Read the passage and answer the questions:
The highest level of decision makers or policymakers perform quinary activities. These are subtly different from the knowledge-based industries that the quaternary sector in general deals with. Quinary activities are services that focus on the creation, re-arrangement and interpretation of new and existing ideas; data interpretation and the use and evaluation of new technologies. Often referred to as ‘gold collar’ professions, they represent another subdivision of the tertiary sector representing special and highly paid skills of senior business executives, government officials, research scientists, financial and legal consultants, etc. Their importance in the structure of advanced economies far outweighs their numbers. Outsourcing has resulted in the opening up of a large number of call centers in India, China, Eastern Europe, Israel, the Philippines and Costa Rica. It has created new jobs in these countries. Outsourcing is coming to those countries where cheap and skilled workers are available. These are also out migrating countries. With the work available through outsourcing, the migration in these countries may come down. Outsourcing countries are facing resistance from job-seeking youths in their respective countries. The comparative advantage is the main reason for continuing outsourcing. New trends in quinary services include knowledge processing outsourcing (KPO) and ‘home shoring’, the latter as an alternative to outsourcing. The KPO industry is distinct from Business Process Outsourcing (BPO) as it involves highly skilled workers. It is information-driven knowledge outsourcing. KPO enables companies to create additional business opportunities. Examples of KPOs include research and development (R and D) activities, e-learning, business research, intellectual property (IP) research, legal profession and the banking sector.
What is the main reason for continuation of outsourcing?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Comparative advantage
Option (1) Balance of trade — Incorrect. It is the record of the goods and services a country imports and exports; it gives a company no reason to send its work abroad.
Option (2) Comparative advantage — Correct. Outsourcing goes to countries where cheap and skilled workers are available. The same work costs a company less there than at home, so it gains by getting the work done abroad, and while that advantage lasts the work keeps going out. The passage sums it up: the comparative advantage is the main reason for continuing outsourcing.
Option (3) Comparative creativity — Incorrect. The phrase twists comparative advantage: work moves abroad for lower cost, not for greater creativity.
Option (4) Out-migration — Incorrect. Out-migration is a result in the receiving countries, not the cause, and outsourced work there may bring migration down.
Note: A similar question was also asked in CUET (UG) 2026 on 21-05-2026 (Slot 2).
NCERT (2025-26): “Quinary Activities … Outsourcing has resulted in the opening up of a large number of call centres in India, China, Eastern Europe, Israel, Philippines and Costa Rica. It has created new jobs in these countries. Outsourcing is coming to those countries where cheap and skilled workers are available. These are also out-migrating countries. With the work available though outsourcing, the migration in these countries may come down. Outsourcing countries are facing resistance from job-seeking youths in their respective countries. The comparative advantage is the main reason for continuing outsourcing.… Balance of Trade Balance of trade records the volume of goods and services imported as well as exported by a country to other countries. If the value of imports is more than the value of a country’s exports, the country has negative or unfavourable balance of trade.…” |