Depending on what a European company decides to outsource to India, Essay

Depending on what a European company decides to outsource to India, the result may be very beneficial in several aspects even if it includes some disadvantages - Essay Example Measures that are set for companies that outsource to India and Indian venders ensure confidential data is stored on the servers of the outsourcing companies and Indian vendors have strongly controlled access. Although, the outsourcing may have adverse outcomes to the European company that decide to outsource to India, it may as well yield beneficial outcomes to this company. The economic crisis has made many European companies to decide the focus on India as an outsourcing objective for their information technology requirements (Schniederjans, 2005). Thus, these companies should ensure that the outsourcing contracts must be carefully drawn to protect their intellectual property rights. The European company outsourcing to India should not allow the team in India to know much about their business, but Indian should only understand the details of equity trading and settlement. However, the outsourcing will cause unemployment due to the introduction of information technology, but it is significant for European companies to outsource in India because they will have a competitive advantage in the global market. The competition will ensure that the profits decline in the long-run, and profits accrue to employees via more job creation, and to clients via cheaper prices. For instance, the research indicates that most European companies would gain new jobs in the long-run due to offshore information technology outsourcing to India (Schniederjans, 2005). Higher wages in India are one of the significant drivers of global outsourcing, and would cause the wage differential to narrow in the European companies. Meanwhile, the skill differentials and higher productivity as a result of outsourcing to India will tend to preserve Europe companies wage levels, with differentials decreasing gradually due to increase in the low end wages. The outsourcing is growing significantly in Europe due to labor