Outsourcing backlash will fade - Gartner
Published: 23 Jul 2003 07:56 BST
The backlash against India caused by outsourcing will fade away in two years, according to analysts from IT market research firm Gartner.
Gartner principal analyst Rolf Jester, quoted in the India-based Business Standard news daily, said the current unhappiness felt by US workers and politicians about IT jobs being relocated to India will ebb as the global economy improves and unemployment levels decrease.
"There is a global economic recession leading to loss of jobs. The politicians are capitalising on this. However, once the economy picks up, all this will disappear," Jester was quoted as saying.
Jester was speaking at the Gartner India Summit 2003, held on July 16 and 17 in Mumbai. A hot topic at the two-day seminar was business process outsourcing (BPO) and offshore IT services.
Offshore outsourcing is now a "mega-trend", according to Gartner analysts quoted in the Indiatimes news daily, a development that will cause up to 10 percent of IT professionals in the US to lose their jobs by 2004.
Offshore outsourcing is also the fastest growing IT industry segment, growing at a compound annual rate of 29 percent, according to Gartner.
India-based IT companies and US multinationals are concerned about the political backlash arising from the export of jobs from the US to India, even as the trend grows year by year.
At the seminar, Gartner analysts told Indiatimes and the Financial Express daily that it was unlikely that the US government would curb firms ramping up hires in India while downsizing in the US.
Despite bills passed in the US houses of government aimed at slowing or even stopping offshore outsourcing, none have becomelaw yet, observed the Gartner analysts, because American authorities tend not to interfere with the right of businesses to operate in the most competitive manner possible.
However, Indian firms should not ignore the problem completely and should manage some of this unhappiness overseas by hiring local staff in countries such as the US and UK, and forming partnerships with local firms, said Partha Iyengar, research VP, Gartner India.
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