Economics · Ch 11 — Liberalisation, Privatisation and Globalisation: An Appraisal
Outsourcing
Outsourcing
Outsourcing is one of the most important outcomes of the globalisation process, and one in which India has played a leading role.
What outsourcing means:
In outsourcing, a company hires regular services from external sources — most often from other countries — that were previously provided from within the company or from within its own country. For example, tasks such as legal advice, computer service, advertisement and security, which were once handled by the company's own respective departments, may instead be bought from outside providers, possibly located abroad.
Why outsourcing has grown so rapidly:
As a form of economic activity, outsourcing has intensified greatly in recent times, and the main reason is the growth of fast modes of communication, particularly Information Technology (IT). With modern telecommunication links, including the Internet, the text, voice and visual data connected with these services can be digitised and transmitted in real time across continents and national boundaries. This makes it possible to have work done in one country and delivered instantly to a client in another.
Box 3.2: Global Footprint!
Globalisation has let many Indian companies expand well beyond India's borders. ONGC Videsh, a subsidiary of the public sector Oil and Natural Gas Corporation, carries out oil and gas exploration and production projects in 16 countries. Tata Steel, a private company established in 1907, is one of the world's top ten steel companies, with operations in 26 countries and sales in 50, employing nearly 50,000 people abroad. HCL Technologies, one of India's top five IT companies, has offices in 31 countries and employs about 15,000 people abroad. Dr Reddy's Laboratories, which began as a small supplier of pharmaceutical goods to larger Indian companies, today runs manufacturing plants and research centres across the world.
(NCERT, Box 3.2)
The kinds of services outsourced to India:
A very wide range of services is now being outsourced by companies in developed countries to India, including:
- Voice-based business processes, popularly known as BPO (Business Process Outsourcing) or call centres
- Record keeping and accountancy
- Banking services
- Music recording, film editing and book transcription
- Clinical advice
- Even teaching
Why India in particular: …
Drawn by us to help you understand the concept clearly, and verified to make sure it's accurate. For exams, practice from your textbook's own diagram.
Own-drawn recreation of NCERT Fig. 3.1 (p.46) — not traced from the textbo …