Inside Outsourcing

Outsourcing is becoming a necessity on the march toward a single global economy.

Remarkable technological advances – such as video conferencing, smartphones and social media – are commonplace today, but they were unimaginable even at the turn of the 21st century. As the technology juggernaut continues to roll, trade borders are evaporating. People now work, shop, date, socialize and recruit online. Thus, physical office spaces matter less since many employees can work from any place where they have with a computer and an internet connection. The COVID-19 pandemic accelerated the trend toward remote employment, which makes it less necessary for many workers to anchor in a specific location.

The convergence of three trends – globalization, remote work and advancements in technology – suggests that the labor market will transition from local job markets to a single global workforce by 2040. Easy access to a universal labor pool enables employers to hire, say, a qualified accountant in the Philippines for a fraction of the cost of hiring someone who lives in New York.

Though almost every Fortune 500 company outsources to some extent, the ...