Concerns of Offshoring

With the offshoring of call-center type applications, debate has also surfaced that this practice does serious damage to the quality of customer service and technical support that customers receive from companies who do it. Call centers have sprung up in South Africa, India, Canada and the Caribbean. Many US companies have caught much public ire in the US for their decisions to use Indian labor for customer service and technical support, mostly because of the apparent language barrier that it creates. While India, for example, has a high level of younger skilled workers who are capable of speaking English as one of their native languages, their English skills have caused debate in North America.]Criticisms of outsourcing from much of the American public have been a response to what they view as very poor customer service and technical support being provided by overseas workers attempting to communicate with Americans.

Some claim that companies lose control and visibility across their extended supply chain under outsourcing, creating increased risks. A 1995 quantitative survey of 121 electronics industry participants by Industry Directions Inc and the Electronics Supply Chain Association (ESCA) found that 69% of respondents said they had less control over at least 5 of their key supply chain processes since the outsourced model took hold, while 66% of providers felt their aggregate risk with customers was high or very high. 36% of providers responded that they felt an increased risk of uncertainty compared to their uncertainty risk prior to the rise to prominence of the outsourced model. 62% of respondents described as "problematic" at least two core trading partner management practices, which included performance management and simple agreement on results. 40% of all respondents encountered resistance to sharing risk in outsourced partnership agreements, according to the research.

The transfer of knowledge outside a country may create competitors to the original companies themselves. Chinese manufacturers are already selling their goods directly to their overseas customers, without going through their previous domestic intermediaries that originally contracted their services. In the 1990s and 2000s, American automakers increasingly turned to China to create parts for their vehicles. By 1996, China leveraged this know-how and announced that they will begin competition with American automakers in their home market by selling fully Chinese automobiles directly to Americans. When a company moves the production of goods and services to another country, the investment that companies would otherwise make in the domestic market is transferred to the foreign market. Corporate money spent on factories, training, and taxes, which would otherwise be spent in the market of the company is then spent in the foreign market.

Offshoring proponents often say it is necessary to move jobs overseas due to a looming shortage of qualified workers in the domestic market and the booming number of qualified candidates in foreign markets, particularly in China and India. A study by Duke University found that 222,335 engineers graduate annually from American universities, far more than the 70,000 often quoted in the media. Furthermore, the Duke study highlights the conflicting numbers coming out of China, India, and the US. China and India, in their official numbers cited by the media, both count the graduates from three year training programs and diploma holders, equivalent to Associates degrees in the US. The media then compares the China and India numbers to US numbers of four-year Baccalaureate programs. Duke University estimates the total number of engineers with Bachelor's degrees produced annually for the three countries to be 351,537 for China, 112,000 for India, and 137,436 for the US. These figures make the US the per capita leader in producing technology specialists.