Global Economic Crisis and Outsourcing

Since Mid 2008, global economies have been severely hit by one of the greatest recessions since the great depression (1929). Though incepted by a number of causes, one cannot help but think about the possibilities and countermeasures that can be taken to rectify the prevailing economic crisis all over the world.
This crisis has increased poverty, mass corporate bankruptcies, “golden handshakes” and shutdowns. As a consequence, unemployment and lack of productivity have surfaced.
In this critical situation, how can outsourcing help create opportunities in the midst of all these adversities?


  • Robert Poulk

    The whole problem with the “Global” model is that every time a process changes companies another layer of profit is added to the final price. This means that either the quality of the end product must be reduced or the cost of the production must be reduced (wages driven down) at each stage in order to maintain the price of the finished product, which in turn should be driven down because the loss of purchasing power in the developed economies isn’t being offset by gains in purchasing power in the “emerging” economies, but hasn’t been.
    Globalization is just a great scam to move wealth up the food chain and workers at all levels down. Aside from the fact that Globalization has driven wages down but not prices, the best proof is the loss of work being experienced by first-wave offshore destinations now that their economies (and costs of living) are becoming more robust. They are being forced into unfair competetion for work now too, just like the “developed” workforces were.

  • Herb Briggs

    I agree with everything you said, except your assessment of the intelligence of the protectionists. They’re not stupid, they’re selfish. They know exactly what’s going to happen.
    By the time the U.S. and other developed countries have slithered backward into darkness, the protectionists will have made their personal fortunes. They’ll have iron-clad portfolios of cash, gold, securities, etc. spread out across twenty or thirty countries. They’ll own ocean-view palaces in Costa Rica where they can ride out any violence and starvation in security and comfort. And they’ll pretend to complain bitterly about the “traitors” who ruined their wonderful plans to bring peace and prosperity to the entire world.
    Short-sightedness can work very well for you, if you don’t care about anyone but yourself.

  • ken huffington

    Outsourcing may well have been the cause of the global crash. The outsourcing economies, India and China were the new “New Economy”.
    Like the tech economy the appearance of wealth (profit) was maintained by borrowed money- India and china borrowed trillions from the World Bank- and investment – billions each ear.
    The Fed printed billions and billions of new dollars to fund this “growth” or “expansion”. The billions of new greenbacks flowed everywhere – to China where office real estate prices surpassed prices in New York.
    To the US credit market. To Costa Rica real estate market …..
    Boosted by an unlimited supply of greenbacks and a perceived unlimited supply of labor we whipped up the greatest firestorm the world has ever seen. The madness was checked only when the earths ability to fuel this firestorm with minerals reached its limit.
    Go back to your economics book. The price of labor is what keeps supply and demand in equilibrium and employment maximized.
    Wage arbitration brought global trade to its knees as competative advantage gave way to low cost.
    No my friend, offshoring can only destroy.

Leave a Reply