Pros and Cons for Outsourcing

1710 WordsDec 4, 20127 Pages
The Pros and Cons of Outsourcing services in the US By Berend Schoute (1713035), student of the VU university Amsterdam. INTRODUCTION Hillary Clinton, "I don't know what reality the Bush administration is living in, but it's certainly not the reality I represent, from one end of New York to the other." This response came on the statement of the head of U.S. President George W. Bush's Council of Economic Advisers, Gregory Mankiw. He said: "outsourcing is just a new way of doing international trade," which makes it "a good thing." In the last decade most economists are a proponents of offshoring services outside of the US. They say that the benefits of outsourcing exceed the disadvantages. The main discussion is more likely a…show more content…
If hitech industries are no longer competitive, where will new jobs be created?’ This previous theoretical introduction didn’t made the discussion between the pros and cons yet clear. It simply shoes some arguments of a proponent and a opponent. We still need hard evidence from both parties to give a good view on the truth. PROS VIEW Opponents of outsourcing are talking about the fact that American workers are losing their jobs cause of the labor movements. This is off course a fact, but what are the actual numbers ? The Mckinsey Global institute (2003) notes that in the upcoming 5 years , the growth was going to be around 30-40%. Forrester Research predicts that the total outsourced jobs will be around 3,3 million in 2015. According to projections, the hardest hit sectors will be financial services and information technology (IT). In one May 2003 survey of chief information officers, 68 percent of IT executives said that their offshore contracts would grow in the subsequent year (Mckinsey Global institute,2003). Therefore, at first sight the perception of the opponents is really sustainable. The total growth in the last two years (2002-2003) was really good, the productivity growth was even greater. The overall job growth have been really alarming. This indicates that the opponents are right in their perception. Controversially, if you unpack the numbers,

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