Indian outsourcing 'saves US jobs'
Published: 14 Jul 2003 13:48 BST
Sending software coding and business process jobs out to India have improved employment figures in the US, says an Indian IT association.
Nasscom (National Association of Software and Services Companies) said it wanted to tell its side of the story by "placing the facts and figures in perspective."
Citing statistics from market research firms such as McKinsey, the body said the US stands to save over three hundred billion dollars over the next six years by shifting some business operations overseas.
"The ITES (IT Enabled Services) /BPO (Business Process Outsourcing) market is likely to touch $142bn (£87.05bn) in 2009, against the current cost of $532bn for these services. The difference of $390bn represents the net saving the US economy can expect from outsourcing," Nasscom said on its Web site.
According to a recent report from IT analyst Gartner, India will gain the most from this wave and is expected to soak up more than half the world's offshore business outsourcing revenue this year. India's revenue from BPO will grow from slightly under $1bn in 2002 to $1.2bn in 2003 and will represent 66 percent of the offshore BPO market, Gartner predicted.
"US banks, financial services and insurance companies have saved $6bn to $8bn in the past four years owing to IT outsourcing to India," Nasscom claimed. "Helped by these savings, companies have prevented layoffs and instead added 125,000 more jobs."
This revelation is expected to add more fuel to the debate on the impact of outsourcing to local economies and the workforce.
Labour groups in the US have long protested the trend of offshore outsourcing. Besides fears of job losses in the US, they have questioned the skill levels of foreign IT workers. In the longer term, they fear the move will also erode the country's technological leadership.
Most recently, Microsoft's plans to relocate its customer support work in Texas and North Carolina to India has raised the ire of unions such as the Seattle-based Washington Alliance of Technology Workers, which claimed that hundreds of US jobs could be lost as a result of the move.
When Oracle said last week that it planned to double its workforce in India, it took pains to add that the new jobs would not mean that US jobs would be lost. In Australia, a survey of IT managers has found that an overwhelming majority of them would not recommend IT as a career, mostly due to the poor domestic conditions caused by outsourcing.
Governments have also contributed to the outsourcing saga, with the New Jersey state senate recently approving a bill requiring that only citizens or legal residents of the United States work on certain state contracts.
"Instead of being understood and utilised with maximum efficiency, outsourcing is being talked of as an unhealthy epidemic, which is out to take jobs and ruin economies," Nasscom said.
In addition, the body stressed recent legislative moves in the US and the possible reduction of overseas H1B and L1 work visas stand testament to the "low awareness about how Indian IT industry and its professionals have benefited global organisations."
Nasscom currently has a membership of over 800 IT companies, including Indian communications giant Tata Telecom, as well as software and services provider Infosys Technologies.
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