Outsourcing to India didn't cause British job loss:
[World News]: London, Jan 14 :

Moving British services jobs overseas, to countries such as
India, has not led to a net loss of employment in
Britain, according to research by the
International Monetary Fund (IMF).

Research by economists at the global financial
watchdog found there was "no significant negative
effect" on services industries from outsourcing
jobs such as call centres, IT and back office

The findings come as a boost to the British
government, which has argued outsourcing allows
British companies to use the cost savings to
create higher paid jobs elsewhere.

The IMF staff focused on Britain because of the
level of anxiety over an exodus of jobs overseas
and the sheer scale of outsourcing by British

The research found that India, which has been the
focus of trade union anger over call centre jobs,
outsourced almost as much business services work
as Britain.

Britain engages in about three times as much
services outsourcing as a share of economic
wealth as the US, they found. They examined 13
services activities from telecommunication to
architects and found no evidence that sectors
with higher levels of outsourcing had slower rate
of job creation.

Mary Amiti and Shanh-Jin Wei, economists at the
IMF, told The Independent: "The risk of service
outsourcing dramatically reducing jobs growth in
the advanced economies has been greatly

They acknowledged there was "tremendous anxiety",
that the global boom in services trade was
dominated by "lopsided, one-way" outsourcing from
developed to developing countries, leading to
huge jobs losses in nations such as Britain and
the US.

"These results suggest that service outsourcing
not only would not induce a fall in aggregate
employment but also has the potential to make
firms or sectors more efficient, leading to job
creation in the same sectors to offset the lost
jobs," they said.

The research showed that while Germany and
Britain topped the table in terms of raw numbers
of IT jobs relocated offshore, in terms of a
share of GDP the largest outsourcing was
undertaken by Cyprus, with Britain coming in 30th
and the US 73rd.

--Indo-Asian News Service

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