Supply side' would be the outsourcing of call centres

What Affects Unemployment? - A Simple Case Of Supply And Demand

The leading factors contributing to unemployment can be put into two categories:  They are ‘supply-side' factors and ‘demand-side' factors. 

Supply-side factors are dominant when an organisation is unable to fulfil product demand for the same price as their competitors.  There is still a market for the company's product or service, but it is available for less elsewhere.  Minimum wage restrctions stop the employer from reducing employee salaries and so the company is often forced to downsize.

Demand-side factors occur due to reductions in demand for a product or service provided by a business.  This affects the company's revenue and hence, they must reduce outgoings.  This is often achieved by downsizing.

An example of ‘supply-side' would be the outsourcing of call centres.  Some companies now opt for outsourcing call centre operations to countries like India, due to the vast difference in cost for the same service.  Some people are offended by this, but if you owned a call centre and could reduce overheads by as much as 50% would you not consider it?  Improvements in technology and telecommunications has made this achievable, but it does have a detrimental effect on our own economy.

An example of ‘demand-side' is the car sales market.  Because of the perception that our economy is struggling, some people are now reluctant to purchase brand new cars, opting for less expensive used cars, or putting off upgrading their vehicle altogether.  If you have researched buying a newly produced car recently you will have seen that there are exceptional offers available, as the manufacturers and distributors are struggling to generate custom.

Although this is the reality there is very little we can do about the situation.  However, by being concious of it, we can look at alternative ways of earning additional income, taking advantage of the trends.   

If you have ever considered starting your own business then you would benefit greatly from identifying the impact that technology and the Internet is having on industry and business.  What you should notice is that most successful businesses today rely on the Internet to market and promote products.  This proviedes them access to a global market and with the advancing information age it is necessary to harness the world wide web whenever possible!

I hope this article gives you valuable insight, if and when you consider starting a part-time business in the future.