Argument: Offshoring exploits both individual workers and under developed states.

Investment in offshore outsourcing can easily develop into a form of economic and cultural imperialism. Offshoring encourages first-world governments and businesses to perceive underdeveloped countries as little more than cheap sources of labour and support for developed economies. The discourse that outsourcing creates does not focus on development strategies or the strengthening of weak economies, but on exploitation of the flaws and gaps inherent in the labour markets of developing nations [i] .

Moreover, wide-scale exporting of roles dependent on specific forms of linguistic and cultural knowledge forces workers to adopt alien and over-simplified cultural practises – directly echoing the relationships between colonial-era employers and native service providers.

[i] “The new masters of management.” The Economist, 15 April 2010. http://www.economist.com/node/15894358

Candidate 1: "Greater risk will simply oblige companies to be more diligent in screening and selecting the outsourcing firms that they choose to do business with.

While examples such as the construction of the Boeing Dreamliner serve to demonstrate how outsourcing can go wrong, they do not undermine the value of the idea itself. Indeed, an increased emphasis on closely supervised and responsible outsourcing will only serve to bolster the business of firms offering legal and auditing services (some of which are off-shore operations themselves)– and a slight increase in transaction costs is not likely to deter the majority of companies who have already observed the benefits of outsourcing reflected in their annual accounts.

It should also be pointed out that all sensibly run businesses should attempt to guard against the risks inherent in adopting new practices or forming new relationships by taking out insurance. Many insurers and underwriters are gearing up to assess and cover the costs of a collapse in the relationship between a businesses and an outsourcing partner.

If the worst happens and a company is forced to pull out of an offshoring agreement, it will be able to use the money that it receives from its insurer to bring troubled back-office operations or subcontracted tasks back in-house.

Increased competition within the outsourcing market, from both offshore and domestic businesses, will have the effect of forcing outsourcing firms to increase the quality and reliability of their services above the standard offered by their rivals [i] . Competition is likely to result in a net improvement of the standard or service available throughout the outsourcing industry.

[i] Drezner, W D. 26 July 2007. http://www.danieldrezner.com/archives/003414.html"
Candidate 2: "Offshore outsourcing accelerates the development of poorer states’ infrastructure.

Offshoring spurs the development of poorer states. Offshoring relies on the existence of a basic industrial base and certain essential forms of state infrastructure, including an education system. These facilities are likely to be partially or wholly absent in a developing economy. The readily available capital that is located in the developed world, along with the example provided by other developing states that have successfully engaged in offshoring projects incentivises investment in service infrastructure and high quality education.

Many contemporary development strategies focus on developing a state’s industrial and agricultural sectors before its service economy. Expansion of developing states agricultural sectors is already proving to be a politically contentious issue, thanks to the generous and entrenched subsidies that farmers in the developed world are provided with. Resource extraction from developing states is not possible without ceding control of land and hiring of employees to wealthy supermajor oil firms, which exercise an effective monopoly over skilled geologists, miners, scientists and oil drilling experts. Under these circumstances, a conservative approach to development is likely to take an extremely long time to substantially improve economic prosperity and living standards within a poor state. However, an immediate focus on the service sector may allow a state to “leap frog” these developmental stages [i] .

Offshoring provides businesses within a developing state with access to foreign markets far larger than those in their native economy may contain. This will allow offshoring businesses to take advantage of economies of scale and capital inflow in order to develop with greater speed.

A state’s political culture will also stand to benefit from increased outsourcing. Offshore businesses will demand increasingly accountable, predictable and non-arbitrary forms of national governance. A level of reliability and foreseeability is essential in any system of civil law; so is a restrained, stable government that is prevented from using its power to expropriate private assets or spend tax revenue capriciously.

[i] “Strengthening India’s offshoring industry.” McKinsey Quaterly, August 2009. http://www.mckinseyquarterly.com/Strengthening_Indias_offshoring_industry_2372"
Candidate 3: "Offshore outsourcing accelerates the development of poorer states citizens.

Offshore outsourcing incentivises wider engagement with education in developing states, for longer periods of time. While- even more so than in the wealthy world- education is seen by citizens of developing nations as offering a path out of poverty or subsistence-level economic activity, worries about property rights, the breakdown of families and communities and the acquisition of essential skills may lead to schooling becoming a lower priority for older children and young adults. The connection between education, skills acquisition and improvements in income and living standards are not immediate. There is little impetus for workers and parents to pay for forms of education that are not directly linked to the sorts of economic activity that are predominant in their communities. In developing states that lack a growing service sector, the value of a qualification in science, accounting or computing cannot be immediately realised. This situation may prevent social mobility in one of two ways.

Firstly, a child who is only educated to a certain standard, or who is encouraged to gain knowledge that is relevant only to a certain field, may be unable to adapt to changes in his economic circumstances later in life. A worker with training in computing will be able to compete for a much wider range of jobs than someone who only has a basic education that only focused on literacy.

Secondly, although it may be possible to educate a teenager on the finer points of irrigation engineering or vehicle maintenance, the utility of those skills will still be limited by environmental factors. A teenager trained to construct a modern irrigation system will still find that his father’s farm fails when it is caught up in a drought or crop blight. By linking education to “traditional” economic activities, families are unable to take advantage of alternative sources of trade or income.

Where a state fosters a healthy service economy, and offers additional benefits to foreign firms who employ its businesses as outsourcing partners, demand for highly educated workers will increase."
Candidate 4: "Side opposition have created an argument for increasing the quality and affordability of education within developing states. Thanks to Trade Union’s intensive involvement in the decisions taken by large western businesses, companies that engage in offshoring are often compelled to invest a portion of the savings that they make from offshoring their operations into retraining schemes for staff at risk of redundancy. In 2005, the large IT services company CSC reached an agreement with the Union Amicus that required it to share a portion of the savings that it made through expanding its use of outsourcing with its staff [i] . Rather than declaring any redundancies, CSC gave its staff the opportunity to retrain by devoting almost £5000 for each of its English employees to education and development schemes.

It is conceded that the offshoring relationships formed between America and India and China during the nineteen nineties formed the basis of the industrial booms that both of those states are currently experiencing. An influx of expertise and increases in education and living standards funded by companies specialising in offshore have enabled both Indian and China to reduce their dependence on US manufacturers in many areas of their economy. However, the transition of manufacturing-led industries into developing economies is only one aspect of the offshoring narrative.

Increases in living standards within the developed nations of Europe and north America will only be sustainable if the individuals benefitting from higher wages and access to global markets for goods and services are able to maintain access to these advantages independently of the state’s intervention and changes in industrial practices. This goal is only possible if levels of education within a state are increased. Although side proposition believe that the increased burden on state support services that offshoring may cause is intractable, investment in education can limit the impact of such negative trends to only a single generation.

The affluence of many developed states is also reflected in intense entrepreneurial activity within their economies. In states such as Germany the proliferation in highly specialised small and medium sized businesses- that are unable to afford the services of offshoring businesses- has sustained demand for skilled and semi-skilled jobs. Many of these firms are sustained by larger businesses seeking outsourcing opportunities that are unwilling to engage in offshore outsourcing.

The size and relatively low individual incomes of German-style mittelstand enterprises prevents them from taking advantage of offshore outsourcing, often seen as (proportionately) too expensive and too risky [ii] by mittelstand executives. Such companies also help to sustain employment within economies that place a high premium on specialised technical and professional knowledge, but neglect equally complex and specialised vocational and craft skills.

[i] “CSC to retain staff with offshoring cash.” 09 August 2005. http://www.guardian.co.uk/business/2005/aug/09/7?INTCMP=SRCH

[ii] “Big is back.” The Economist, 27 August 2009. http://www.economist.com/node/14303582"
Candidate 5: "It must be remembered that the offshore manufacturing and service sectors are relatively young. Workers have not yet had the opportunity to develop coherent collective bargaining strategies. It takes time for those involved in an industry to learn how to act as advocates for their own and their colleagues’ interests. Once these skills have become commonplace throughout the offshoring industry, workers will be better equipped to form unions and to hold their own governments to account over the lacunae and lax policy making identified by side opposition.

Side opposition have adopted a somewhat orientalist line of argument by suggesting that developing economies are inherently weak and easy to subvert. In jurisdictions such as India quite the opposition is true; governments eager to control the effect of globalisation on domestic markets have adopted policies that inhibit the involvement of foreign firms in their economies. Businesses and politicians- both local and foreign- expend a great deal of political capital in order to make developing states accessible to the offshoring industry – often on terms that require workers’ welfare to be strictly monitored."
Candidate 6: "Offshore outsourcing is consistent with existing labour distribution patterns.

Offshore outsourcing lowers the cost of goods and services. There is no real need for all of the goods and services that are consumed within a highly developed economy to be produced in that economy. The sale price of a particular form of good or service is determined by a wide range of factors, including the pay demands made by the workers assembling the good or providing the service. Seeking out a labour force willing to accept lower wages and work longer hours enables a business to reduce the price and increase the overall supply of the products it offers [i] .

As more expensive and elaborate goods become available to more people- due to reductions in price- living standards throughout an economy will rise. Concurrently, increased demand for goods produced abroad will lead to increased business for offshore firms that take on outsourced work, leading to more money flowing into developing economies. Standards of living will also increases in these economies – albeit at a lower rate than in the import economy.

Offshore outsourcing does nothing more than reflect labour distribution patterns that already exist in domestic economies [ii] . Different types of activity will be carried out in centralised urban areas- where land and operating costs may be higher- than in the countryside or peripheral, industrialised districts. Certain regions of a state, by dint of geography or earlier investment decisions, may produce a concentration of certain type of worker, service or skillset. Competition within these areas will drive labour costs down – but a downward trend in service and production costs will usually lead to an upward trend in demand. This interrelationship has successfully fostered developed within all of the worlds’ largest economies, without creating unmanageable regional inequalities and without undermining workers’ rights.

Greater social mobility and education attainment within developed economies reduces the availability of the types of skilled and semi-skilled manufacturing-oriented labour that drove first-world economies during the twentieth century. First world nations now compete in knowledge-led economies, seeking to provide research new technologies and provide novel services to consumers in other highly developed nations. The residual power of collective bargaining mechanisms such as unions, coupled with expectations of high pay and highly refined working conditions mean the relative competitiveness of first-world manufacturing industries has dropped. Even if a state were to give preferential treatment to domestic manufacturers and low-level service providers, it would still run the risk of being out-competed by its counterparts in the developing world.

Better standards of education, growing personal wealth and the frequent use of credit to purchase assets have created a collective action problem in first world states that practice off shoring. While, in the long-term, the number of highly skilled workers within domestic economies will grow, in the short term, a significant number of older manual and clerical workers may become unemployable as a result of more intense overseas competition. However, side proposition argues that this constitutes a marginal and bearable cost in term of the wider benefits to quality of life that outsourcing achieves.

Further, the potential costs of assisting excluded domestic workers to re-enter the job market will be covered by increased taxation and excise revenues resulting from more frequent trade with offshore outsourcing firms.

[i] “Idea. Offshoring.” The Economist, 28 October 2009. http://www.economist.com/node/14301171

[ii] “The once great offshoring debate.” Real Clear Politics, 16 May 2007. http://www.realclearpolitics.com/articles/2007/05/the_once_great_offshoring_deba.html"

It must be remembered that the offshore manufacturing and service sectors are relatively young. Workers have not yet had the opportunity to develop coherent collective bargaining strategies. It takes time for those involved in an industry to learn how to act as advocates for their own and their colleagues’ interests. Once these skills have become commonplace throughout the offshoring industry, workers will be better equipped to form unions and to hold their own governments to account over the lacunae and lax policy making identified by side opposition.

Side opposition have adopted a somewhat orientalist line of argument by suggesting that developing economies are inherently weak and easy to subvert. In jurisdictions such as India quite the opposition is true; governments eager to control the effect of globalisation on domestic markets have adopted policies that inhibit the involvement of foreign firms in their economies. Businesses and politicians- both local and foreign- expend a great deal of political capital in order to make developing states accessible to the offshoring industry – often on terms that require workers’ welfare to be strictly monitored.
