Outsourcing Software Development to India: Free Trade vs Job Security :: Globalization Software Technology Essays

Outsourcing Software Development to India: Free Trade vs Job Security Overview India’s strength in software sector with pool of well-qualified, English speaking software engineers has made India as the outsourcing destination for US companies looking for outsource their computing sector. Nasscom, the association of Indian software companies, claim the volume of work outsourced to India has increased more than 50% in 2003 and Indian IT sector’s exports at the end of March 2004 are $12bn. The common reason given by US companies for outsourcing India is high quality and low cost. However, there is criticism that perceived job losses in the US is due to outsourcing and something has to be done to prevent jobs from disappearing to India. The relationship between out-sourcing and employment creation is not simple. There are many economic factors involved in the relationship. One can claim that setting up Indian office cuts American employment and the other can claim that outsourcing brings more American employment by increasing productivity and cost cutting through outsourcing. In section 2 and 3, I introduced approaches for and against outsourcing. In section 4, I compare 6 standard ethical approach regarding outsourcing. Finally section5, I summarized all the ethical views regarding outsourcing issue and concluded with my approach based on the analysis and research. I finished the paper raising other issues related data privacy and protection. Free Trade Approach American Companies exported (outsourced) services worth 13bn in 2003 compare to 77bn importing (outsourcing) in such services. The number shows that US is the one of the most popular destinations for outsourcing by Mr. Evans from BBC. US practiced and preached free trade in global economy and outsourcing is one form of service trades. Internet advanced commerce, information and created opportunities. Electronic commerce made possible services go international and that can be delivered in the form of digital information. Now, business has been done internationally and customer shops on the internet. The location is not anymore restriction in any form. The negotiation of the Services Agreement in Uruguay Round under World Trade Organization (WTO) in 1994 was starting point and lay the ground for new agreement for service liberalization. The General Agreement on Trade in Services is the first multilateral agreement on trade that has as its objective the progressive liberalization of trade in services. It provides for secure and more open markets in services in a similar manner as the General Agreement on Tariffs and Trade (GATT) has done for trade in goods.