David Pisano and Willy Shih, professors of Harvard Business School, indicate that “moving up the value chain” with offshoring can irreversibly damage a company’s even a country’s competitiveness and ability to innovate. As IT service providers are touting the benefits of outsourcing increasingly higher-value and more complex IT work to lower-cost locales and IT customers, who are still hyper-focused on cost cutting in today’s economic doldrums, are more than willing to consider the pitch. Professor Willy Siih said that offshoring can lead to damage to a set of capabilities embodied in your supplier network, your workforce, the educational infrastructrue associated with a technology area.

Source: http://www.pcworld.com/businesscenter/article/236389/

it_outsourcing_how_offshoring_can_kill_innovation.html