IMPACT OF GOVERNMENT RESTRICTIONS ON OUTSOURCING, HIDDEN COSTS OF OUTSOURCING AND OUTSOURCING’S EFFECT ON UNEMPLOYMENT

Economics

In the developed countries outsourcing is often considered by the people as bad because it allegedly takes away their jobs and increases competition. But economists, financial analysts and experts view outsourcing as the international trade which benefits the companies outsourcing the activities and the helps growth of the country from where the outsourcing is happening in the long-run. While analysing the claims of the experts and the conception of the general public it was found that big companies of the U.S. like Walmart, Apple are earning huge profits by outsourcing their activities to other countries. Any restrictions put by the U.S. government in their outsourcing activities could make them less competitive in the international market. In addition to this, it was also concluded that companies often overlook the hidden costs of outsourcing while making their outsourcing decisions and these hidden costs should be carefully calculated so as to come to the actual estimate of the profits which companies make by outsourcing their activities. Apparently, it seems that due to outsourcing jobs are going away from one country to another but if looked in absolute terms they are not going away, on the contrary, outsourcing is helping the businesses to expand, profits to increase and accumulation of capital which is eventually creating more employment opportunities in the country from where activities are getting outsourced.

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