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Story URL: http://www.silicon.com/research/specialreports/offshoring/0,3800003026,39126963,00.htm

Offshoring an unstoppable force in IT
7.6 million jobs sent overseas...

By Sylvia Carr

Published: Tuesday 11 January 2005

The offshoring of IT jobs is a growing trend that not even legislation can stop, according to a new research report from consultancy Frost & Sullivan.

Any attempt by a national government to control the exporting of jobs to countries where costs are low with legislation or job caps would put the nation "at a competitive disadvantage to companies based in nations without such laws", says the report.

"Thus, any legislative action to protect IT jobs in developed regions of the world would have to be initiated as part of a global alliance of developed governments to be effective and it is felt that the probability of that occurring is non-existent," it continues.

Over the last three years the number of IT jobs offshored by France, Germany, Hong Kong, Japan, the UK and the US should increase by around 826,000, with a value of $51.6bn, the report predicts.

Significant growth in the number of IT jobs exported is expected in each area except the UK, where growth was essentially flat, according to Frost & Sullivan.

The US and Japan are presumed to be the top exporters in 2004, the study says. Together they will account for 70 per cent of the 7.6 million IT jobs offshored in the six areas mentioned above. The total value of these jobs is estimated at $464bn.

In Europe, Germany leads the pack with 985,000 IT jobs expected to be sent offshore followed by the UK and France with around 470,000 each.

The types of IT jobs most commonly offshored include customer support, tech support, software and hardware development and testing, network administration and help desk, according to the report.

The UK is unusual in that it should export more software development and testing jobs than any other IT positions - 100,000 more of these jobs will go offshore than IT customer service, the report predicts.

Given that offshoring is not going away, Frost & Sullivan suggests the developed countries sending jobs overseas could compete by creating a well-educated and innovative IT workforce.