Outsourcing refers to the transferring of employees, work, or a business from one place to another, whether that be to another firm or another country. There are both benefits and drawbacks to outsourcing things abroad.
Outsourcing makes the means of production much cheaper, which translates into cheaper products. Other countries have lower taxes, cheaper labor, and less regulations on business practices. For large companies, moving their factories abroad can save them millions of dollars. These benefits resulted in 2,273,392 jobs to be outsourced in 2011 alone.
Drawbacks of outsourcing include a loss of jobs in American markets. If a company is willing to pay someone in India to do your job for a fraction of the cost, than you no longer have a job. Another negative effect is the loss of control by the parent company over aspects of production. Since the company is sending important information abroad this can lead to a significant loss of security. Private records and confidential data could be distributed illegally with little consequence due to the judicial differences in other third world countries. However, many companies choose to overlook potential disasters with the hopes of saving themselves money and maximizing profits.
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