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`Outsourcing may create 317,000 new jobs by 2008`
Washington, Apr 22: Amidst intensified campaign against outsourcing of jobs to countries like India , a study by Information Technology Association of America has found that offshoring is of `great benefit` to the United States .
Washington, Apr 22: Amidst intensified campaign against outsourcing of jobs to countries like India , a study by Information Technology Association of America has found that offshoring is of "great benefit" to the United States .
"The US economy has much to gain from global outsourcing and an environment of free trade, open markets and robust competition. The economic benefits include job creation, higher wages, higher GDP growth, contained inflation, expanded exports," the Virginia-based organisation said.
While outsourcing has displaced and will continue to oust workers in IT software and services, increased economic activity will create wide range of jobs - both IT and non-IT. In future, US economy will operate more efficiently and create more than twice the number of jobs displaced, with high wages.
Given the benefits that accompany offshore spending by US firms, ITAA said, "it would be unwise to enact protectionist legislation or regulations as a result of political pressures being created by this economic transition."
Meanwhile, the spending for global sourcing of computer software and services is expected to grow at a compound annual rate of almost 26 per cent, increasing from approximately $10 billion in 2003 to $31 billion in 2008. During the same period, total savings from the use of offshore resources are estimated to grow from $6.7 billion to $20.9 billion.
The cost savings and use of offshore resources lower inflation, increase productivity and lower interest rates. This boosts business and consumer spending and increases economic activity, it said. The incremental economic activity that follows offshore IT outsourcing created over 90,000 net new jobs as of 2003 and is expected to create 317,000 net new jobs by 2008.
The impact will vary for different industries. The major industry groups that are expected to gain a significant number of incremental jobs over the next five years include education and health services, transportation and utilities, construction, wholesale trade, financial services, professional and business services, and manufacturing.
Demand for US exports is expected to increase due to relatively lower prices of US-produced goods and services and higher incomes in the offshore outsourcing destinations. Real exports were $2.3 billion higher in 2003 and are expected to be $9 billion higher by 2008.
The benefits of free trade -- lower costs, higher labour productivity and more efficient production -- induce businesses to leverage the offshore resources.
Meanwhile, ITAA cautioned that the US government and industry should be responsive to the needs of displaced IT workers, as well as the need to continue encouraging the next generation of workers to enter the IT field.
Bureau Report
"The US economy has much to gain from global outsourcing and an environment of free trade, open markets and robust competition. The economic benefits include job creation, higher wages, higher GDP growth, contained inflation, expanded exports," the Virginia-based organisation said.
While outsourcing has displaced and will continue to oust workers in IT software and services, increased economic activity will create wide range of jobs - both IT and non-IT. In future, US economy will operate more efficiently and create more than twice the number of jobs displaced, with high wages.
Given the benefits that accompany offshore spending by US firms, ITAA said, "it would be unwise to enact protectionist legislation or regulations as a result of political pressures being created by this economic transition."
Meanwhile, the spending for global sourcing of computer software and services is expected to grow at a compound annual rate of almost 26 per cent, increasing from approximately $10 billion in 2003 to $31 billion in 2008. During the same period, total savings from the use of offshore resources are estimated to grow from $6.7 billion to $20.9 billion.
The cost savings and use of offshore resources lower inflation, increase productivity and lower interest rates. This boosts business and consumer spending and increases economic activity, it said. The incremental economic activity that follows offshore IT outsourcing created over 90,000 net new jobs as of 2003 and is expected to create 317,000 net new jobs by 2008.
The impact will vary for different industries. The major industry groups that are expected to gain a significant number of incremental jobs over the next five years include education and health services, transportation and utilities, construction, wholesale trade, financial services, professional and business services, and manufacturing.
Demand for US exports is expected to increase due to relatively lower prices of US-produced goods and services and higher incomes in the offshore outsourcing destinations. Real exports were $2.3 billion higher in 2003 and are expected to be $9 billion higher by 2008.
The benefits of free trade -- lower costs, higher labour productivity and more efficient production -- induce businesses to leverage the offshore resources.
Meanwhile, ITAA cautioned that the US government and industry should be responsive to the needs of displaced IT workers, as well as the need to continue encouraging the next generation of workers to enter the IT field.
Bureau Report