this unique business practice also makes your business more efficient. In terms of cost, a business owner saves big on office setup, IT equipment, HR involvement, leaves, pension, and other fringe benefits.

2. Making Business More Competitive

Several organisations prefer business outsourcing to India as it facilitates scaling up and down as per the changing business requirements. These firms are into the domain of client servicing, which means they have to spearhead different requirements of different clients in different time frames. Outsourcing makes doing this easy, while avoiding a lot of complications that are common when working with an in-house team.

3. Making Business More Competitive

When people of two countries work together, a lot of knowledge sharing takes place. Also, a fresh approach is brought to your business ideas that can be a milestone for attracting potential investors and business expansion. Thus, outsourcing to India can make a business more competitive and promising.

Thus, we can conclude that the effect of outsourcing on economy is exemplary. It is particularly a blessing for the start-ups or small businesses. Since the number of business owners looking out for outsourcing service solutions is increasing day by day, the number of outsourcing service providers is also on a rise. Outsourcing helps countless business owners in fighting their business issues and filling the demand-supply gap of resources, thereby bringing the developing and developed economies closer. Besides financial implications, outsourcing is said to encourage setting up of lifetime bonds between the two countries.

Article By John Tie, Outsourcing Enthusiast