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• Outsourcing is the practice by which one business subcontracts services or products from another business. When products or services are outsourced, the process of their production is transferred to the subcontractor, potentially leaving the parent company ignorant of how their goods and services are being produced.

• Fast Facts

  1. Responsibility for production is transferred to the subcontractor
  2. Can greatly lower production costs
  3. "Offshoring" refers to outsourcing to companies located abroad
  4. Increased free trade allows for more outsourcing
  5. "Outsourcing" became part of business vocabulary and practice during the 1980s

• Quotes

  "Most of the research and paperwork for large American corporates are being done in India."—Russell Smith, President and Chairman of SDD Global SolutionsThe Hindu Business Line: US corporates outsource legal work to India (June 16, 2007) "Contrary to the popular angst that "our best jobs" are going overseas, the best jobs appear to be staying here...Just as the free traders predict, we are swapping less skilled and lower paying jobs for relatively higher skilled and better paying jobs."— Dan Griswold, Center for Trade Policy Studies, Cato Institute Free Trade Bulletin: Why We Have Nothing to Fear from Foreign Outsourcing (March 10, 2004)

• Related Mahalo Pages

  Insourcing | World Bank | Thomas Barnett | Economics

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