Why is the United States more likely to offshore skilled service activities rather than unskilled manufacturing activities to India?

Question

Quizplus · Accepted Answer

Offshoring skilled service activities require less physical transportation of goods, thus reducing costs associated with trade. Additionally, the relative high cost and scarcity of skilled labor in the United States make it more profitable for firms to offshore skilled service activities to countries like India, where the supply of skilled labor is abundant and more affordable. On the other hand, offshoring unskilled manufacturing activities involves physical transportation of goods and often requires more investment in infrastructure and facilities, which can further increase costs. Therefore, firms may be more hesitant to offshore unskilled manufacturing activities to countries like India where trade costs associated with such activities may be higher.

Why Is the United States More Likely to Offshore Skilled