The correct option is 1 and 3 only.
Explanation
Outsourcing is a key outcome of the globalisation process. It refers to the practice where a company hires regular services from external sources, often from other countries, which were previously provided internally or from within the home country.
Statement-wise Analysis:
- Statement 1 is Correct: The fundamental definition of outsourcing involves contracting out activities to third-party providers. In the context of globalisation, this often involves "offshoring," where services such as voice-based business processes, record keeping, accountancy, banking services, and clinical advice are outsourced to countries where they can be performed more efficiently or cheaply.
- Statement 2 is Incorrect: The growth of outsourcing is primarily driven by technological advancements (especially in Information and Communication Technology) and cost arbitrage (lower costs of operation in developing nations). It is not primarily driven by the stagnation of the manufacturing sector in developed countries; rather, it is a strategic business decision to focus on core competencies and reduce costs across both manufacturing and service sectors.
- Statement 3 is Correct: India has emerged as a premier global destination for outsourcing (particularly in the BPO and IT sectors) primarily due to two factors: low wage rates relative to developed countries and the vast availability of skilled manpower (including English-speaking proficiency and technical expertise).
Key Takeaway:
Outsourcing is driven by the economic logic of comparative advantage, facilitated by modern communication technology, allowing firms to utilize lower-cost skilled labor in developing nations like India.