Outsourcing from US can help in political stability of developing countries in that there is earning of foreign currency by citizens of these developing countries (Palley, 2008) and (Hansen, Schaumburg-Muller and Pottenger, 2008). Secondly, developing countries gain global trade opportunities (Hansen, Schaumburg-Muller and Pottenger, 2008). This is made possible by outsourcing countries balancing this with offsets of the other countries products (Palley, 2008).
For example, India, China and Singapore are among the leading outsourced hubs and in return they have found market for their goods in countries that they get these jobs from thus helping boost their economic stance. It is also important to note that a country where outsourcing is done to stands to keep up with technological advancement thus enables fast development of technology within its region. Outsourcing helps organizations focus on strategic issues thus increasing flexibility, efficiency and effectiveness in the organization while reducing the risk of obsolescence (Gonzalez, Gasco & Llopis, 2010).
There are some challenges that come with outsourcing. For example, once the job has been outsourced it becomes irreversible; there is loss of control and possibility of hidden costs (Beverakis, Dick & Dubravka, 2009). At times security and privacy, coupled with loss of expertise and other cultural differences can be a major drawback to outsourcing.
Historically, US has had comparative advantage in industries and technology transfer. When services are outsourced, it raises questions as to the credibility of international outsourcing (Palley, 2008). Although some regions like China have the possibility of having some superior technologies in some areas, the US still leads in most of these technologies.
Due to outsourcing, jobs are lost in the outsourcing countries. To help reduce the effects of outsourcing, it is crucial that the government encourage people to start entrepreneurial businesses as well as the government providing more liquidity to banks for citizens to borrow.
India has the ability to maintain its advantage on call centers since it has the best infrastructures for the services worldwide. Instead of other communication platforms being invested up, India would be the easy way out for most organizations.