COMPLETELY OUTSOURCED !!!

Let's talk about why America is so-far so successful and well admired nation. Undoubtedly it has taught us how the open economy is, what is outsourcing and how to book profit with virtually no hard cash in your hand. This is a critic of the policies recently administered by the country who have outsourced almost everything proudly.

During cold war we have seen sharp discrimination between the policies of two arch rivals USSR and USA. America with moderately open policies and Russia with a close and so called self sufficient market. The rest is history. The aftermath was a sharp inclination of the US farms towards outsourcing jobs and work to achieve better maturity.

Why I have termed this "MATURITY"?

Big giants like HP and IBM scrapped many of their lovely products and started using more competitive products from their competitors and gradually they started calling them partners. This helped them creating an excellent synergy between the organizations minimizing the risk of competition and saving huge cost without compromising the quality. Even several automobile and manufacturing industries started to follow the same trend. They started to assemble rather than invent from the scratch. They have also found out a new way of improving product by simply re engineering or shuffling. An era of out sourcing started.

Last two decade was a maturity period for Banking, Financial systems and IT because we started to believe that the organizations have achieved a certain maturity worth following and they have optimized their operations.

So if we go back another thirty years we could see it started from a closed market and gradually it started showing more openness.

Recently Obama has coined many solutions which have raised the eye brows of many analysts.

One of them is the Tax reforms. The tax reforms (announced Tuesday) have only been proposed and there will be an extended debate on these before they can be implemented, as they require existing laws to be changed, according to software body Nasscom.

This would definitely help US to gain more cash is Govt .fund. The current law in the US states that 'any income that is earned outside the US is not taxed until such time it is brought back into the US.

But for the time being the companies and countries completely dependent on the outsourced work may have some kind of impact. Although there are different views as well.. 'The current proposal, as we understand, is to close corporate tax loopholes for US multinational corporations. We do not believe it has anything to do with IT outsourcing done by US corporations,' India's second-largest IT services provider, Infosys Technologies, said in a statement.

Whatever may be the case, behemoths like HP, Microsoft, Oracle, GM would be majorly impacted. Now we are talking about only American firms!

The answer is simple, they should ask those firms why have you outsourced 80-90 % of your work outside? It may sound great to create a closed supply chain in a country. You tend to keep everything within them. But the supply chain is not complete without the buyer and no doubt US goods have a huge market outside their country. The conservativeness may provoke the buyer countries to take hostile steps also.
Moreover we are talking about a model which we have scrapped 30-40 years back and now we are trying to place it back ???

Those policies may help US to revive their economy in the short term, but special care needs to be administered to see that those do not do any harm in the long run.