This is aggravated by the fact that companies may be fleeing the requirements of the Sarbanes-Oxley act that demands certain standards of fairness and equitability from American-based corporations.
Trends in outsourcing
Outsourcing seems to be a trend that is on the increase in the U.S. To the extent that the ICA sees most opportunities and businesses by 2020 being produced from abroad (Das, 2010). Another -- and fascinating trend seems to be one of "Reverse Outsourcing" (Das, 2010) which is defined by ICA as the "reversal of the outsourcing pattern between two markets consisting of businesses and workforce" (p.3). This is of encouragement to people who fear loss to American economy and American jobs since here non-American companies are increasingly hiring American individuals to perpetrate certain tasks, whilst Internet employment sites connect American freelancers to specific companies often located in China, India, or Brazil to work, either via virtual or direct communication with these foreign companies. This is done as means of either reducing expenses (such as that of visas and travel), or of understanding their American market, diversifying their talent pool, or achieving greater penetration into a promising American market (Das, 2010).
Related to reverse outsourcing is the phenomenon of 'crowdsourcing' where projects and specific operations will be outsourced to groups or communities in the form of open calls. These large groups of people could be freelancers or contractors, and so, instead of the task that was once performed in America, and then performed by another individual (so as to save on labor) in, for instance India or China, this task will, instead, be broken up and disseminated to various individuals who, in the form of a network, will each perform various parts of the job in collaboration with others. Telecommunication will enable aspects of the job to be distributed globally, distinctions will disappear between professional and amateur, and originality and innovation will become the key of the game (Social machinery.Com)
Knowledge process outsourcing and future role
Visteon and IBM are a study of the outsourcing of IT and the majority of outsourced companies are involved in IT in some form or other. Prediction for outsourcing of IT by the next decade is that approximately 10 to 15% of its jobs will relocate, but that the vast majority of workers will continue to hold their jobs and that America will still monopolize the IT niche. The danger to American...
This has occurred in the television industry and in several parts of the textile industry, but Dobbs (2005) does not predict this trend occurring in the IT technology. Most of the OT jobs that are relocating are in the call-center industry, leading to a moderate collapse of the IT category of this factor within this country.
Mergers -- as in the case of Visteon with IBM - will also be a more common aspect of the future, since companies aiming to cut their costs will pair with others. This will, more increasingly, be the case with specialized small companies pairing with large suppliers or with small companies (e.g. Visteon) running to large companies (e.g. IBM) for their specialization.
Contrary to initial history of outsourcing, today's prominent areas of outsourcing consist of IT services and HR industries (in that order). Other areas of importance are: e-commerce related processes, telecommunication services, and facilities management. E-commerce, in particular, is expected to substantially increase and have a dominating present in outsourcing by the next decade.
Countries that are prominent sources of outsourcing include India, China, Brazil, and eastern European countries. India serves a major source for the IT industry since its labor force is not only cheap but also well-educated and literate in English whilst China is readily catching up to par.
For other industries, East Asia, Africa, and Latin America are becoming major locations, as well as, and in particular, China, Eastern Europe, and Latin America. China is growing in technical outsourcing; the Philippines are growing in Business Process Outsourcing (BPO), and Latin America and Eastern Europe with improvement in English skills, are providing important offshore locations too.
Das, P. (2010) A new Avatar of outsourcing. ICA Institute. http://www.icainstitute.org/opeds/reverse-outsourcing.pdf
Dobbs, L. (Jan., 31, 2005). The global outlook on outsourcing. CNN. http://articles.cnn.com/2005-01-28/us/world.outsourcing_1_global-trends-global-economy-outsourcing?_s=PM:U.S.
Kakabadse, A., & Kakabadse, N. (2005). Outsourcing: Current and future trends. Thunderbird International Business Review, Vol. 47(2) 183 -- 204
Social Machinery.Com, Ten trends for the 2020 worker. Social machinery. http://www.socialmachinery.com/2009/11/23/ten-trends-for-the-2020-worker/
Yourdon, E. (2004). Outsource: Competing in the Global Productivity Race, Boston: Prentice-Hall
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