Why I do not agree with most anti-outsourcing advocates and lobbists

In the west its common for politicians or some industries to raise anti-outsourcing bogey citing loss of jobs, increasing unemployment and ofcourse the cyclic election season. And suddenly India and China are demonised for software and hardware manufacturing outsourcing. what is forgotten is that it is a competitive requirement and social duty to make value affordable for one and all. 

Let us first examine at a macro level what causes companies to outsource. IMO, the following factors are key:

1. Costs - Input costs impact the ability of an Organisation to undertake new development initiatives. The median cost of living in developed countries & therefore the median wages are much higher in developed countries than the developing and poor countries, making them an excellent target for outsourcing. Ideally one would target a country where wage & infrastructure costs are low and the rate of wage inflation & infrastructure cost inflation is also low, to be successful long-term.
2. Availability of talent pool willing to do the outsourced work - The amount of talent available in any location (for the sweat shops) is  also key to run a  big operation. Developed countries with their sophisticated edication levels, focus on innovation and less population present a bleak prospect for for setting and scaling up sweat shops.
3. Lack of skill or experience in particular area
4. Lack of willingness to invest and do a particular work inhouse - A common issue for software coding, manufacturing of goods and providing back-end services. The relatively better educated manpower in the developed countries do not find this an enticing option career wise and financially rewarding
5. Ability to carry out co-ordination and communication in a commonly spoken knowledge - English language proficiency is a big skill advantage for Indian engineers working in software industry.
6. Regulatory pressure on foreign players to localise development, customisation, manufacturing & support for access and preferential allotment of contracts in the local market. A big policy making hurdle in large government contracts and large markets heavily influenced by government policies. Also extra duties on CBU imports compared to locally assembled (CKD imports) or locally manufactured items. If western companies raise the anti-outsourcing bogey, it is easy for big markets like India/China to deny them access to local markets in developing world indirectly or directly. And fortunately (or unfortunately for anti-outsourcing lobbyists) India and China are fast developing and the biggest markets in most business segments for finished products.

These are the first things people raising the anti-outsourcing bogey should think about, rather than a overbrearing sense of false nationalism or proving a wrong solution to genuine problems (unemployment). Politicians are usually the leaders in commiting these crimes for the sake of votes. You have to look at WIN-WIN outcomes.

As a consumer, if I can get an X product at Y cost, I would never look at a similar Y product with same functionalities and user experinces but at 2Y+ cost. I hardly care if Country X (US) makes it or Country Y (China). You have to be cost competitive. At the same time if a corporate cannot scale up its manufacturing and development operations, it cannot hope to be a market leader (successful) as it is late everywhere. Its not a nimble cheetah but a sluggish elephant. Speed is everything in today's times as only the first and second movers stand to profit in a particular business segment.