Future of Work: Offshoring and Outsourcing in Developing Nations Essay

This essay examines the future of work, focusing on the impact of offshoring and outsourcing on developing nations like India and Singapore, contrasting them with developed nations such as Australia and Denmark. It analyzes the definitions and differences between offshoring and outsourcing, highlighting cost minimization, talent shortages, and globalization as key drivers. The study uses Westpac and Larsen & Turbo as case studies, exploring the advantages and disadvantages of these strategies. The essay also addresses the importance of reskilling and upskilling employees, the role of government policies in education and trade, and the impact of data mobilization and technological advancements. It emphasizes the need for developing nations to improve education and adapt to technological changes to maximize benefits from offshoring and outsourcing, while also considering the historical context of industrial shifts and the importance of adapting to the changing landscape of global business.

Running head: Future of Work
Future of Work
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Introduction
The given study has taken into consideration regarding the re skill and up skill of the
employees in order to increase the employee production rate. The study is important in the sense
that in the modern world of business, the development of automation technology is being used by
most of the developed nations. One of the major factors that is currently present within the
developed and advanced economies is the concept of off-shoring and outsourcing. It is important
in the sense that most of the developed nations choose these options to decrease the cost of
operation. The main thesis statement is showing the fact that considering the status of the
developing nations, the off shoring and outsourcing will actually minimize the cost of operation.
Moreover, the essay will portray the line of arguments supporting the fact that off shoring is
important for economic growth. The study has chosen the two developing nations in the form of
Australia and Denmark and the developing nations have been selected as India and Singapore.
The study will mainly deal with Westpac as Australian company and Larsen &Turbo as company
originating in Denmark.
Discussion
Before going into deep analysis on the off shoring and outsourcing it is important to
understand the two definitions that are having huge difference. The term outsourcing is done by
most of the firms where any company will search for another party in order to complete single
set of achievements or a part of a certain project. In outsourcing, no transfer of physical asset
takes place among the parties that are indulged in the trade. However, the scene is quite different
for the off shoring. In the situation of off shoring the companies sets up physical assets into
another country or another region. However, there are certain advantages and disadvantages
regarding the off shoring and outsourcing of companies. Through the incorporation of off

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shoring policy, the corporate guns can minimize their costs of the operation as they can indulge
cheap resources into their production. On the other hand, out sourcing will allow the employees
to work remotely in other countries. One of the major factors that drive the urge for the off
shoring services is talent shortage. It has been seen that in most of developed nations, the lack of
talent is creating problems in the sense that through the development of talented workforce most
of the organizations are aiming to increase their dominance over international market.
Nowadays, the search for the talents in the global market has taken the shape of a war.
Companies like Google, Microsoft, IBM is continuously applied to US government to ease the
Visa to expand the business in the US market. According to the Bureau of Labor Statistics, the
unemployment rate for computer was around 3.6% in 2012 (Industry Week, 2013). This is
important in the sense that according to the Talent shortage survey, 50% of the employees are
feeling problem in getting the desired level of jobs. In order to highlight the importance of the
talent skills and talent gaps, companies like Larsen & Turbo is mainly looking to incorporate the
policy of off shoring so that they can build up physical infrastructures in the country they want to
invest. Now in order to increase the resource utilization will enable the development of the
resources identification process.
Companies like West Pac have taken the help of impact of off shoring and they are using
the local resources, to increase the investment process. They have taken the policy of retail
banking in order to increase the customer participation so that they will be able to identify the
business and the investment opportunities that is lying within the emerging economics
(Westpac.in, 2019). Now in order to minimize the skill gaps in the global perspective most of the
companies belonging from the developed nations are thinking of using local resources so that
they can increase the production rate by using local human and capital resources. It will be useful

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in the sense that through the utilization of resource channelization, the company will be able to
increase the revenue.
Secondly coming to next factor that indulges any firms to increase the off shoring is Cost
of economics. This is one of the important facts because in most of the emerging economics ratio
of labor as input costs is too high. Most of the students who are completing graduation is mainly
looking to get jobs in the manufacturing and IT sectors.
China UK India US
0
200
400
600
800
1000
1200
1400
no of graduates (1000 per year)
values
Figure 1: No of young graduates
(Source: Industry Week, 2013)
Most of the working sectors like IT, BPO and typical call centers operations have
majority of the cost attached to labors. Almost about 80-90% of the costs are attached with the
labors of these sectors. However, there is a huge gap in the highly developed nations and among
the skills of the labors regarding the development of the resources. It is important in the sense
that introduction of Integrated Voice Response (IVR) have reduced the man-power in most of the
sectors mostly the banking sectors are implementing digitized and automation. Using the

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automation in the banking sectors most of the developed nations are hiring less number of
employees.
Coming to the third important factor in the form of learning curve helps in analyzing the
factors that will be leading for off-shoring. Over, 1 million of jobs in IT, call centers and other
business-processed output is being completed through the off shoring business. In order to bring
the indulgement of the resources, the companies like WestPac and Larsen & Turbo is going to
improve the off-shoring industry. Many pundits claimed that rising wage inflation in India will
erode the financial attractiveness for outsourcing. In developed nations like US, the wage
inflation rate is 2% and in India, the wage inflation rate is 12%. Another important reasons in the
sense that depreciation of the exchange rate of the Indian currency. Moreover, emerging
countries like India and Philippines have gained enough expertise level regarding the managing
service factors, and oversight of global delivery, large, complex teams and projects, workforce
scheduling, and call queuing and handling routines. Now if developed nations want to reshore
these activities will lead to inefficiency, potential customer dissatisfaction and will increase the
cost of operation. This will increase the costs of production for the companies who will be
looking to produce these services in their own.
Globalization is also an important factor that is leading to the development of off shoring.
It is important strategy in the sense that the modern world of business is more competitive in
nature. Most of the developed nations are having natural resources and having advanced level of
technology. Using advanced level of the technology, these countries are making dominance in
the international market. In order to free themselves from the increasing cost for the
manufacturing of goods, most of the companies will be willing to outsource and off shore the
products. However, on the other hand, the development of the cost minimization structure will

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allow the economy to increase the production. Through the incorporation of better resource
utilization, the companies like Larsen & Turbo and West Pac will be looking to invest in the
countries like India, China and many Asian countries. One of the main reasons for the
development of off shoring and outsourcing is the huge amount of labor supply in these
economies (Larsentoubro.com, 2019). Moreover, through the incorporation of better
understanding of the economic conditions in the emerging and developing countries, developed
nations will be mainly looking to increase their investment and fulfill their requirements. It is
important for the companies to identify the potentiality of the factors at first within the countries
they are going to invest. This is important in the sense that through the incorporation of better
technologies.
Meanwhile it is also important for the government to take some strategies so that they can
cope up with technologies that are taken by MNC. In order to increase the resource utilization,
the government must take some of the policies in the form of increasing the education of the
employees and the labors. It is important for the emerging economies to increase the education
level of the existing human resources. The graduates that are completing their courses should be
given both vocational and non-vocational trainings so that they can incorporate technical changes
live in their jobs. Moreover, in emerging countries like India, China and other Asian countries
are having huge quantity of labor and this is the main reason behind the falling rate of marginal
cost of labor in these countries. Most of the developed nations are trying to utilize these pools of
huge supply of labors through out-sourcing their products.
Even today after so many years of independence, India is still considered one of the
economies that are having huge supply of employees. This is important in the sense that most of
the developed nations still doubt the education level of the employees. This is one of the

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important aspect in the sense that through the improvement in the HDI level, the education level
of the employees will be crucial to increase the education level. Government policy is important
for the development of trade in international market so that resource exploitation does not
happen. On the other hand, through the incorporation of better development of resources it will
be important for the companies mentioned above to incorporate the development of trade.
In the modern world of the business, data mobilization is one of the important factors for
the development of outsourcing. Previously, the idea of off shoring was not allowed for the
security reasons. On the other hand, through the utilization of resource utilization, the
incorporation of better involvement of technology, the data nowadays are being shared with the
third party without any hassle. However, recently break-ins of high profile data in US based
companies and the Department of Defense has increased the level of awareness among the
common people (BusinessDictionary.com, 2019). This will be looking for the development of
better technological up gradation that will give protection to the country. On the other hand,
through the development of better policies and support of the government for the development of
education both in primary and secondary level is beneficial for any country to increase their
return from the investments. Through the innovation in the education system present within the
economy is going to increase the resource utilizing capacity.
The term re skilling the employees means bringing the old companies, making old
products with new technologies has also been proven beneficial for the development of any
country. In many countries, it has been seen that in order to increase the development of the
business is crucial in the sense that through the incorporation of better benefits and bringing back
the old technologies will allow the economy to minimize the gaps within the economy. This is
mostly common in case of India. Previously Jute industry of India was one of the biggest

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commodities of export to outer countries. Nevertheless, due to heavy interference of British
government in the Jute Industry, the Jute industry started to fall. This is one of the concerns for
the government, as they wanted to bring back their old industrial belt. Not only in India but also
in many countries, this has been seen. In case of US, the damage of the automobile belt in the
region of Chicago, Michigan had given a big blow to the overall economy of the US. Though it
was self damaged as they tried to built warships in competing with the Russians. However, most
of the developing nations are not being able to increase the education level of their employees
due to decreasing rate of GDP and increasing price within the economy. Nowadays it is
important in the sense that due to the colonization effects, most of the countries lost the required
level of up gradation in them.
It is important in the sense that in order to increase the resource utilization both the
developing and developed nations will gain maximum from the trade. Through the incorporation
of better utilization of data mobilization is going to identify the potentiality of their both human
and capital resources. Specialization is another factor. Most of the companies building computer
does not need to be specialize on the manufacturing of the microchips and they can easily import
the microchips from the country that is having low opportunity costs and high comparative
advantages in making chips. This will definitely help both the economy to perform better in the
international trade.
Conclusion
The study has come to conclusion that education and the knowledge skills of the
employees are quite important for the improvement of any country. Through the increased level
of education, the developed economies will not be able to exploit the labors in the name of off
shoring. Moreover, if the economy is having highly skilled employees then they will be able to

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identify the opportunity and comparative advantages that are lying with the trade in developed
and developing nations. It is important to increase the resources so that they will not face any
monetary loss within their resources. It has been seen that companies like Larsen & Tourbo are
choosing the off shoring and they are settling their business headquarters in India. It is important
in the sense that through the incorporation of these policies, the development of resource
distribution is taking different form. Now they are taking locally available resources in order to
increase the development of their resource distribution so that they can minimize their costs of
operation. Even West Pac has invested in India, Singapore and is giving boost to the investment
and banking sectors.

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Reference list
BusinessDictionary.com. (2019). Offshoring vs. Outsourcing. [online] Available at:
http://www.businessdictionary.com/article/1090/offshoring-vs-outsourcing-d1412/ [Accessed 21
Apr. 2019].
IndustryWeek. (2013). 7 Key Factors Driving the Offshoring of Services. [online] Available at:
https://www.industryweek.com/supplier-relationships/7-key-factors-driving-offshoring-services
[Accessed 21 Apr. 2019].
Larsentoubro.com. (2019). L&T India | Larsen & Toubro. [online] Available at:
http://www.larsentoubro.com/ [Accessed 21 Apr. 2019].
Westpac.in. (2019). International trade, Export Import Services, India Westpac. [online]
Available at: https://www.westpac.in/corporate/trade-finance/ [Accessed 21 Apr. 2019].