Introduction

Outsourcing refers to the practice of hiring a third-party company to perform tasks that were previously done internally by a business. This can include everything from manufacturing and logistics to customer service and IT support. The use of outsourcing has grown rapidly in recent years, with many companies turning to this option to save money and streamline operations.

However, the rise of outsourcing has also led to significant job losses for workers around the world. As companies look to cut costs, they are increasingly turning to offshore labor markets where wages are lower and working conditions may be less favorable. This trend has been particularly noticeable in industries such as manufacturing, customer service, and IT support, where outsourcing is most common.

The Number of Outsourced Jobs in 2011

According to a report by Gartner, Inc., a leading technology research and consulting firm, the number of outsourced jobs worldwide reached an estimated 69 million in 2011. This represents a significant increase from previous years, as more companies look to take advantage of cost savings offered by outsourcing.

The report also notes that the number of offshore jobs has grown significantly in recent years, with many companies looking to outsource tasks to countries where labor costs are lower. In fact, the report found that the percentage of offshore outsourced jobs increased from 32% in 2009 to 47% in 2011.

The Impact on the Workforce

The rise of outsourcing has had a significant impact on the workforce, particularly in industries where outsourcing is most common. In manufacturing, for example, outsourcing has led to job losses as companies look to move production offshore to take advantage of lower labor costs.

According to a report by the Bureau of Labor Statistics, the number of manufacturing jobs in the United States declined by 6.4 million between 2000 and 2010, with many of these jobs being outsourced to countries such as China and Mexico.

In customer service, outsourcing has also led to significant job losses, particularly in industries such as call centers and back-office support. As companies look to reduce labor costs, they are increasingly turning to offshore labor markets where wages are lower and working conditions may be less favorable. This trend has been particularly noticeable in the United States, where the number of customer service jobs declined by 10.9% between 2005 and 2010.

The Impact on the Economy

The rise of outsourcing has also had a significant impact on the global economy, as it shifts wealth from developed countries to emerging markets. This can have both positive and negative effects on these countries’ economies, depending on how they are able to adapt to the changing landscape.

On the one hand, outsourcing can lead to increased investment and job creation in offshore markets, particularly in countries such as China, India, and Mexico. These countries are often able to offer lower labor costs and more favorable working conditions, which makes them attractive destinations for companies looking to outsource tasks.

However, the shift of wealth from developed countries to emerging markets can also lead to job losses and economic instability in these countries. This is particularly true in industries such as manufacturing and customer service, where many jobs are being outsourced to offshore markets.

Case Studies

To illustrate the impact of outsourcing on the workforce, let’s look at two examples from the manufacturing industry.

In the 1980s, the United States was a leader in the automotive industry, with many of the world’s largest car manufacturers operating within its borders. However, as labor costs rose and wages became less competitive, companies began to look offshore for production.

In the 1990s, Toyota opened a factory in Kentucky, which quickly became one of the company’s most profitable plants. This move not only created jobs in the United States but also helped Toyota gain a foothold in the North American market.

In recent years, many automotive manufacturers have looked to offshore markets for production. In 2014, General Motors announced that it would be outsourcing production of some of its popular models to Mexico. This move was met with criticism from labor unions and workers who feared job losses in the United States. While the impact of this decision remains to be seen, it highlights the ongoing shift towards offshore production in the automotive industry.

Another example comes from the electronics industry. In recent years, companies such as Apple and Samsung have faced criticism over their labor practices in countries such as China and South Korea. These companies have been accused of using sweatshops and paying low wages to workers, which has led to significant backlash from consumers and governments around the world. While these companies have responded by implementing measures to improve working conditions and wages, the ongoing shift towards offshore production in the electronics industry highlights the challenges faced by workers and communities around the world.

Conclusion

In conclusion, the rise of outsourcing in 2011 led to significant job losses for many workers around the world. As companies look to cut costs and increase efficiency, they are increasingly turning to offshore labor markets where wages are lower and working conditions may be less favorable. While the shift of wealth from developed countries to emerging markets can have positive effects on these countries’ economies, it can also lead to job losses and economic instability in industries such as manufacturing and customer service. As a result, it is important for governments and businesses to balance the need for cost savings with the impact on workers and communities around the world.

FAQs

Here are some frequently asked questions about outsourcing:

• What are the main drivers of outsourcing?

Outsourcing is driven by a number of factors, including the desire to reduce costs, increase efficiency, and access new markets. Companies may also outsource tasks in order to focus on their core competencies and avoid distractions.

• How many jobs have been lost due to outsourcing?

The exact number of jobs lost due to outsourcing is difficult to estimate, as it varies by industry and country. However, it is widely acknowledged that outsourcing has led to significant job losses for many workers around the world.

• What industries are most affected by outsourcing?

Industries such as manufacturing, customer service, and IT support are particularly vulnerable to outsourcing due to their high levels of automation and offshore labor availability. However, virtually any industry can be outsourced if it meets certain criteria.

• What is the impact of outsourcing on the global economy?

Outsourcing has had a significant impact on the global economy, as it shifts wealth from developed countries to emerging markets. This can have both positive and negative effects on these countries’ economies, depending on how they are able to adapt to the changing landscape.