uncorrected proof Chapter 3 Economic and Business Effects of IT Offshoring Wolfgang Messner, Stephan Weinert Abstract The effects of IT offshoring are contentious. Policy makers, business ex- ecutives, and academics express strong and often conflictingviews. This paper aims to offer decision makers and business shapers a better understandingof the rationale and economics of offshoring, as well as its effects. Offshoring has important impli- cations for companies and service providers. However, offshoring also to various degrees affects the wealth of Western countries and their workforce.As a receiving economy, India can realize significant benefits through direct foreign investment. 3.1 Putting the effects of offshoring into perspective The ability to offshore IT depends on a pool of well educated and trained em- ployees in an offshore location, a sizeable gap between their income expectations Fig. 3.1 Perspectives of offshoring effects DOI 10.1007/978-3-540-77288-0 Date: 17-Dec-2007 Proof-Number:2 31