What is driving U.S. companies to outsource abroad?

I don't believe it is deficiencies in American workers, lack of interest, education or the availability of skills in other countries that are driving companies abroad.


Why don't companies consider outsourcing certain types of work to American Indians? Building infrastructure in some of the most impoverished regions of the U.S. seems to be a very good idea . . . not to mention the tax benefits, easily trainable workforce,freight cost savings, and much more . . .

Well you seem smart so I don't think that the following will be too deep...

Outsourcing, as you know, is the act of giving a third-party the responsibility of running what would otherwise be an internal system or service. Companies that are looking at business process outsourcing are hoping to realize cost savings by handing the work to a third-party that can take advantage of economies of scale by doing the same work for many companies.

Outsourcing has other advantages including:

脴 Outsourcers can keep teams focused on internal customer needs for support and maintenance during the long application life cycle.

脴 Outsourcers are more likely to be able to achieve high levels of Capability Maturity Model (CMM) rating, given that they focus on operations for multiple clients. This is harder to achieve in a small, internal division.

脴 Outsourcers are able to keep developers busy 100% of the time, sharing them between multiple clients. Internal divisions find it hard to do this, given that development is a much shorter time period compared to application support and maintenance.

脴 Outsourcers find it easier to train staff on new technologies, given their economies of scale.

脴 Companies can use outsourced operations to start operations that use new technology in a much shorter time period than otherwise might be the case if internal staff were used.

脴 Outsourcing can be used as a mechanism to gradually retire old systems. This means that careers of employees that are outsourced can better be kept alive; if such operations are kept within a company, old systems become harder to maintain as staff leave to seek different opportunities before the system is eventually shut down.

So, as you see, the idea is simply to give specific responsibilities to a company which focuses only on those responsibilities (for many companies). Unfortunately, I would have to disagree with you in that education and drive are not factors in this idea as well. Americans are, by and large, very lazy, and since we are a society raised to think that more is better, we want everything in life with as little effort as possible. This is why you see so much credit card debt in this country. Most people choose to live beyond what their education allows them to earn. Foreigners (India as a great example) have a much higher educational level (per capita), they don't have a wealthy society which has been corrupted by greed, and they are happy to work and work and work and work for a smaller compensation until the job is done.

It's all about profits. Where can my company get a quality product for the least amount of money?

We have laws in the US that mandate how much you pay people, how much time off they get, and reasons for firing them. In other countries you don't have to worry about all that.

If you want companies to give Americans jobs, show them a bottom line that makes sense...unions have ruined manufacturing in America, period.

Agents of Public Companies have a fiduciary duty to the shareholders to maximize the value of a company. The value of a company is usually measured by it's expected revenue and profit.

By outsourcing abroad a company:
1) opens up new markets and intern has the potential to increase it's revenue.
2) usually reduces labor costs, thereby increasing profit.

"Globalism", thank a lib.

It's Always about money-MONEY-

The American Indians are american citizens so that wouldn't be "outsourcing". American Indians like all Americans would be legally entitled to at least minimum wage, and hopefully a living wage. Many other countries where we outsource to don't have such protections. Companies outsourse abroad usually to take advantage of lax labor, minimum wage and child labor laws. This all translates to PROFIT which in the capitalist society in which we live is everything.
This is the same reason rich people don't have any intention of curbing illegal immigration in this country.