Effects of Outsourcing Companies Positions to Low Cost Countries Part 8

Government Procurement: Federal, state and local governments are a significant consumer of high tech goods and services. Government spending increases aggregate demand and helps create jobs in the nations companies. If government contracts are directed overseas through offshore outsourcing, then the benefits of that spending for the U.S. economy may be significantly diminished because its multiplier effects will benefit the countries where the outsourcing companies are based and perform there work.

The relationship between federal investments in research and development and technological companies is also critically important. The National Academy of Sciences report, funding a Revolution: Government Support for Computing Research provides dramatic evidence of the many benefits of federal support for R&D at individual companies and educational institutions, as well as for their employees and the communities in which they live.

The argument that global sourcing of government contracts can result in cost-savings that benefit U.S. taxpayers is also attractive politically when federal and state budget deficits are growing. In many cases, this argument is based on short-term assessments of costs and benefits,

Conclusion: 

By Outsourcing companies in the IT position especially in Banking sector has been both Beneficial for the Lower cost country and US as the lower cost countries learn a lot from the Expertise of the skilled IT professionals of the advanced and developed countries. As enterprising foreign workers come to the United States, are trained by some of the best companies in the world and develop valuable experience and business contacts in their fields. Many return to their own countries to establish or work for new businesses that compete head to head with U.S. businesses. Former H-1B and L-1 employees have helped improve the global competitiveness of India's IT services industry, for example. And, as reported by the Centre for Industrial Competitiveness at the University of Massachusetts, H-1B workers are also being hired to help foreign-owned companies negotiate and manage contracts within the United States