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AI Is Rewriting the Economics of Outsourcing
Abhinav Agrawal · 2026-06-05 · via HBR.org

by Abhinav Agrawal

June 5, 2026

Jorg Greuel/Getty Images

Summary.   

Generative AI is changing the economics that fueled decades of outsourcing growth by automating many routine, rules-based tasks that companies once sent offshore for labor savings. Rather than

For more than three decades, outsourcing has rested on a simple economic idea: If work can be defined, standardized, monitored, and moved to a lower-cost labor market, someone else can often do it more cheaply.