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May 25, 2003

Why the critics of offshore outsourcing should relax: Conference Board


I *finally* came across an article that places the much bandied-about Forrester Research numbers (saying 3 million+ Americans will jobs due to offshore outsourcing) in proper perspective.

Fortune writer David Kirkpatrick in his column titled "Net makes job exports easy", as expected, quotes the Forrester Research "estimates that 3.3 million US jobs will move offshore by 2015". But, thankfully, he also spoke to Ms.Gail Fosler, chief economist at research firm Conference Board, who says "the critics should relax". Fosler doesn't think that the trend will significantly hurt US employment. Fosler also points out that the US services sector loses about ten million jobs every year even as it creates another 12 million. "So a couple hundred thousand jobs a year going to India is a drop in the bucket," she says. In addition, this new means of holding down costs will combat inflation, benefiting consumers. And it will help US companies remain competitive in an increasingly brutal global marketplace.

(Wow!)

The Fortune column also gives a lot of prominence to the "Better quality of work" delivered by offshore workers.

(Extract:)

BPO doesn't just save money; it generally results in better work. It attracts the top people in the new countries, since the jobs tend to pay more than most local positions. Turnover is low, and people work hard to improve their skills.

"The shock has been that the quality of the work's better," says Dennis McGuire, CEO of TPI, an outsourcing consulting firm in Houston. "It reminds me of back when we assumed that if something was made in Japan, it was worse quality. We were wrong."

(Extract ends)

Click Here to read the full Fortune article.