Read the passage and answer the questions:
Outsourcing
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 destination 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/home 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 continuity of outsourcing?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Comparative advantage
Option (1) Lack of will power to migrate — Incorrect. Outsourcing follows lower costs, not the workers’ wish to stay at home.
Option (2) Rise in out-migration from destination countries — Incorrect. The passage says the opposite: outsourced work may bring migration down in these countries.
Option (3) 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 (4) High speed and efficient transport — Incorrect. Call-centre and other outsourced work travels over communication networks, not by transport.
Note: A similar question was also asked in CUET (UG) 2026 on 14-05-2026 (Slot 1).
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.…” |