In general terms, companies are looking to outsource growing numbers of more complex operations as they are not willing to assume the risks and make the necessary investments. In this order of ideas, they outsource the operations to firms which have already made the investments and assumed the risks. "Organizations are reluctant to invest in and maintain cutting-edge technology and technical specialists internally, when they know that similar assets exist externally, and were developed with others' investment and risk" (Greaver).
While the companies recognized and capitalized on the benefits of outsourcing, the communities identified the limitations of the processes. The most common dissatisfaction was linked to the fact that outsourcing took jobs away from national workers and gave them to foreigners. In 2003, over 300,000 jobs within the United States were lost to outsourcing, and the figures were expected to maintain an ascendant trend (Schniederjans, Schniederjans and Schniederjans). But the real numbers far exceeded the initial estimates and by 2007, the total jobs lost in one year alone had reached 5.6 million. "According to a study from the Economic Policy Institute, the U.S. lost 5.6 million jobs as a result of the U.S. non-oil trade deficit in 2007 alone. 70% of these jobs were in the manufacturing sector" (Thomas, 2009).
The natural response to these events was that of an increased resistance to outsourcing. Employee groups pressured the federal agencies to develop and implement new legislations that would better protect the jobs of the domestic workers. Several government officials became involved in the anti-outsourcing rhetoric and supported programs for national employment in the detriment of foreign contracts. In 2004, the state of Tennessee was for instance the first to implement an anti-outsourcing program; it basically revolved around the stimulation of American companies to hire national contractors to perform informational system services.
Following the example of Tennessee, 36 American states developed legislations to reduce the outsourcing phenomenon. Still, most of the one hundred bids have not been legalized and are still discussed at the federal level. Their existence however points out to a growing trend of better regularization of outsourcing activities, generally in the sense of their restriction (Schniederjans, Schniederjans and Schniederjans). The trend could be maintained in the immediate future due to the internationalized economic crisis, and might be supported by the necessity to create national jobs and support domestic industries in order to overcome the financial hardship.
2010 looks like an interesting year in terms of outsourcing and is projected to bring about several changes. At a general level, the economic revival which has been foreseen is expected to lead to several delayed outsourcing contracts to be resumed. This would materialize in an increase in employment rates in India and other Asia-Pacific less developed countries, and their adjacent economic boost of 8 up to 10 per cent. While employment and economic state is expected to increase in the United States and the developed European countries, their rates are expected to be lower (Taylor, 2010).
In terms of specific outsourcing trends, the top ten most discussed expectations for 2010, as identified by the International Association of Outsourcing Professionals, are as follows:
1) Outsourcing contracts that have been frozen due to economic instability will be reestablished and acted upon
2) Companies will realize that the expenditure costs with outsourcing have not always been beneficial and company relations will focus more on better stakeholder interactions and operations that add more value to the entity
3) Companies will seek to sign flexible outsourcing contracts, rather than rigid, long-term ones
4) Service providers are expected to unite forces in mergers and acquisitions as a means of consolidating their positions and reducing the threats of an unstable economic climate
5) Economic rates and employment are expected to increase in India and other Asia-Pacific countries, while the growth rates in the United States and Europe will be inferior; more young graduates will be hired in outsourcing deals
6) the traditional outsourcing destinations will lose ground to new countries, such as those in Central or Southern America
7) a higher level of competition among service providers will occur
8) New technological advancements will be incorporated to add more value to organizational processes, increase their efficiency and the overall organizational performance
9) in light of the incremental focus placed on environmental and social responsibility, outsourcing companies are expected to feel growing pressures in terms of respecting these new demands
10) Finally, it is highly probable for new legislation that regulates the outsourcing field to be developed and...
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