The Another World: Outsourcing From InsideSpeaking of outsourcing I mean a wider sense than just hiring of manpower from abroad for some remote work. I can mark out four types here:
1.Outsourcing itself. A US or Western Europe company (let’s call it “the West”) hires an employee from Eastern Europe, Asia, etc., i. e. from a country with more poor economy (let’s call it “the East”, though it is not quite correct). This employee performs remotely some part of
work for a company from
West.
2.A company from
West hires a company from
East that performs all
work content for an employer and gives
ready product. In this case an employer appears for a reseller.
3.Not quite outsourcing, but it is related to outsourcing. A company from
West orders a product or a service at a company from
East for private use that is much cheaper than an analogous product/service by a company from
West.
4.Not outsourcing at all. An employee from
East moves to
West and works at a company.
However we are not interested in
fourth type now. The problem of outsourcing arouses a lot of discussions. On
one hand – those who immediately order and perform, on
other hand – specialists from
West who are being ousted from
labor market by specialists from
East. And it is
only significant disadvantage of outsourcing.
Surely, for people who lose their jobs because of foreigners this disadvantage is very significant, but nevertheless we should take into account
fact that only in
USA there are 340000 vacancies for programmers. Programmers from
West have two ways out: improve their professionalism to
level that no outsourcer could compete with them or to move to
East and become outsourcers.
So what can be opposed to this disadvantage? There are quite a lot of advantages. The most obvious among them is
considerable disparity between manpower costs in
countries of
West and in
so-called Third World countries. There are a lot of reasons; it is a question for economists, but all that comes down to
fact that
cost of living in these countries is much lower than in
USA or countries of Western Europe.
On
other hand,
professionalism of programmers, designers, etc. from not market-economy countries is highly competitive with
professionalism of Western specialists. The education system in
Soviet Union (and later – in
countries that became
USSR’s successors) is considered to be one of
best in
world; many specialists go to
West to work there, others are engaged in outsourcing. I am speaking of
countries of
former Soviet Union, because working with outsourcers from these countries is more profitable than with their Asian colleagues and developer from other countries of Eastern Europe. Of course,
benefit lies in
lowest manpower costs.