Outsourcing of Services in India - Coursework Example

In a world where IT has become the fundamentals of businesses all over the world, 'outsourcing' is the process through which one company hands over part of its work to another company, making it responsible for the design and implementation of the business process under strict guidelines regarding requirements and specifications from the outsourcing company (George, 2005).

Outsourcing in recent years has come into much criticism by the workers in first world nations like the US and UK. Many anti-outsourcing unions have been formed and people have developed a kind of disgust towards this trend which is only evolutionary (What are the Global Outsourcing Benefits? 2005). This dissertation seeks to understand and know the effects of outsourcing of jobs to India will have on the service sector of the United Kingdom as well as other developed nations.  Any benefits from outsourcing to India will also weigh against the negative effects.

 A short summary of each chapter

Chapter one serves as a backgrounder for the Indian economy from the pre-colonial, colonial, and post-colonial periods. This is significant as it will give light to the nature of the economy that existed before that affects the present economic system of India. The economic reforms made by Rajiv Gandhi were the foundation that made what India is today. The second section of the chapter examines the history of outsourcing and proves that the practice of outsourcing is not new, before information technology, some manufacturing jobs were already being sent to low-wage countries.  It is only through the advent of information and communication technology that outsourcing grew rapidly.  This section evaluates the real force behind outsourcing and when it all started.

Chapter two gives an account of the types of jobs being outsourced to India and what industries are involved. By using comparative advantage (Ricardo’s principle) and the Heckscher-Ohlin model, the chapter seeks to understand fully the rationale behind choosing India as a destination for most outsourcing jobs.

Chapter three investigate the major impact of outsourcing on India and the use of the Solow growth model in order to explain India’s growth and make some predictions of the future of the Indian economy. It is indicated in this section that the outsourcing business is not only fueling the Indian economy into a bullish future but also provided and continues to provide more jobs to the Indians.

Chapter four discusses the applicability of the dual economy theory in present-day India where agriculture and industrial economy both fuel its economy. The chapter also showed that India is fast catching up with other western developed economies. And finally, having all this data, this section will evaluate the overall benefits and especially negative effects of outsourcing to India on the service sector of the UK and other EU states.