The outsourcing of United States' information technology jobs to foreign countries, such as India, is good for the US economy and will create new jobs, says a study released on Tuesday.
Offshoring or outsourcing will add $124 billion to the US economy and create 317,367 new jobs, according to a study conducted by research firm Global Insight and sponsored by the leading IT trade group Information Technology Association of America.
The ITAA represents more than 500 large US high-tech companies, such as IBM, Microsoft Corp., Hewlett-Packard Corp, Amazon.com and Accenture.
The study found that offshore outsourcing generated about 90,000 net new US jobs in 2003, a number that is forecasted to rise to 317,000 by 2008.
In the software and services area, the economy will create 516,000 jobs over the next five years in an environment with global sourcing but only 490,000 without it, the study found. Of these 516,000 new jobs, 272,000 will go offshore and 244,000 will remain onshore.
"We have long held the position that global sourcing creates more jobs and higher real wages for American workers, said ITAA president Harris N Miller. "Now we have the data that prove it."
"Far from being an economic tsunami that washes away domestic IT employment as some believe, global sourcing helps companies become more productive and competitive. The savings produced through worldwide sourcing are invested in new products and services, in new market expansion, and, most importantly, in creating new jobs and increasing real wages for American workers," he said.
"While offshore IT software and services outsourcing has displaced and will continue to displace workers in IT software and services occupations, increased economic activity creates a wide range of new jobs--both IT and non-IT," the report states.
"As the benefits compound over time, the US economy operates more efficiently, achieves a higher level of output, creates more than twice the number of jobs than are displaced, and increases the average real wage."
The report says the benefits of offshore IT outsourcing contributes significantly to real US gross domestic product, adding $33.6 billion in 2003.
By 2008, the real GDP will be $124.2 billion higher than it would be in an environment in which offshore IT software and services outsourcing does not occur, according to the report.
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