Ethos

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Ethos 

A sculpture representing Ethos outside the Australian Capital Territory Legislative Assembly in Canberra, Australia

Ethos (/ˈiːθɒs/ or US: /ˈiːθoʊs/) is a Greek word meaning "character" that is used to describe the guiding beliefs or ideals that characterize a community, nation, or ideology; and the balance between caution, and passion. The Greeks also used this word to refer to the power of music to influence emotions, behaviors, and even morals. Early Greek stories of Orpheus exhibit this idea in a compelling way. The word's use in rhetoric is closely based on the Greek terminology used by Aristotle in his concept of the three artistic proofs or modes of persuasion. It gives credit to the speaker, or the speaker is taking credit.

Etymology and origin

Ethos (ἦθος, ἔθος; plurals: ethe, ἤθη; ethea, ἤθεα) is a Greek word originally meaning "accustomed place" (as in ἤθεα ἵππων "the habitats of horses/", Iliad 6.511, 15.268), "custom, habit", equivalent to Latin mores.

Ethos forms the root of ethikos (ἠθικός), meaning "morality, showing moral character". As an adjective in the neuter plural form ta ethika.

Current usage

In modern usage, ethos denotes the disposition, character, or fundamental values peculiar to a specific person, people, corporation, culture, or movement. For example, the poet and critic T. S. Eliot wrote in 1940 that "the general ethos of the people they have to govern determines the behavior of politicians". Similarly the historian Orlando Figes wrote in 1996 that in Soviet Russia of the 1920s "the ethos of the Communist party dominated every aspect of public life".

Ethos may change in response to new ideas or forces. For example, according to the Jewish historian Arie Krampf, ideas of economic modernization which were imported into Palestine in the 1930s brought about "the abandonment of the agrarian ethos and the reception of...the ethos of rapid development".

Rhetoric

In rhetoric, ethos (credibility of the speaker) is one of the three artistic proofs (pistis, πίστις) or modes of persuasion (other principles being logos and pathos) discussed by Aristotle in 'Rhetoric' as a component of argument. Speakers must establish ethos from the start. This can involve "moral competence" only; Aristotle, however, broadens the concept to include expertise and knowledge. Ethos is limited, in his view, by what the speaker says. Others, however, contend that a speaker's ethos extends to and is shaped by the overall moral character and history of the speaker—that is, what people think of his or her character before the speech has even begun (cf Isocrates).

According to Aristotle, there are three categories of ethos:

• phronesis – useful skills & practical wisdom
• arete – virtue, goodwill
• eunoia – goodwill towards the audience

In a sense, ethos does not belong to the speaker but to the audience and it's appealing to the audience's emotions. Thus, it is the audience that determines whether a speaker is a high- or a low-ethos speaker. Violations of ethos include:

• The speaker has a direct interest in the outcome of the debate (e.g. a person pleading innocence of a crime);
• The speaker has a vested interest or ulterior motive in the outcome of the debate;
• The speaker has no expertise (e.g. a lawyer giving a speech on space flight is less convincing than an astronaut giving the same speech).

Completely dismissing an argument based on any of the above violations of ethos is an informal fallacy (Appeal to motive). The argument may indeed be suspect; but is not, in itself, invalid.

Examples of ethos:

I am a climate scientist, so I am qualified to tell you about climate change and its affects on the environment.

As a history teacher I am qualified to hold this Gettysburg address tour today.

Additional Readings

The Essential Guide to Rhetoric 

Modern interpretations

Although Plato never uses the term "ethos" in his extant corpus, scholar Collin Bjork; a communicator, podcaster, and digital rhetorician, argues that Plato dramatizes the complexity of rhetorical ethos in the Apology of Socrates. For Aristotle, a speaker's ethos was a rhetorical strategy employed by an orator whose purpose was to "inspire trust in his audience" (Rhetorica 1380). Ethos was therefore achieved through the orator's "good sense, good moral character, and goodwill", and central to Aristotelian virtue ethics was the notion that this "good moral character" was increased in virtuous degree by habit (Rhetorica 1380). Ethos also is related to a character's habit as well (The Essential Guide to Rhetoric, 2018). The person's character is related to a person's habits (The Essential Guide to Rhetoric, 2018). Aristotle links virtue, habituation, and ethos most succinctly in Book II of Nicomachean Ethics: "Virtue, then, being of two kinds, intellectual and moral, intellectual virtue in the main owes both its birth and its growth to teaching [...] while moral virtue comes about as a result of habit, whence also its name ethike is one that is formed by a slight variation from the word ethos (habit)" (952). Discussing women and rhetoric, scholar Karlyn Kohrs Campbell notes that entering the public sphere was considered an act of moral transgression for females of the nineteenth century: "Women who formed moral reform and abolitionist societies, and who made speeches, held conventions, and published newspapers, entered the public sphere and thereby lost their claims to purity and piety" (13). Crafting an ethos within such restrictive moral codes, therefore, meant adhering to membership of what Nancy Fraser and Michael Warner have theorized as counter publics. While Warner contends that members of counter publics are afforded little opportunity to join the dominant public and therefore exert true agency, Nancy Fraser has problematized Habermas's conception of the public sphere as a dominant "social totality" by theorizing "subaltern counter publics", which function as alternative publics that represent "parallel discursive arenas where members of subordinated social groups invent and circulate counterdiscourses, which in turn permit them to formulate oppositional interpretations of their identities, interests, and needs" (67).

Though feminist rhetorical theorists have begun to offer ways of conceiving of ethos that are influenced by postmodern concepts of identity, they remain cognizant of how these classical associations have shaped and still do shape women's use of the rhetorical tool. Johanna Schmertz draws on Aristotelian ethos to reinterpret the term alongside feminist theories of subjectivity, writing that, "Instead of following a tradition that, it seems to me, reads ethos somewhat in the manner of an Aristotelian quality proper to the speaker's identity, a quality capable of being deployed as needed to fit a rhetorical situation, I will ask how ethos may be dislodged from identity and read in such a way as to multiply the positions from which women may speak" (83). Rhetorical scholar and professor Kate Ronald's claim that "ethos is the appeal residing in the tension between the speaker's private and public self", (39) also presents a more postmodern view of ethos that links credibility and identity. Similarly, Nedra Reynolds and Susan Jarratt echo this view of ethos as a fluid and dynamic set of identifications, arguing that "these split selves are guises, but they are not distortions or lies in the philosopher's sense. Rather they are 'deceptions' in the sophistic sense: recognition of the ways one is positioned multiply differently" (56).

Rhetorical scholar Michael Halloran has argued that the classical understanding of ethos "emphasizes the conventional rather than the idiosyncratic, the public rather than the private" (60). Commenting further on the classical etymology and understanding of ethos, Halloran illuminates the interdependence between ethos and cultural context by arguing that "To have ethos is to manifest the virtues most valued by the culture to and for which one speaks" (60). While scholars do not all agree on the dominant sphere in which ethos may be crafted, some agree that ethos is formed through the negotiation between private experience and the public, rhetorical act of self-expression. Karen Burke LeFevre's argument in Invention as Social Act situates this negotiation between the private and the public, writing that ethos "appears in that socially created space, in the 'between', the point of intersection between speaker or writer and listener or reader" (45-46).

According to Nedra Reynolds, "ethos, like postmodern subjectivity, shifts and changes over time, across texts, and around competing spaces" (336). However, Reynolds additionally discusses how one might clarify the meaning of ethos within rhetoric as expressing inherently communal roots. This stands in direct opposition to what she describes as the claim "that ethos can be faked or 'manipulated'" because individuals would be formed by the values of their culture and not the other way around (336). Rhetorical scholar John Oddo also suggests that ethos is negotiated across a community and not simply a manifestation of the self (47). In the era of mass-mediated communication, Oddo contends, one's ethos is often created by journalists and dispersed over multiple news texts. With this in mind, Oddo coins the term intertextual ethos, the notion that a public figure's "ethos is constituted within and across a range of mass media voices" (48).

In "Black Women Writers and the Trouble with Ethos", scholar Coretta Pittman notes that race has been generally absent from theories of ethos construction and that this concept is troubling for black women. Pittman writes, "Unfortunately, in the history of race relations in America, black Americans' ethos ranks low among other racial and ethnic groups in the United States. More often than not, their moral characters have been associated with a criminalized and sexualized ethos in visual and print culture".

Character in Greek tragedy

The ways in which characters were constructed is important when considering ethos, or character, in Greek tragedy. Augustus Taber Murray explains that the depiction of a character was limited by the circumstances under which Greek tragedies were presented. These include the single unchanging scene, necessary use of the chorus, small number of characters limiting interaction, large outdoor theatres, and the use of masks, which all influenced characters to be more formal and simple. Murray also declares that the inherent characteristics of Greek tragedies are important in the makeup of the characters. One of these is the fact that tragedy characters were nearly always mythical characters. This limited the character, as well as the plot, to the already well-known myth from which the material of the play was taken. The other characteristic is the relatively short length of most Greek plays. This limited the scope of the play and characterization so that the characters were defined by one overriding motivation toward a certain objective from the beginning of the play.

However, Murray clarifies that strict constancy is not always the rule in Greek tragedy characters. To support this, he points out the example of Antigone who, even though she strongly defies Creon at the beginning of the play, begins to doubt her cause and plead for mercy as she is led to her execution.

Several other aspects of the character element in ancient Greek tragedy are worth noting. One of these, which C. Garton discusses, is the fact that either because of contradictory action or incomplete description, the character cannot be viewed as an individual, or the reader is left confused about the character. One method of reconciling this would be to consider these characters to be flat, or type-cast, instead of round. This would mean that most of the information about the character centers around one main quality or viewpoint. Comparable to the flat character option, the reader could also view the character as a symbol. Examples of this might be the Eumenides as vengeance, or Clytemnestra as symbolizing ancestral curse. Yet another means of looking at character, according to Tycho von Wilamowitz and Howald, is the idea that characterization is not important. This idea is maintained by the theory that the play is meant to affect the viewer or reader scene by scene, with attention being only focused on the section at hand. This point of view also holds that the different figures in a play are only characterized by the situation surrounding them, and only enough so that their actions can be understood.

Garet makes three more observations about a character in Greek tragedy. The first is an abundant variety of types of characters in Greek tragedy. His second observation is that the reader or viewer's need for characters to display a unified identity that is similar to human nature is usually fulfilled. Thirdly, characters in tragedies include incongruities and idiosyncrasies.

Another aspect stated by Garet is that tragedy plays are composed of language, character, and action, and the interactions of these three components; these are fused together throughout the play. He explains that action normally determines the major means of characterization. For example, the play Julius Caesar, is a good example for a character without credibility, Brutus. Another principle he states is the importance of these three components' effect on each other; the important repercussion of this being character's impact on action.

Augustus Taber Murray also examines the importance and degree of interaction between plot and character. He does this by discussing Aristotle's statements about plot and character in his Poetics: that plot can exist without character, but the character cannot exist without plot, and so the character is secondary to the plot. Murray maintains that Aristotle did not mean that complicated plot should hold the highest place in a tragedy play. This is because the plot was, more often than not, simple and therefore not a major point of tragic interest. Murray conjectures that people today do not accept Aristotle's statement about character and plot because to modern people, the most memorable things about tragedy plays are often the characters. However, Murray does concede that Aristotle is correct in that "[t]here can be no portrayal of character [...] without at least a skeleton outline of plot".

One other term frequently used to describe the dramatic revelation of character in writing is "persona." While the concept of ethos has traveled through the rhetorical tradition, the concept of persona has emerged from the literary tradition, and is associated with a theatrical mask. Roger Cherry explores the distinctions between ethos and pathos to mark the distance between a writer's autobiographical self and the author's discursive self as projected through the narrator. The two terms also help to refine distinctions between situated and invented ethos. Situated ethos relies on a speaker's or writer's durable position of authority in the world; invented ethos relies more on the immediate circumstances of the rhetorical situation.

Character, or ethos, in pictorial narrative

Ethos, or character, also appears in the visual art of famous or mythological ancient Greek events in murals, on pottery, and sculpture referred to generally as pictorial narrative. Aristotle even praised the ancient Greek painter Polygnotos because his paintings included characterization. The way in which the subject and his actions are portrayed in visual art can convey the subject's ethical character and through this the work's overall theme, just as effectively as poetry or drama can. This characterization portrayed men as they ought to be, which is the same as Aristotle's idea of what ethos or character should be in tragedy. (Stansbury-O'Donnell, p. 178) Professor Mark D. Stansbury-O'Donnell states that pictorial narratives often had ethos as its focus, and was therefore concerned with showing the character's moral choices. (Stansbury-O'Donnell, p. 175) David Castriota, agreeing with Stansbury-O'Donnell's statement, says that the main way Aristotle considered poetry and visual arts to be on equal levels was in character representation and its effect on action. However, Castriota also maintains about Aristotle's opinion that "his interest has to do with the influence that such ethical representation may exert upon the public". Castriota also explains that according to Aristotle, "[t]he activity of these artists is to be judged worthy and useful above all because exposure of their work is beneficial to the polis". Accordingly, this was the reason for the representation of character, or ethos, in public paintings and sculptures. In order to portray the character's choice, the pictorial narrative often shows an earlier scene than when the action was committed. Stansbury-O'Donnell gives an example of this in the form of a picture by the ancient Greek artist Exekia which shows the Greek hero Ajax planting his sword in the ground in preparation to commit suicide, instead of the actual suicide scene. (Stansbury-O'Donnell, p. 177.) Additionally, Castriota explains that ancient Greek art expresses the idea that character was the major factor influencing the outcome of the Greeks' conflicts against their enemies. Because of this, "ethos was the essential variable in the equation or analogy between myth and actuality".

Outsourcing

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Outsourcing

Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally, and sometimes involves transferring employees and assets from one firm to another.

The term outsourcing, which came from the phrase outside resourcing, originated no later than 1981. The concept, which The Economist says has "made its presence felt since the time of the Second World War", often involves the contracting of a business process (e.g., payroll processing, claims processing), operational, and/or non-core functions, such as manufacturing, facility management, call centre/call centre support.

The practice of handing over control of public services to private enterprises, even if on a short-term limited basis, may also be described as "outsourcing".

Outsourcing includes both foreign and domestic contracting, and sometimes includes offshoring (relocating a business function to a distant country) or nearshoring (transferring a business process to a nearby country).

Offshoring and outsourcing are not mutually inclusive: there can be one without the other. They can be intertwined (offshore outsourcing), and can be individually or jointly, partially or completely reversed, involving terms such as reshoring, inshoring, and insourcing.

Terminology

• Offshoring is moving the work to a distant country. If the distant workplace is a foreign subsidiary/owned by the company, then the offshore operation is a captive, sometimes referred to as in-house offshore.
• Offshore outsourcing is the practice of hiring an external organization to perform some business functions ("Outsourcing") in a country other than the one where the products or services are actually performed, developed or manufactured ("Offshore").
• Insourcing entails bringing processes handled by third-party firms in-house, and is sometimes accomplished via vertical integration.
• Nearshoring refers to outsource to a nearby country.
• Farmshoring refers to outsourcing to companies in more rural locations within the same country.
• Homeshoring (also known as Homesourcing) is a form of IT-enabled "transfer of service industry employment from offices to home-based ... with appropriate telephone and Internet facilities". These remote work positions may be customer-facing or back office, and the workers may be employees or independent contractors.
• In-housing refers to hiring employees or using existing employees/resources to undo an outsourcing.
• An Intermediary is a business which provides a contract service to another organization while contracting out that same service.

Acronyms

Some of the acronyms related to BPO (Business Process Outsourcing) are:

• EPO - Engineering Process Outsourcing
• ITO - Information Technology Outsourcing
• KPO - Knowledge Process Outsourcing
• LPO - Legal Process Outsourcing
• RPO - Recruitment Process Outsourcing
• HRO - Human Resource Outsourcing

Overview

Motivations

Global labor arbitrage can provide major financial savings from lower international labor rates, which could be a major motivation for offshoring. Cost savings from economies of scale and specialization can also motivate outsourcing, even if not offshoring. Since about 2015 indirect revenue benefits have increasingly become additional motivators.

Another motivation is speed to market. To make this work, a new process was developed: "outsource the outsourcing process". Details of managing DuPont's CIO Cinda Hallman's $4 billion 10-year outsourcing contract with Computer Sciences Corporation and Accenture were outsourced, thus avoiding "inventing a process if we'd done it in-house". A term subsequently developed to describe this is midsourcing.

Outsourcing can offer greater budget flexibility and control by allowing organizations to pay for the services and business functions they need, when they need them. It is often perceived to reduce hiring and training specialized staff, to make available specialized expertise, and to decrease capital, operating expenses, and risk.

"Do what you do best and outsource the rest" has become an internationally recognized business tagline first "coined and developed" in the 1990s by management consultant Peter Drucker. The slogan was primarily used to advocate outsourcing as a viable business strategy. Drucker began explaining the concept of "Outsourcing" as early as 1989 in his Wall Street Journal article entitled "Sell the Mailroom".

The biggest difference between outsourcing and in-house is with regards to the difference in ownership - where the former usually presupposes integration of business processes under a different ownership, of which the client business has minimal to no control over. This requires the use of Outsourcing Relationship Management.

Sometimes the effect of what looks like outsourcing from one side and insourcing from the other side can be unexpected: The New York Times reported in 2001 that "6.4 million Americans .. worked for foreign companies as of 2001, [but] more jobs are being outsourced than" [the reverse].

Agreements

Two organizations may enter into a contractual agreement involving an exchange of services, expertise, and payments. Outsourcing is said to help firms to perform well in their core competencies, fuel innovation, and mitigate a shortage of skill or expertise in the areas where they want to outsource.

History

20th century

Following the adding of management layers in the 1950s and 1960s to support expansion for the sake of economy of scale, corporations found that agility and added profits could be obtained by focusing on core strengths; the 1970s and 1980s were the beginnings of what later was named outsourcing. Kodak's 1989 "outsourcing most of its information technology systems" was followed by others during the 1990s.

In 2013, the International Association of Outsourcing Professionals gave recognition to Electronic Data Systems Corporation's Morton H. Meyerson who, in 1967, proposed the business model that eventually became known as outsourcing.

IT-enabled services offshore outsourcing

Growth of offshoring of IT-enabled services, although not universally accepted, both to subsidiaries and to outside companies (offshore outsourcing) is linked to the availability of large amounts of reliable and affordable communication infrastructure following the telecommunication and Internet expansion of the late 1990s. Services making use of low-cost countries included

• back-office and administrative functions, such as finance and accounting, HR, and legal
• call centers and other customer-facing departments, such as marketing and sales services
• IT infrastructure and application development
• knowledge services, including engineering support, product design, research and development, and analytics.

Early 21st century

In the early 21st century, businesses increasingly outsourced to suppliers outside their own country, sometimes referred to as offshoring or offshore outsourcing. Other options subsequently emerged: nearshoring, crowdsourcing, multisourcing, strategic alliances/strategic partnerships, strategic outsourcing.

From Drucker's perspective, a company should only seek to subcontract in those areas in which it demonstrated no special ability. The business strategy outlined by his slogan recommended that companies should take advantage of a specialist provider's knowledge and economies of scale to improve performance and achieve the service needed.

In 2009, by way of recognition, Peter Drucker posthumously received a significant honor when he was inducted into the Outsourcing Hall of Fame for his outstanding work in the field.

Limitations due to growth

Inflation, high domestic interest rates, and economic growth pushed India's IT salaries 10 - 15%, making some jobs relatively "too" expensive, compared to other offshoring destinations. Areas for advancing within the value chain included research and development, equity analysis, tax-return processing, radiological analysis, and medical transcription.

Offshore alternatives

Japanese companies outsourced to China, particularly to formerly Japanese-occupied cities. German companies have outsourced to Eastern European countries with German-language affiliation, such as Poland and Romania. French companies outsource to North Africa for similar reasons.

For Australian IT companies, Indonesia is one of the major choice of offshoring destination. Near-shore location, common time zone and adequate IT work force are the reasons for offshoring IT services to Indonesia.

Growth of white-collar outsourcing

Although offshoring initially focused on manufacturing, white-collar offshoring/outsourcing has grown rapidly since the early 21st century. The digital workforce of countries like India and China are only paid a fraction of what would be minimum wage in the US. On average, software engineers are getting paid between 250,000 and 1,500,000 rupees (US$4,000 to US$23,000) in India as opposed to $40,000–$100,000 in countries such as the US and Canada. Closer to the US, Costa Rica has become a big source for the advantages of a highly educated labor force, a large bilingual population, stable democratic government, and similar time zones with the United States. It takes only a few hours to travel between Costa Rica and the US. Companies such as Intel, Procter & Gamble, HP, Gensler, Amazon and Bank of America have big operations in Costa Rica.

Unlike outsourced manufacturing, outsourced white collar workers have flextime and can choose their working hours, and for which companies to work. Clients benefit from remote work, reduced office space, management salary, and employee benefits as these individuals are independent contractors.

However, ending a government oursourcing arrangement has its difficulties too.

Reasons for outsourcing

While U.S. companies do not outsource to reduce high top level executive or managerial costs, they primarily outsource to reduce peripheral and "non-core" business expenses. Further reasons are higher taxes, high energy costs, and excessive government regulation or mandates.

Mandated benefits like social security, Medicare, and safety protection (OSHA regulations) are also motivators. By contrast, executive pay in the United States in 2007, which could exceed 400 times more than average workers — a gap 20 times bigger than it was in 1965 is not a factor.

Other reasons include reducing and controlling operating costs, improving company focus, gaining access to world-class capabilities, tax credits, freeing internal resources for other purposes, streamlining or increasing efficiency for time-consuming functions, and maximizing use of external resources. For small businesses, contracting/subcontracting/"outsourcing" might be done to improve work-life balance

Outsourcing models

There are many outsourcing models, with variations by country, year and industry.

Another approach is to differentiate between tactical and strategic outsourcing models. Tactical models include:

• Staff augmentation
• Project-based
• To gain expertise not available in-house.

Strategic consultancy includes for Business process improvement.

Innovation outsourcing

When offshore outsourcing knowledge work, firms heavily rely on the availability of technical personnel at offshore locations. One of the challenges in offshoring engineering innovation is a reduction in quality.

Co-sourcing

Co-sourcing is a hybrid of internal staff supplemented by an external service provider. Co-sourcing can minimize sourcing risks, increase transparency, clarity and lend toward better control than fully outsourced.

Co-sourcing services can supplement internal audit staff with specialized skills such as information risk management or integrity services, or help during peak periods, or similarly for other areas such as software development or human resources.

Identity management co-sourcing

Identity management co-sourcing is when on-site hardware interacts with outside identity services.

This contrasts with an "all in-the-cloud" service scenario, where the identity service is built, hosted and operated by the service provider in an externally hosted, cloud computing infrastructure.

Offshore Software R&D Co-sourcing

Offshore Software R&D is the provision of software development services by a supplier (whether external or internal) located in a different country from the one where the software will be used. The global software R&D services market, as contrasted to Information Technology Outsourcing (ITO) and BPO, is rather young and currently is at a relatively early stage of development.

Countries involved in outsourced software R&D

Canada, India, Ireland, and Israel were the four leading countries as of 2003. Although many countries have participated in the Offshore outsourcing of software development, their involvement in co-sourced and outsourced Research & Development (R&D) was somewhat limited. Canada, the second largest by 2009, had 21%

As of 2018, the top three were deemed by one "research-based policy analysis and commentary from leading economists" as China, India and Israel."

Gartner Group adds in Russia, but does not make clear whether this is pure R&D or run-of-the-mill IT outsourcing.

Usability issues in offshore development

The main driver for offshoring development work has been the greater availability of developers at a lower cost than in the home country. However, the rise in offshore development has taken place in parallel with an increased awareness of the importance of usability, and the user experience, in software. Outsourced development poses special problems for development, i.e. the more formal, contractual relationship between the supplier and client, and geographical separation place greater distance between the developers and users, which makes it harder to reflect the users' needs in the final product. This problem is exacerbated if the development is offshore. Further complications arise from cultural differences, which apply even if the development is carried out by an in-house offshore team.

Historically offshore development concentrated on back office functions but, as offshoring has grown, a wider range of applications have been developed. Offshore suppliers have had to respond to the commercial pressures arising from usability issues by building up their usability expertise. Indeed, this problem has presented an attractive opportunity to some suppliers to move up market and offer higher value services.

Legal issues

Offshore Software R&D means that company A turns over responsibility, in whole or in part, of an in-house software development to company B whose location is outside of company A's national jurisdiction. Maximizing the economic value of an offshore software development asset critically depends on understanding how best to use the available forms of legal regulations to protect intellectual rights. If the vendor cannot be trusted to protect trade secrets, then the risks of an offshoring software development may outweigh its potential benefits. Hence, it is critical to review the intellectual property policy of the potential offshoring supplier. The intellectual property protection policy of an offshore software development company must be reflected in these crucial documents: General Agreement; Non-Disclosure Agreement; Employee Confidentiality Contract.

2000-2012 R&D

As forecast in 2003, R&D is outsourced. Ownership of intellectual property by the outsourcing company, despite outside development, was the goal. To defend against tax-motivated cost-shifting, the US government passed regulations in 2006 to make outsourcing research harder. Despite many R&D contracts given to Indian universities and labs, only some research solutions were patented.

While Pfizer moved some of its R&D from the UK to India, a Forbes article suggested that it is increasingly more dangerous to offshore IP sensitive projects to India, because of India's continued ignorance of patent regulations. In turn, companies such as Pfizer and Novartis, have lost rights to sell many of their cancer medications in India because of lack of IP protection.

Future trends

A 2018 "The Future of Outsourcing" report began with "The future of outsourcing is digital." The ""Do what you do best and outsource the rest" approach means that "integration with retained systems" is the new transition challenge - people training still exists, but is merely an "also."

There is more complexity than before, especially when the outside company may be an integrator.

While the number of technically skilled labor grows in India, Indian offshore companies are increasingly tapping into the skilled labor already available in Eastern Europe to better address the needs of the Western European R&D market.

Changed government outsourcing focus

Forbes considered the US Presidential election of 2016 "the most disruptive change agent for the outsourcing industry", especially the renewed "invest in America" goal highlighted in campaigning, but the magazine tepidly reversed direction in 2019 as to the outcome for employment.

Furthermore, there are growing legal requirements for data protection, where obligations and implementation details must be understood by both sides. This includes dealing with customer rights.

Implications

Performance measurement

Focusing on software quality metrics is a good way to maintain track of how well a project is performing.

Management processes

Globalization and complex supply chains, along with greater physical distance between higher management and the production-floor employees often requires a change in management methodologies, as inspection and feedback may not be as direct and frequent as in internal processes. This often requires the assimilation of new communication methods such as voice over IP, instant messaging, and Issue tracking systems, new time management methods such as time tracking software, and new cost- and schedule-assessment tools such as cost estimation software.

The term Transition methodology describes the process of migrating knowledge, systems, and operating capabilities between the two sides.

Communications and customer service

In the area of call center outsourcing, especially when combined with offshoring, agents may speak with different linguistic features such as accents, word use and phraseology, which may impede comprehension.

Governance

In 1979, Nobel laureate Oliver E. Williamson wrote that the governance structure is the "framework within which the integrity of a transaction is decided." Adding further that "because contracts are varied and complex, governance structures vary with the nature of the transaction." University of Tennessee researchers have been studying complex outsourcing relationships since 2003. Emerging thinking regarding strategic outsourcing is focusing on creating a contract structure in which the parties have a vested interest in managing what are often highly complex business arrangements in a more collaborative, aligned, flexible, and credible way.

Security

Reduced security, sometimes related to lower loyalty may occur, even when "outsourced" staff change their legal status but not their desk. While security and compliance issues are supposed to be addressed through the contract between the client and the suppliers, fraud cases have been reported.

In April 2005, a high-profile case involved the theft of $350,000 from four Citibank customers when call-center workers acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank.

Information Technology

Richard Baldwin's 2006 The Great Unbundling work was followed in 2012 by Globalization's Second Acceleration (the Second Unbundling) and in 2016 by The Great Convergence: Information Technology and the New Globalization. It is here, rather than in manufacturing, that the bits economy can advance in ways that the economy of atoms and things can't: an early 1990s Newsweek had a half page cartoon showing someone who had just ordered a pizza online, and was seeking help to download it.

Step-in rights

Main article: Step-in rights

If both sides have a contract clause permitting step-in rights, then there is a right, though not an obligation, to take over a task that is not going well, or even the entire project.

Issues and reversals

Demonstrating need to ensure outsourcing gains are realised and losses avoided at a summit in London in 2009

A number of outsourcings and offshorings that were deemed failures led to reversals signaled by use of terms such as Insourcing and reshoring. The New York Times reported in 2017 that IBM "plans to hire 25,000 more workers in the United States over the next four years," overlapping India-based Infosys's "10,000 workers in the United States over the next two years." A clue to a tipping point having been reached was a short essay titled "Maybe You Shouldn't Outsource Everything After All" and the longer "That Job Sent to India May Now Go to Indiana."

Among problems encountered were supply-and-demand induced raises in salaries and lost benefits of similar-time-zone. Other issues were differences in language and culture. Another reason for a decrease in outsourcing is that many jobs that were subcontracted abroad have been replaced by technological advances.

According to a 2005 Deloitte Consulting survey, a quarter of the companies which had outsourced tasks reversed their strategy.

These reversals, however, did not undo the damage. New factories often:

• were in different locations
• needed different skill sets
• used more automation.

Public opinion in the US and other Western powers opposing outsourcing was particularly strengthened by the drastic increase in unemployment as a result of the 2007–2008 financial crisis. From 2000 to 2010, the US experienced a net loss of 687,000 jobs due to outsourcing, primarily in the computers and electronics sector. Public disenchantment with outsourcing has not only stirred political responses, as seen in the 2012 US presidential campaigns, but it has also made companies more reluctant to outsource or offshore jobs.

A counterswing depicted by a 2016 Deloitte survey suggested that companies are no longer reluctant to outsource. Deloitte's survey identified three trends:

• Companies are broadening their approach to outsourcing as they begin to view it as more than a simple cost-cutting play
• Organizations are "redefining the ways they enter into outsourcing relationships and manage the ensuing risks".
• Organizations are changing the way they are managing their relationships with outsourcing providers to "maximize the value of those relationships".

Insourcing

Insourcing is the process of reversing an outsourcing, possibly using help from those not currently part of the inhouse staff.

Outsourcing has gone through many iterations and reinventions, and some outsourcing contracts have been partially or fully reversed. Often the reason is to maintain control of critical production or competencies, and insourcing is used to reduce costs of taxes, labor and transportation.

Regional insourcing, a related term, is when a company assigns work to a subsidiary that is within the same country. This differs from onshoring and reshoring: these may be either inside or outside the company.

Regional insourcing

Regional insourcing is a process in which a company establishes satellite locations for specific entities of their business, making use of advantages one state may have over another This concept focuses on the delegating or reassigning of procedures, functions, or jobs from production within a business in one location to another internal entity that specializes in that operation. This allows companies to streamline production, boost competency, and increase their bottom line.

This competitive strategy applies the classical argument of Adam Smith, which posits that two nations would benefit more from one another by trading the goods that they are more proficient at manufacturing.

Net effect on jobs

To those who are concerned that nations may be losing a net number of jobs due to outsourcing, some point out that insourcing also occurs. A 2004 study in the United States, the United Kingdom, and many other industrialized countries more jobs are insourced than outsourced. The New York Times disagreed, and wrote that free trade with low-wage countries is win-lose for many employees who find their jobs offshored or with stagnating wages.

The impact of offshore outsourcing, according to two estimates published by The Economist showed unequal effect during the period studied 2004 to 2015, ranging from 150,000 to as high as 300,000 jobs lost per year.

In 2010, a group of manufacturers started the Reshoring Initiative, focusing on bringing manufacturing jobs for American companies back to the country. Their data indicated that 140,000 American jobs were lost in 2003 due to offshoring. Eleven years later in 2014, the United States recovered 10,000 of those offshored positions; this marked the highest net gain in 20 years. More than 90% of the jobs that American companies "offshored" and outsourced manufacturing to low cost countries such as China, Malaysia and Vietnam did not return.

Insourcing crossbreeds

The fluctuation of prefixes and names give rise to many more "cross-breeds" of insourcing. For example, "offshore insourcing" is "when companies set up their own "captive" process centers overseas, sometimes called a Captive Service, taking advantage of their cheaper surroundings while maintaining control of their back-office work and business processes." "Remote insourcing" refers to hiring developers to work in-house from virtual (remote) facilities.

In the United States

A 2012 series of articles in Atlantic Magazine highlighted a turning of the tide for parts of the USA's manufacturing industry. Specific causes identified include rising third-world wages, recognition of hidden off-shoring costs, innovations in design/manufacture/assembly/time-to-market, increasing fuel and transportation costs, falling energy costs in the US, increasing US labor productivity, and union flexibility. Hiring at GE's giant Appliance Park in Louisville increased 90% during 2012.

Standpoint of labor

From the standpoint of labor, outsourcing may represent a new threat, contributing to worker insecurity, and is reflective of the general process of globalization and economic polarization.

• Low-skilled work: Low-skill work outsourced to contractors who tend to employ migrant labor is causing a revival of radical trade union activity. In the UK, major hospitals, universities, ministries and corporations are being pressured.
• In-housing: In January 2020, Tim Orchard, the CEO of Imperial College Healthcare Trust stated that the in-housing of over 1,000 Sodexo cleaners, caterers and porters across five NHS hospitals in London "will create additional cost pressures next year but we are confident that there are also benefits to unlock, arising from better team working, more co-ordinated planning and improved quality."
• USA base: On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much and can no longer rely on consumer spending to drive demand.

Standpoint of government

Western governments may attempt to compensate workers affected by outsourcing through various forms of legislation. In Europe, the Acquired Rights Directive attempts to address the issue. The Directive is implemented differently in different nations. In the United States, the Trade Adjustment Assistance Act is meant to provide compensation for workers directly affected by international trade agreements. Whether or not these policies provide the security and fair compensation they promise is debatable.

Government response

In response to the recession, President Obama launched the SelectUSA program in 2011. In January 2012, President Obama Issued a Call to Action to Invest in America at the White House "Insourcing American Jobs" Forum. Obama met with representatives of Otis Elevator, Apple, DuPont, Master Lock, and others which had recently brought jobs back or made significant investments in the United States.

Policy-making strategy

A main feature of outsourcing influencing policy-making is the unpredictability it generates regarding the future of any particular sector or skill-group. The uncertainty of future conditions influences governance approaches to different aspects of long-term policies.

In particular, distinction is needed between

• cyclical unemployment – for which pump it up solutions have worked in the past, and
• structural unemployment – when "businesses and industries that employed them no longer exist, and their skills no longer have the value they once did."

Competitiveness

A governance that attempts adapting to the changing environment will facilitate growth and a stable transition to new economic structures until the economic structures become detrimental to the social, political and cultural structures.

Automation increases output and allows for reduced cost per item. When these changes are not well synronized, unemployment or underemployment is a likely result. When transportation costs remain unchanged, the negative effect may be permanent; jobs in protected sectors may no longer exist.

USA outsourcing's effect on Mexico, studies suggest, is that for every 10% increase in US wages, north Mexico cities along the border experienced wage rises of 2.5%, about 0.69% higher than in inner cities.

By contrast, higher rates of saving and investment in Asian countries, along with rising levels of education, studies suggest, fueled the ‘Asian miracle’ rather than improvements in productivity and industrial efficiency. There was also an increase in patenting and research and development expenditures.

Industrial policy

Outsourcing results from an internationalization of labor markets as more tasks become tradable. According to leading economist Greg Mankiw, the labour market functions under the same forces as the market of goods, with the underlying implication that the greater the number of tasks available to being moved, the better for efficiency under the gains from trade. With technological progress, more tasks can be offshored at different stages of the overall corporate process.

The tradeoffs are not always balanced, and a 2004 viewer of the situation said "the total number of jobs realized in the United States from insourcing is far less than those lost through outsourcing."

Environmental policy

Import competition has caused a de facto ‘race-to-the-bottom’ where countries lower environmental regulations to secure a competitive edge for their industries relative to other countries.

As Mexico competes with China over Canadian and American markets, its national Commission for Environmental Cooperation has not been active in enacting or enforcing regulations to prevent environmental damage from increasingly industrialized Export Processing Zones. Similarly, since the signing of NAFTA, heavy industries have increasingly moved to the US which has a comparative advantage due to its abundant presence of capital and well-developed technology. A further example of environmental de-regulation with the objective of protecting trade incentives have been the numerous exemptions to carbon taxes in European countries during the 1990s.

Although outsourcing can influence environmental de-regulatory trends, the added cost of preventing pollution does not majorly determine trade flows or industrialization.

Success stories

Companies such as ET Water Systems (now a Jain Irrigation Systems company), GE Appliances and Caterpillar found that with the increase of labor costs in Japan and China, the cost of shipping and custom fees, it cost only about 10% more to manufacture in America. Advances in technology and automation such as 3D printing technologies have made bringing manufacturing back to the United States, both cost effective and possible. Adidas, for example, plans producing highly customized shoes with 3D printers in the U.S.

Globalization and socio-economic implications

Main article: Globalization

Industrialization

Outsourcing has contributed to further levelling of global inequalities as it has led to general trends of industrialization in the Global South and deindustrialization in the Global North.

Not all manufacturing should return to the U.S. The rise of the middle class in China, India and other countries has created markets for the products made in those countries. Just as the U.S. has a "Made in U.S.A." program, other countries support products made in their countries as well. Localization, the process of manufacturing products for the local market, is an approach to keeping some manufacturing offshore and bringing some of it back. Besides the cost savings of manufacturing closer to the market, the lead time for adapting to changes in the market is faster.

The rise in industrial efficiency which characterized development in developed countries has occurred as a result of labor-saving technological improvements. Although these improvements do not directly reduce employment levels but rather increase output per unit of work, they can indirectly diminish the amount of labor required for fixed levels of output.

Growth and income

It has been suggested that "workers require more education and different skills, working with software rather than drill presses" rather than rely on limited growth labor requirements for non-tradable services.

By location

United States

Protection of some data involved in outsourcing, such as about patients (HIPAA) is one of the few federal protections.

"Outsourcing" is a continuing political issue in the United States, having been conflated with offshoring during the 2004 U.S. presidential election. The political debate centered on outsourcing's consequences for the domestic U.S. workforce. Democratic U.S. presidential candidate John Kerry called U.S. firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their "fair share" of U.S. taxes "Benedict Arnold corporations".

A Zogby International August 2004 poll found that 71% of American voters believed "outsourcing jobs overseas" hurt the economy while another 62% believed that the U.S. government should impose some legislative action against these companies, possibly in the form of increased taxes. President Obama promoted the 'Bring Jobs Home Act' to help reshore jobs by using tax cuts and credits for moving operations back to the USA. The same bill was reintroduced in the 113th United States Congress as the Bring Jobs Home Act (S. 2569; 113th Congress).

While labor advocates claim union busting as one possible cause of outsourcing, another claim is high corporate income tax rate in the U.S. relative to other OECD nations, and the practice of taxing revenues earned outside of U.S. jurisdiction, a very uncommon practice. Some counterclaim that the actual taxes paid by US corporations may be considerably lower than "official" rates due to the use of tax loopholes, tax havens, and "gaming the system".

Sarbanes-Oxley has also been cited as a factor.

See also: Disney litigation

Europe

Council Directive 77/187 of 14 February 1977 protects employees' rights in the event of transfers of undertakings, businesses or parts of businesses (as amended 29 June 1998, Directive 98/50/EC & 12 March 2001's Directive 2001/23). Rights acquired by employees with the former employer are to be safeguarded when they, together with the undertaking in which they are employed, are transferred to another employer, i.e., the contractor.

Case subsequent to the European Court of Justice's Christel Schmidt v. Spar- und Leihkasse der früheren Ämter Bordesholm, Kiel und Cronshagen, Case C-392/92 [1994] have disputed whether a particular contracting-out exercise constituted a transfer of an undertaking (see, for example, Ayse Süzen v. Zehnacker Gebäudereinigung GmbH Krankenhausservice, Case C-13/95 [1997]). In principle, employees may benefit from the protection offered by the directive.

Asia

Countries that have been the focus of outsourcing include India, Pakistan, and the Philippines for American and European companies, and China and Vietnam for Japanese companies.

The Asian IT service market is still in its infancy, but in 2008 industry think tank Nasscom-McKinsey predicted a $17 billion IT service industry in India alone.

A China-based company, Lenovo, outsourced/reshored manufacturing of some time-critical customized PCs to the U.S. since "If it made them in China they would spend six weeks on a ship."

Article 44 of Japan's Employment Security Act implicitly bans the domestic/foreign workers supplied by unauthorized companies regardless of their operating locations. The law will apply if at least one party of suppliers, clients, labors reside in Japan, and if the labors are the integral part of the chain of command by the client company, or the supplier.

• No person shall carry out a labor supply business or have workers supplied by a person who carries out a labor supply business work under his/her own directions or orders, except in cases provided for in the following Article.
  • A person who falls under any of the following items shall be punished by imprisonment with work for not more than one year or a fine of not more than one million yen. (Article 64)
• Unless permitted by act, no person shall obtain profit by intervening, as a business, in the employment of another.

Victims can lodge a criminal complaint against the CEO of the suppliers and clients. The CEO risks arrest, and the Japanese company may face a private settlement with financial package in the range between 20 and 100 million JPY (200,000 - million USD).

Nearshoring

When the New York Times headlined "Near Source of Supplies the Best Policy" their main focus was on "cost of production." Although transportation cost was addressed, they did not choose among:

• transporting supplies to place of production

• transporting finished goods to place(s) of sale
• cost and availability of labor

Nearshoring or Nearsourcing is having business processes, especially information technology processes such as application maintenance and development or testing, in a nearby country, often sharing a border with the target country. Commonalities usually include: geographic, temporal (time zone), cultural, social, linguistic, economic, political, or historical linkages. The term Nearshoring is a derivative of the business term offshoring. The hybrid term "nearshore outsourcing" is sometimes used as an alternative for nearshoring, since nearshore workers are not employees of the company for which the work is performed. It can also be a reversal, by contracting a development partner in a different country but in close proximity (same or nearby time zone), facilitating communication and allowing frequent visits. This is a business strategy to place some or all of its operations close to where its products are sold. Typically, this is contrasted with the trend to outsource low-wage manufacturing operations to developing nations (offshoring), and reflects a reversal of that trend. Sometime, the work is done by an outside contracted company rather than internally (insourcing), but unlike offshore outsourcing, the work is done in fairly close proximity to either the company headquarters or its target market.

In Europe, nearshore outsourcing relationships are between clients in larger European economies and various providers in smaller European nations. The attraction is lower-cost skilled labor forces, and a less stringent regulatory environment, but crucially they allow for more day to day physical oversight. These countries also have strong cultural ties to the major economic centers in Europe as they are part of EU. For example, as of 2020 Portugal is considered to be the most trending outsourcing destination as big companies like Mercedes, Google, Jaguar, Sky News, Natixis and BNP Paribas opening development centers in Lisbon and Porto, where labor costs are lower, talent comes from excellent Universities, there's availability of skills and the time zone is GMT (the same as London).

In the US, American clients nearshore to Canada and Mexico, as well as to many nations in Central and South America.

Reasons to nearshore

Culture

Cultural alignment with the business is often more readily achieved through near-sourcing due to there being similarities between the cultures in which the business is located and in which services are sub-contracted, including for example proficiency with the language used in that culture.

Communication

Constraints imposed by time zones can complicate communication; near-sourcing or nearshoring offers a solution. English language skills are the cornerstone of Nearshore and IT services. Collaboration by universities, industry, and government has slowly produced improvements. Proximity also facilitates in-person interaction regularly and/or when required.

Other Advantages

Software development nearshoring is mainly due to flexibility when it comes to upscale or downscale teams or availability of low cost skilled developers. The nearshoring of call centers, shared services centers, and Business Process Outsourcing (BPO) rose as offshore outsourcing was seen to be relatively less valuable. More recently, companies have explored nearshoring as a risk mitigation strategy for operational and supply chain weaknesses uncovered during the COVID-19 global pandemic crisis, when offshore BPOs experienced sudden closures and disruptive quarantine restrictions which hampered their ability to conduct day-to-day business operations.

The complexities of offshoring stem from language and cultural differences, travel distances, workday/time zone mismatches, and greater effort for needed for establishing trust and long-term relationships. Many nearshore providers attempted to circumvent communication and project management barriers by developing new ways to align organizations. As a result, concepts such as remote insourcing were created to give clients more control in managing their own projects. Nearshoring still hasn't overcome all barriers, but proximity allows more flexibility to align organizations.

Visa requirements

Main article: H-1B visa

The United States has a special visa, the H-1B, which enables American companies to temporarily (up to three years, or by extension, six) hire foreign workers to supplement their employees or replace those holding existing positions. In hearings on this matter, a United States senator called these "their outsourcing visa."

Examples

• In 2003 Procter & Gamble outsourced their facilities' management support, but it did not involve offshoring.
• Dell offshored to India in 2001 but reversed since "customers were not happy with the prior arrangement ..."

Print and mail outsourcing

Print and mail outsourcing is the outsourcing of document printing and distribution.

The Print Services & Distribution Association was formed in 1946, and its members provide services that today might involve the word outsource. Similarly, members of the Direct Mail Marketing Association were the "outsourcers" for advertising agencies and others doing mailings. DMMA celebrated their 100th anniversary in 2017.

The term "outsourcing" became very common in the print and mail business during the 1990s, and later expanded to be very broad and inclusive of most any process by 2000. Today, there are web based print to mail solutions for small to mid-size companies which allow the user to send one to thousands of documents into the mail stream, directly from a desktop or web interface.

Marketing outsourcing

The term outsource marketing has been used in Britain to mean the outsourcing of the marketing function. The motivation for this has been:

• cost reduction.
• specialized expertise.
• speed of execution
• short term staff augmentation

While much of this work is the "bread and butter" of specialized departments within advertising agencies, sometimes specialist are used, such as when The Guardian outsourced most of its marketing design in May 2010.

Business Process Outsourcing

Business Process Outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca-Cola that outsourced large segments of its supply chain.

BPO is typically categorized into back office and front office outsourcing.

BPO can be offshore outsourcing, near-shore outsourcing to a nearby country, or onshore outsource to the same country. Information Technology-enabled service (ITES-BPO), knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are some of the sub-segments of BPO.

Although BPO began as a cost-reducer, changes (specifically the move to more service-based rather than product-based contracts), companies now choose to outsource their back-office increasingly for time flexibility and direct quality control. Business process outsourcing enhances the flexibility of an organization in different ways:

BPO vendor charges are project-based or fee-for-service, using business models such as remote in-sourcing or similar software development and outsourcing models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.

BPO also permits focusing on a company's core competencies.

Supply chain management with effective use of supply chain partners and business process outsourcing can increase the speed of several business processes.

BPO caveats

Even various contractual compensation strategies may leave the company as having a new "single point of failure" (where even an after the fact payment is not enough to offset "complete failure of the customer's business"). Unclear contractual issues are not the only risks; there's also changing requirements and unforeseen charges, failure to meet service levels, and a dependence on the BPO which reduces flexibility. The latter is called lock-in; flexibility may be lost due to penalty clauses and other contract terms. Also, the selection criteria may seem vague and undifferentiated

Security risks can arise regarding both from physical communication and from a privacy perspective. Employee attitude may change, and the company risks losing independence.

Risks and threats of outsourcing must therefore be managed, to achieve any benefits. In order to manage outsourcing in a structured way, maximising positive outcome, minimising risks and avoiding any threats, a business continuity management (BCM) model is set up. BCM consists of a set of steps, to successfully identify, manage and control the business processes that are, or can be outsourced.

Analytical hierarchy process (AHP) is a framework of BPO focused on identifying potential outsourceable information systems.. Willcocks, M. Lacity and G. Fitzgerald identify several contracting problems companies face, ranging from unclear contract formatting, to a lack of understanding of technical IT processes.

Technological pressures

Industry analysts have identified robotic process automation (RPA) software and in particular the enhanced self-guided RPAAI based on artificial intelligence as a potential threat to the industry and speculate as to the likely long-term impact. In the short term, however, there is likely to be little impact as existing contracts run their course: it is only reasonable to expect demand for cost efficiency and innovation to result in transformative changes at the point of contract renewals. With the average length of a BPO contract being 5 years or more – and many contracts being longer – this hypothesis will take some time to play out.

On the other hand, an academic study by the London School of Economics was at pains to counter the so-called "myth" that RPA will bring back many jobs from offshore. One possible argument behind such an assertion is that new technology provides new opportunities for increased quality, reliability, scalability and cost control, thus enabling BPO providers to increasingly compete on an outcomes-based model rather than competing on cost alone. With the core offering potentially changing from a "lift and shift" approach based on fixed costs to a more qualitative, service based and outcomes-based model, there is perhaps a new opportunity to grow the BPO industry with a new offering.

Industry size

One estimate of the worldwide BPO market from the BPO Services Global Industry Almanac 2017, puts the size of the industry in 2016 at about US$140 billion.

India, China and the Philippines are major powerhouses in the industry. In 2017, in India, the BPO industry generated US$30 billion in revenue according to the national industry association. The BPO industry is a small segment of the total outsourcing industry in India. The BPO industry workforce in India is expected to shrink by 14% in 2021.

The BPO industry and IT services industry in combination are worth a total of US$154 billion in revenue in 2017. The BPO industry in the Philippines generated $26.7 billion in revenues in 2020, while around 700 thousand medium and high skill jobs would be created by 2022.

In 2015, official statistics put the size of the total outsourcing industry in China, including not only the BPO industry but also IT outsourcing services, at $130.9 billion.