What is it?

Outsourcing is a cost cutting measure in which a company hires an outside party to fulfill their requirements and create goods. This would traditionally be done by the company's

It was a business strategy introduced in 1989 and further became an integral part of business economics throughout the 1990's

Cons:

• Caused the loss of domestic jobs, particularly in the manufacturing sector.

Pros:

• Creates an incentive for businesses and companies to allocate resources where most effective

• Helps maintain the nature of free market economies on a global scale.

What are the implications for "traditional" developers?

Outsourcing leaves traditional developers out of jobs as the competitive nature of the market allows for companies to hire overseas developers at a cheaper rate. Thus, traditional developers are forced to either lower their prices or be out of jobs. However, companies still employ domestic developers as they want to ensure that their software is functional, and to allow the company to communicate directly to the developer (face-to-face).

Other area of programming, such as data science, however, are minimally affected by outsourcing. This is because data science requires a broad understanding of the scientific method and mathematical concepts that generally require some form of higher education knowledge which cannot be easily attained by outsourced developers from third-world countries.

What has changed from traditional development?

Compared to traditional development, such as hiring an expert team work together, outsourcing pushes the work offshore to be done by other people and for a cheaper price. The low cost comes from a lesser cost of living in other countries, resulting in less hourly pay. However, by having a team in another country, businesses create communication issues because of time zones, bandwidth etc.

Outsourcing results in the lack of jobs for 'traditional' developers, as it is more cheaper to hire other developers from other countries to do the job. Since it is cheaper to outsource, it causes the traditional developers to run out of jobs, as they are no longer required for their position. As outsourcing to other countries may run a big profit for the company itself, it also disrupts the economy as the money does not cycle around its own country. In 2017, there has been about $80.8b worth of IT services, outsourced to India.