Outsourcing: A Passage Out of India

For years there was pretty much one choice for U.S. companies seeking to move jobs offshore: India. Outsourcing grew to a $69 billion business there and transformed backwaters such as Chennai and Hyderabad into teeming cities. That wave has crested. In 2011 companies in Latin America and eastern Europe opened 54 new outsourcing facilities, vs. 49 for India, according to industry tracker Everest Group.

The two regions are challenging the subcontinent’s dominance in outsourcing as American corporations increasingly ship higher-level jobs offshore. India had substantial advantages in offshoring’s first phase: plenty of English speakers to staff call centers and enough tech talent to run remote data-processing and computer support centers—all at about a 60 percent discount to stateside workers. But having wrung substantial costs out of back-office functions, U.S. companies are exporting skilled white-collar jobs in research, accounting, procurement, and financial analysis.