Outsourcing to create savings of US$ 390 billion by 2009!

Nasscom has released a report which says that contrary to popular perception, outsourcing actually saves jobs and helps the US economy. According to their statistics, US firms have saved from $6-8 billion in the last four years due to outsourcing to India. This isn't as weird as it sounds - outsourcing helps companies reduce their business process costs which leads to greater profits to the company. While specific jobs related to the business process may be lost, the economy grows as a whole, and this creates more jobs within the economy.
The point missed by many people is that it is possible to provide software related services in countries such as India at a fraction of what it would cost in the US. If American companies were not to take advantage of it, they would simply lose business to Asian firms, which would lead to erosion of share value, job cuts and a possible downturn in the American economy. Outsourcing helps these firms stay competitive, and the resulting increase in profits lead to growth of the economy. To put it simply, increase in profits have to be invested by these firms at some point of time(not every company hoards cash like Microsoft, and even MS is trying to reduce it's $43 billion cash hoard), and these investments help create new jobs. In net terms, outsourcing has actually increased jobs by more than 125,000 according to the Nasscom study.