A study conducted by the Organisation for Economic Co-operation and Development (OECD) reports that task automation has had more impact on IT job in software development companies losses than off-shore / outsourcing to low-cost locations such as India. The comprehensive OECD research, The share of employment potentially affected by off-shoring an empirical investigation found that only one in five jobs could be hit by the continued growth of off-shore outsourcing, including those in IT, accounting, consulting, financial services and research and development.
Based on a detailed analysis of occupational data for OECD countries and other business and economic statistics, the study claims in the long term, the benefits of off-shore outsourcing and globalisation of services will outweigh any short-term job losses.
The report says: “In the long run the positive benefits of services off-shoring outweigh the costs, even though the adjustment process may occasionally be difficult in the short run.” Examination of economic data by OECD found no “systematic evidence” that net outward investment of services is associated with significant levels of decline in employment as a result of off-shoring.
The report says: “Exports of business services are found to have a positive statistical association with the share of employment potentially affected by off-shoring, suggesting that increases in demand and production have also raised demand for these types of ICT-using occupations.”
In fact, the report found IT standardisation and automation, not off-shore outsourcing, more likely to be responsible for rendering many jobs and roles redundant. Coming in the same week as the study conducted by the US IT industry body, the Association of Computer Machinery, also claimed off-shore outsourcing has not hit IT jobs, saying there are more jobs now, than there were at the height of the dot-com boom.
Welcoming the report, Mark Kobayashi-Hillary, author of Outsourcing to India: The Off-shoring Advantage declared it to be the most authoritative analysis of the benefits of open free trade regarding export and import of IT services. He said: “Quite often the economic reality is directly opposed to the media perception of off-shoring as a destroyer of jobs and talent.”
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