How Much Does It Cost to Save? Essay

2398 Words 10 Pages
How Much Does It Cost to Save?

The impact of software development offshore outsourcing has many economic and social impacts. Economically, India is thriving with GDP growth accelerating exponentially including having the potential to achieve double-digit growth.1 Meanwhile, in the United States, the numbers relating to developer jobs are quite the opposite. Most figures suggest that by 2015, roughly 3.3 million business-processing jobs will have moved abroad. As of July 2003, around 400,000 jobs already had.2

Socially, job loss has many strong emotional implications. Job loss due to cost cutting measures coupled with the dot-com layoffs in Silicon Valley conveys an outlook for finding a technical position quite bleak. In
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In order to compete, US developers would have to take a reduction in salary. This conflicts with the cost of living in places like Silicon Valley.

Cost cutting though ultimately has many benefits for companies and individuals as it opens up other opportunities and investments. Silicon Valley firms have used resources freed up through offshore production to develop new products, new industries, and new employment opportunities.4 A Silicon Valley engineer may not like the opportunities that come up because of outsourcing, but they are there. Gregory Mankiw, chairman of the White House Council of Economic Advisors, feels that “there will be jobs in the future because this is a vibrant economy, a dynamic economy.”5

Mankiw’s support for outsourcing is without a doubt supported by financial analysts in India. A member of Delhi Stock wrote in the India Times that Mankiw “clearly had logic and facts on his side; a detailed study by Deloitte in August 2003 estimated that approximately 356 billion of work for the global financial-services industry alone will be relocated offshore within the next five years” leading to a
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