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-By Jayan CM
Within two years of its 2003 starting, the San Diego-based maker of cell phone operating systems employed a work force across the globe. Now, only 30 of the companys 120 employees live locally, with the rest is spread across offices in India, Israel and Croatia. "This is the reality of a startup company," says the chief executive of Sky Mobilemedia.
His ballpark figure is that he can hire three or four software engineers in Bangalore, India, for the cost of one in San Diego. "The cost structure is exorbitant if you have everyone here," he stated further.
This reality may be shared by an increasing number companies and their workers, according to an analysis of the potential offshoring of jobs.
According to a recent study it has been estimated that nearly 31 percent, of local jobs have the potential to be moved overseas in the next two decades.
On the other hand Princeton economist Alan Blinder recent study states that 37.7 million jobs, or 29 percent of the current U.S. work force, could be outsourced to other countries within the next 10 to 20 years. This is perhaps the most ambitious statement in an attempt to quantify the effects of globalization on American workers. The Blinder reports is based on comprehensively study on more than 800 jobs thats has been segregated as highly offshoreable and unoffshorable.
Not surprisingly, it has been noted that computer programmers and data-entry clerks were the most at risk. But other jobs under "highly offshoreable" that blends with the employment variety include occupations like editor, drafter, graphic designer and insurance underwriter.
Blinder said he is estimating the number of jobs that potentially could go offshore, not the number that actually will move overseas. Nonetheless, he sees big changes ahead.
But not everyone is agreeing with Blinder's findings. Several economists say Blinder vastly overestimates the potential for offshoring. Jagdish Bhagwati, a Columbia University economics professor terms Blinder's analysis as "dead wrong."
Blinder also fails to consider that as the Chinese and Indian economies continue to grow, they will need goods and services provided by U.S. workers. I would be astonished if something like he is predicting actually happened, "says Bhagwati".
Bhagwati and others says "that Blinder wrongly believes that any tradable job in the U.S. work force is vulnerable to offshoring. But in many cases, it will be workers in developing countries who will be more at risk as technology advances".
Companies in China and India will have the opportunity to employ the services of a highly skilled U.S. architect or accountant rather than settle for a lower-skilled practitioner in their own country, says Bhagwati. At such instance it will be USA who stands to gain and not otherwise.
Offshoring is nothing new for the U.S. companies as it have been moving jobs abroad for a generation. First it started with factory work moving to Mexico, China and other low-wage countries where everything from designer clothes to television sets could be made for a fraction of the labor costs in the United States.
Next to follow the offshore wave was the American jobs in customer service and data entry. Today, the scenario is that U.S. companies employ more than 900,000 offshore service workers, according to McKinsey & Co.
Regardless of which argument proves to be more accurate, its likely to be of little effect for the time being. The fact according to them remains that several hundred thousand U.S. jobs per year will be lost to offshoring.
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