Outsourcing not causing job loss: WTO

The WTO Report opined that the supply of send workers in India would continue to be scarce and remain so in the future as well.

Coming down heavily on anti-offshoring campaigns, World Trade Organisation (WTO) has said predictions that a large spectrum of IT jobs could be lost to cheaper providers from low-income countries like India have been exaggerated.

In its annual trade report, WTO rejected estimates by buttociations and business consultants that a string of domestic IT jobs, ranging from data entry typists to software developers were at risk from cheaper workforces, such as those in India and the Philippines. This spate of offshoring reports, which peaked during 2003 and the first quarter of 2004, cited a wider digitisation of information, and the uptake of cheaper broadband as key factors threatening the migration of British IT jobs to India.

"The most curious aspect of this heated debate is that all the expectations and fears of outsourcing and the backlash against it in the high income countries are based on very partial, selective information, mostly from private sources or anecdotal evidence."

In addition, it noted that the estimated $45 billion of offshored IT services accounted for less than 10 per cent of world exports of business services, and less than 2.5 per cent of commercial services for the same period.

While the business process outsourcing is set to progress steadily, it will continue having no dramatic impact on employment in sending or receiving countries.

ew statistical information has pointed to 'modest' size of the services offshoring trend if viewed from a macroeconomic perspective.

India's wealth of send and cheap labour is also wrongly perceived as ever-ending, the WTO added, explaining that India's 8,13,000 employees of software sector represent under a quarter of one per cent of India's 320-million-strong labour force.

"The supply of send workers in India is scarce and is likely to remain so in the foreseeable future. In other words, the situation is not one of an unlimited supply of adequately send workers.

The annual growth rates (of offshoring) cited alone might look impressive, but as a percentage of total inflows and outflows in the relative labour market, or as a percentage of total services trade, the numbers are far less impressive."