The role of policy in balancing outsourcing and homeland security

Many US high-tech companies outsource software development overseas, particularly to countries known for their ability to develop sophisticated software. In particular, India, Pakistan, China, and Russia not only have strong technical capabilities but also a large and technically sophisticated labor force. Excess labor supply, coupled with a high-quality work product, has attracted overseas investment, particularly among US firms eager to develop and deliver cutting-edge products at lower cost. Outsourcing has not been confined to high-tech software development; it extends to application service provisioning, in which a supplier owns and remotely manages an organization's business applications. However, corporations must balance the benefits of outsourcing high-tech software development and application service provisioning against the costs, especially with regard to homeland security.