Outsourcing in the recent years has come into much criticism by the workers in first world nations like US and UK. Many anti-outsourcing unions have been formed and people have developed a kind of disgust towards this trend which is only evolutionary (What are the Global Outsourcing Benefits 2005). This dissertation seeks to understand and know the effects of outsourcing of jobs to India will have on the service sector of the United Kingdom as well as other developed nations. Any benefits from outsourcing to India will also we weigh against the negative effects.
Chapter one serves as a backgrounder for the Indian economy from the pre-colonial, colonial, and post-colonial period. This is significant as it will give light to the nature of economy that existed before that affects the present economic system of India. The economic reforms made by Rajiv Gandhi were the foundation that made what India is today. The second section of the chapter examines the history of outsourcing and prove that the practice of outsourcing is not new, before the information technology, some manufacturing jobs were already being sent to low-wage countries. It is only through the advent of information and communication technology that outsourcing grew rapidly. This section evaluates the real force behind outsourcing and when it all started.
Chapter two gives an account of the types of jobs being outsourced to India and what industries are involved. By using comparative advantage (Ricardo’s principle) and the Heckscher-Ohlin model, the chapter seeks to understand fully the rational behind choosing India as a destination for most outsourcing job.
Chapter three investigate the major impact of outsourcing on India and the use of Solow growth model in order to explain India’s growth and make some predictions of the future of of Indian economy. It is indicated in this section that the outsourcing business is not only fueling the Indian economy into a bullish future but also provided and continues to provide more jobs to the Indians.
Chapter four discusses the applicability of dual economy theory on present day India where agriculture and industrial economy both fuel its economy. The chapter also showed that India is fast catching up with other western developed economies. And finally, having all this data, this section will evaluate the overall benefits and especially negative effects of outsourcing to India on the service sector of the UK and other EU states.
The major conclusion made from the essay
Continued outsourcing of some jobs to India will further fuel the already emerging economy of India. Its effect on UK service sector will be temporary. Overall, the current structure of outsourcing is seen by many economists as an evolutionary one which will eventually benefit all countries in the long run. As an example of its benefits, the introduction of business process outsourcing has already enabled many countries to cut down prices and give better