This year has seen a large decrease in outsourcing, as companies like General Motors and Apple move some of their operations in house and back to the US. Thee are several reasons for this, one of them being that costs in some of the major venues for outsourcing, like India, have been increasing such that some activities are not as economical for outsourcing as they were a few years ago.
Adam Smith predicted this in 1776, in his classical economic study, The Wealth of Nations. In that tome, he described in great detail how companies would take their production activities to the place where labour is cheapest.and that over time those wages would rise until some sort of equilibrium is reached and and then they would seek out other venues for their activities.This is happening with outsourcing now, and we will see further change over the next year. However, there is no way that outsourcing will end, as there will always be opportunities for it with different products and services. Check out this view on the subject.
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