The manner in which a country's political, cultural, and legal structure is structured defines the opportunities and attractiveness of countries as potential business locations and markets, as we learned from the readings on political economy and trade theory. Global business is not only concerned with identifying new international markets for selling goods but also as locations for sourcing and developing international locations for service delivery and manufacturing.

India is a nation with relatively few natural resources, but it has a large population of well-educated and English speaking people. With half of the workforce population , India has a competitive advantage in manufacturing more labour-intensive goods and services. Given these tools, India concentrated on exporting services such as software engineering, telemarketing, credit and mortgage check applications, and accounting after shifting away from its failed experiment of becoming a planned economy.

More than 2.4 million US jobs have been transported offshore to countries like India following the 2008 recession. Although a large part of these jobs may be identified as "lower-skill" such as telemarketing and call centers, many firms do have offshore engineering, software development, and India accounting. The reason for offshoring such "higher-skill" jobs to India could be two-fold, on the one hand, cost savings, and on the other hand, skilled labor availability. Indian software engineers receive on average one tenth of their peers in the US. Around 65 per cent of all The jobs outsourced globally are in India. There are also huge numbers of accounting companies overseas, with the major four accounting firms hiring more than 20,000 staff in India. Tax planning will take place by an accountant in India, to be signed-off on, back in the US. Again, Indian tax preparers earn approximately a tenth of a comparable US worker's salary. Interestingly enough, there is no need to notify consumers that the planning is being performed overseas, so businesses can bill out at the American hourly rate.

One of the pro-offshoring points is that it makes U.S. companies become more profitable, and that offshoring is not a zero-sum game, in that the U.S. company also has to recruit employees to accommodate the increased productivity, i.e. it's not that one offshore job equals one job less for the U.S. workforce. The US firm will now add more high-paying workers, so the logic goes. It is also proposed that lower costs would mean lower rates for customers, which would boost the overall US economy. The Wall Street Journal's editorial page voices the claim on a daily basis.

Please think through and discuss the following questions:

1. What other incentives could there be for offshoring US companies, other than higher profits? If so, which ones? If not, why not?

2. What may be some of the legal and ethical issues that you think businesses face when choosing to go offshore?

3. What are the possible long-term implications of offshoring from the perspective our home country (the US in our case)?