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A report released by the nonprofit Work Foundation concludes that the threat to UK jobs from the offshoring from Britain to India is overblown, and that offshoring has not in fact made as big an impact on the UK economy as many believe.
There are little takers for this finding. The report cites UKs current account imports of computer and information services from India were 122 million pound. The findings appears to refute the statistical findings and that the figure of pound 122 million cited is misleading. The UK market revenues of the top five India-based players alone add up to 1.3 billion pound in 2006-07 a combined growth of just over 50 percent. This is excluding the other offshore work done by companies like EDS, Capgemini and IBM.
The report also finds little evidence of job migration that is just 5.5 per cent of all jobs lost in Europe were due to offshoring in the first quarter of this year.
According to The Work Foundation report, trade with developed countries far overshadows work going to India. For instance, the UK imports nearly four times more IT services and more than 16 times more business services from Germany than it does from India, it found. India ranks 15th on the list of countries the UK imports services from, the report said.
And even though there has been an increase in the import of services from India over time, the report says that this is on a much smaller scale than the popular myth of "an explosion of offshore outsourcing activities".
The report said: "High-value knowledge-intensive services are still principally located in developed countries. Despite the media frenzy, Indias growth in services has, in large measure has been in the usual support services. Improvement towards higher-end knowledge intensive services has been rather slow."
It added: "Indian business insiders see future offshore outsourcing as an advantage for Europe enabling it to focus on the thinking part of the job, providing opportunities for better jobs and knowledge work in Europe."
The Work Foundation report also points to the emergence of a new outsourcing model in India - as Indian companies diversify their operations, even acquiring footholds in the developed regions they are gaining business from. "An Indian IT Company may well have a base in that country but may also operate a number of satellite operations overseas and invest directly in operations in the European or US market," the report said.
The future for offshoring, it predicts, is likely to be "more complex", with companies offering a combination of near-shore and offshore activities and making use of different locations to optimise their business models.
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