Outsourcing is the delegation of operational tasks a small business owner either doesn't have time to do, or lacks the staff to properly perform, to a third party service provider specializing in that operation.
Optimistically-minded entrepreneurs see Outsourcing as a means to turn around dying businesses they purchase from more traditional business owners whose outdated management views won't allow them to compete.
Sales representative outsourcing is a great way to keep your own, small sales team busy with face-to-face current and potential customers while leaving the dirty work (cold calling) to a sales team at another location.
Be careful when searching for a business - there are some that take the "World is Flat" strategy and use the cheap labor and resources available through outsourcing, which is generally a less effective strategy.
My purpose is to explain the net effect of free trade, technological advance, and outsourcing on the overall economic system of the planet.
We have established that outsourcing, free trade, and technological advance all have the same effect on the system: They lower prices and increase net wealth.
If we obtained this ten-thousand-fold increase simply by allowing specialization and dividing work up among people, then what astronomical gains will we achieve by outsourcing that work to robots capable of working with unimaginable precision at unimaginable speed?
But in spite of the relative economic displacement they all cause, free trade, outsourcing, and technological displacement all have a positive net effect on the economics of the planet.
Technological advances that displace human workers are similar in effect to two other concepts with which we are very familiar in the modern age: outsourcing and free trade.
Outsourcing a job to get it done more cheaply or building a machine to do it more cheaply is really the same.