Modern businesses are choosing to outsource their operations overseas. As the news states, this phenomenon mostly bring disadvantages, one might ask, ‘what’s happening?’
To acquaint you from this technicality, we will show you a brief history about outsourcing especially in American industries.
A Brief History of Outsourcing
Technically speaking, the term outsourcing was not even included as a business strategy. Until 1980s, it is only a part of the global trade. American companies are buying goods from other countries after World War II to boost their struggling economies.
Outsourcing started because of competition of some East and South East Asian nations on textile manufacturing during the 1950s. During the 60s, textile industries in Asia managed to woo American companies to produce their clothing – this is the evolution of outsourcing.
Twenty years after, manufacturers in Europe started to consider, following America’s success, in outsourcing. This started the global phenomenon in bringing jobs overseas. Together with various technological advances, worldwide trade soon blossomed and prospered.
Currently, advanced economies are relying on worldwide outsourcing on their non-core operations to run smoothly and effectively. Despite pundits and economists warning about the disadvantages of outsourcing like poor quality of materials and continuous threat to worker security, its advantages can outweigh it.
Additionally, the benefits of global outsourcing are not just restricted on a large company or an outsourcing firm. It can also create a domino effect that can be an advantage in both developing and advanced countries.
According to a publication from the New York University titled The Rise of Outsourcing & its Connection to Post-Industrial America, outsourcing is not just helping the expansion of trade and profit; it is also helpful to the global economy as a whole.
Advantages of Outsourcing
To signify its advantages, business outsourcing solutions deliver goods and services at lower cost yet increasing its quality. It also helps workers from developing countries to access high-paying jobs that will also allow them to join the growing middle class.
Countries like China, India and the Philippines – among the top places for the best outsourcing services and solutions – are also getting competitive advantages of their own. This brings positive results that enable industries in these countries to improve their competitiveness. Chinese are known for their manufacturing, Indians for their IT expertise, and Filipinos for their adaptability.
Take for example some Philippine outsourcers. They deliver and provide excellent service to American and British companies that they are working for. Due to their adaptability, not just in American English but also in foreign culture and technology, the country managed to be the top choice of companies around the world to do their non-core jobs.
With the rising economy, the Philippines are once again dubbed as an Asian economic tiger. Bloomberg Television also included the country as one of the “Breakout Nations” in the world.
As some of the best outsourcing companies in the world are considering the country, the Philippines, together with other Asian economic tigers, could be a driving force not just in outsourcing but also in improving the global economic scene.