Outsourcing Is Too Wild to Fit Economic Theory

Firms that consult and perform outsourcing work make use of all available space, time and labor. Global outsourcing is highly unpredictable and firms can perform projects from many locations, explains Andy Mukherjee for Bloomberg.com. Mukherjee provides an example: When Satyam Computer Services did one project for John Deere in Illinois, the firm rented nearby space, assigning 10 engineers to work on a code-writing project during the night. Fiber-optic cables stretching across the Pacific Ocean combined with satellite networks allow employees to perform all types of information-technology tasks anywhere in the world. As a result, firms seeking global growth open offices in diverse locations, increasingly serving new markets with languages other than English and recruiting diverse employees. – YaleGlobal