Outsourcing: Impact of IT on India’s Intellectual Capacity

Abstract

This paper sheds light on various aspects of the impact of IT outsourcing from the US to developing countries like India and illustrates how the profits of outsourcing are not necessarily the only indicators of impact. Outsourcing has played a major role in shaping technology policy of many developing countries and has led to deceleration of other core engineering disciplines like electronics, mechanical engineering, civil engineering and environmental engineering. Furthermore, the benefits of outsourcing are mostly reaped only by the urban population while a vast majority of citizens especially those in rural areas continue to face inequality and poverty. By elaborating about the inefficient educational system and negligent policy making, the paper tries to explain through examples how IT outsourcing has put developing countries in a vulnerable spot and can have adverse consequences on the economy in the long run. The paper further attempts to reveal how IT is hindering the advancement of other crucial sectors like agriculture, manufacturing and healthcare. Towards the end, the paper provides a few policy recommendations.

Keywords: policy, information technology