This discussion addresses the issue of outsourcing and its impact on the United States of America economy and the reasons why the 44th president of the United States should address it as a national concern that has affected the US economy and its citizenry negatively. Outsourcing is an act of a company where it gives out part of its operations to be done by a third party. The major reason for the company doing this is to increase its efficiency while it is concentrating on the main operations because the outsourced operations can be done better by a third party to ensure both cost-effectiveness and efficiency.
The United States is perceived as being the leader in technological innovations and, for that matter is places it in a better position of being an outsourcing vendor, where the technology which has been developed in the United States is applied in other countries in the world. Therefore its a form of exporting technology because the skilled American workforce moves out of the country and goes to other countries to apply the skills they have acquired within the United States, which involves the technology developed in the United States. The most outsourced technology in the United States is Information technology. The outsourcing issue in America as a technological leader has a negative impact on its population and economy, too, because the country’s technological leadership is threatened. The impacts of global outsourcing in the United States are explained as below;
The active participation of the United States in global outsourcing has made it lose its competitiveness as a technological leader because the technology which was developed in the United States is now applicable all over the world, thus not benefiting the innovators any longer as it’s at the hands of everybody. Most of the technological applications have been duplicated in countries where it was initially exporting to, for example, cotton in India. India was a chief importer of cotton, but because the technology was duplicated there by skilled American workers, it does not no more import cotton from the United States as their demand is satisfied by their local production and even export the surplus, which is certain to compete with the Unites States cotton in the world cotton market, thus a negative impact from global outsourcing on the economy.
The benefits of outsourcing can be perceived as short left, whereas it has a negative long-term effect on the workers abroad of American origin. The United States workers will always get a reasonable reward them helping outsourcing companies abroad, but these rewards are short-lived because they do not guarantee job security in the United States workforce abroad. There is a possibility that after the adoption of a given new technology, the workers using the technology will come to know the technicalities involved in the kind of technology they are using, that is, learning by doing.
This learning by doing makes the technology available to all persons, which makes it so basic in the sense that they do not need technicians anymore as they can do it on their own. This situation makes it hard for the renewal of American workers’ contracts abroad as the technology is now known, and it is better for these foreign countries to employ one of their own, thus trashing the American workforce abroad. This situation is common in Asian and European countries, which are also best characterized by their competence in imitating and even making it better than it was when it came into their country, thus sharpening a sword for one self-slaughter.
Global outsourcing has increased the level of unemployment in the country in the sense that companies have been forced to close down because the demand for their products has been lowered by duplication of technology at the countries where they were exporting to. A lot of capital has also been locked up in these closed down companies as capital goods can never be converted to doing anything else other than what they were designed to.
This closing down of manufacturing companies affects the United Stated economy negatively in the sense that more unemployment cases are reported, and also the general purchasing power of the population is lowered. This has an adverse effect on the federal government operations because the scope of it generating income to finance its operations is narrowed as income and co-operate taxes are reduced caused by low employment levels and closure of companies, respectively. Given the above disadvantages of outsourcing, the 44th United States President should be designing policies that will be directed towards stopping global outsourcing in the United States of America, where the policies should include technological copyrighting and the control of the American workforce abroad, which mostly involves technological transfers.