Outsourcing is good for developed economies
The UK High Commissioner to India summed up the position of the UK government on outsourcing of services to India in a speech at the London Business School on 30 June 2004: what is good for UK businesses is good for the UK economy. The recent wave of outsourcing is just the continuation of a process that started 30 years ago in the UK with manufacturing, and has had a positive effect overall on the UK economy. While it is true that outsourcing will result in some job losses in the UK, the benefits in the long term are far greater:
Outsourcing will allow UK companies to remain competitive at an international level in spite of the high labour costs at home, Outsourcing will fill the gap in the skills shortage, Outsourcing means that the UK will continue to focus on doing what it is best at: providing higher value services such as design and consultancy services, Embracing the potential of outsourcing now means that the UK will remain at the forefront of globalisation, while reactionary economies will fall behind, The common view that outsourcing of services takes jobs away from people in developed countries has been shown to be misleading. In fact several surveys have shown that companies that outsource services do not reduce their head count, but rather redeploy their staff to higher value services. In addition, the increase in business efficiency has a beneficial effect on the success of companies generally, leading to employment growth.