The driving force behind off-shore sourcing has to be a deep wage differential which
ensures that similar work, product or service, if sourced off-shore or outsourced will cost
significantly less than if completed within the country where the work, product or service, is
ultimately needed. There are other driving forces such as lax labor laws, which companies big
and small, like to exploit. Still other reasons include easier availability of talent, or ease of
training an off-shore firm.
Advances in Technology
Growing technological penetration world-wide, in particular, high speed internet, which
facilitates collaborating on the internet including using video-conferencing is the principal
advance that precipitated off-shore sourcing. Apart from internet, easy availability of learning
resources has meant that foreign workforces are fast training in the English language (seen in
Philippines catching up with India). Processors are becoming faster and are consuming a fraction
of the power they used to, solving some of the power issues that foreign countries faced in
The article focusses on how the nascent call center industry in Philippines has caught up
with the more mature and bigger Indian call center industry. Among reasons behind this success
are the new regulations that are more lax, allow for tax breaks when importing computer
equipment in the industry, easily allocate buildings as special economic zones and a “cultural
affinity” the writer claims that the people of Philippines have for the United States owing to the
latter’s rule over the country for almost 50 years. The article then makes a point that when
looking at the larger picture, India is far ahead in terms of absolute outsourcing. Because of the
far, far greater number of engineers and technical personnel it churns out, India has moved on
from basic outsourcing to more technical work, including software and accounting work
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