Offshore outsourcing, also known as offshoring, of information technology (IT) means moving or relocating computer related business functions to a location outside the country. Improvements in technology, lower labor cost, and rise in skill levels in developing countries such as India have contributed to the shift of IT positions from the United States to developing countries. Consulting and research firms, such as Forrester Research and Mckinsey & Company, predicted various job losses in the United States and other Western European nations because of offshoring. Current findings on this topic are controversial. Some studies argued the benefits of offshoring and others presented a gloomy picture. In this dissertation, a quantitative correlational method is used to understand the impact of offshoring of IT positions on technological innovations as well as on quality of life in the United States. The research design included collecting data from various sources including the United States Government web sites, NASSCOM (National Association of Software & Service Companies) in India, and a survey instrument. The research findings indicate the statistically significant relationship between offshoring of IT positions and innovation. On the other hand, the study showed weak relationship between number of IT positions offshored and quality of life. The key recommendation of this study is that further investigations are needed to explore the impact of offshoring of other business functions including accounting, human resources, and medicine.
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