Outsourcing has contributed to further levelling of global inequalities as it has led to general trends of industrialization in the Global South and deindustrialization in the Global North.
Even though outsourcing has promoted a movement of industrial sites from the Global North to Global South regions, it has not been the only reason for the concurrent deindustrialization and industrialization of the North and South respectively. Deindustrialization in more economically and technologically developed regions has also been affected by increased industrial productivity.[38]
The rise in industrial efficiency which characterized development in developed countries has occurred as a result of labour-saving technological improvements. Although these improvements do not directly reduce employment levels but rather increase output per unit of work, they can indirectly diminish the amount of labour required for fixed levels of output.[39] Likewise, a trending shift in demand towards non-tradable services such as those in the health-care or government sectors has further accelerated deindustrialization in the Global North. Since these tasks cannot be outsourced, the demand for them needs to be met domestically abiding by the local market price. Consequently, a shift in the labour force towards fulfilling these profitable services has mostly taken place at the expense of industry since the agricultural sector in the early industrializing Global North had already been maximizing its labour capacity.[38]
Despite the variety of domestic and international factors affecting deindustrialization in the Global North, those concerning the external influence of the global market have been the most influential ones since 1994.[40]
The recent industrialization process outsourcing has encouraged in the Global South has taken place at a much faster pace than it did during its beginnings in the North, given that the well-developed technology was already developed, and merely spread to further regions.[38]
Growth and income[edit]
Urbanization[edit]
Trade[edit]
Migration[edit]
Domestic inequality[edit]
The almost simultaneous industrialization of the developing Global South and deindustrialization of the more developed Global North resulted in an international convergence of incomes.
Outsourcing has been characterized by rapid rates of growth and industrialization in the Global South. Conversely, the Global North has experienced a moderate slowdown in growth. Patterns of global industrialization and deindustrialization are explained by a combination of models in economic geography and economic growth. Models in economic geography illustrate that decreasing communication costs reduce the spatial clustering of industrial development. The lower cost to the spread of ideas improved coordination and communication within corporations across greater geographic distances. This process originated roughly after the international chaos of the World Wars, as a consequence of advancements in information technology during the 1960s. Further adaptations to technological progress, particularly the spread of the internet and liberalization of the telecommunications industry, permitted an acceleration of the movement of ideas and consequently of outsourcing since about the 1980s.[38]
The pace of urbanization in the Global North decreased considerably relative to its high levels following the Industrial Revolution. Rates of urban growth have been higher in the Global South.[41]
Outsourcing emerged with a new wave of globalization marked by high volumes of trade and capital flows. The increased movement of capital and goods contrasted starkly with the barriers and protectionism prevalent throughout the World Wars and the Great Depression during the Interwar Years.[38]
The level of migration has remained relatively low, particularly compared to the mass migratory trends which characterized the Industrial Revolution roughly between 1850 and 1914.,[38] probably because labor markets are not free now. Countries now have discrimination labor laws, only allow people with citizenship cards live and work free in their territories, even getting a citizenship card is difficult for some one not born in their territory. Free labor markets, discrimination based with a person skills would help reduce outsourcing problems, letting people freely follow their jobs in other countries.[42]
Outsourcing in the Global North led to a rising divergence in domestic employment levels in different tasks within a given industry, making tackling unemployment more difficult for governments as job losses ceased to be primarily sectoral.[38]
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