Not really so according to this

http://www.globeinvestor.com/servlet/story/RTGAM.20070522.wibworld22/GIStory/

Offshoring may not be the real job killer
Barrie McKenna


Tuesday, May 22, 2007

A recurring theme in the best-selling Indian novel and soon-to-be Bollywood movie, One Night @ the Call Center, is the obnoxious American customer who makes the lives of the Delhi phone operators miserable.

It's a refreshing flipside to the Western caricature of the Indian call centre worker as job-stealer with a fake English name and tenuous grasp of the language.

So whose workers are the real victims, anyhow? Ours or theirs?

As it turns out, Bollywood's portrait may not be far off the mark.

Offshoring of the service industry to rapidly growing technology hubs in India and Malaysia has been vastly exaggerated, according to a recent study by Jacob Funk Kirkegaard, a research associate at the Peterson Institute for International Economics in Washington.

Public anxiety has been whipped up by politicians, labour unions and even self-interested management consultants, who have forecast that millions of jobs could move offshore within a decade. And the trend, they warn, is creeping up the skills ladder -- from call centre operators today to engineers and accountants tomorrow.

The reality isn't quite as bleak, Mr. Kirkegaard argues.

Call centre workers may adopt improbable telephone names and struggle with their English, but Bangalore isn't the job killer that critics claim. It may in fact be just a way station of a technology revolution.

There's a "near complete absence of empirical evidence" of an offshoring problem, according to Mr. Kirkegaard. The impact on employment in the United States, Europe and Japan is, at best, "minimal," he concludes.

Mining data from the Organization for Economic Co-operation and Development, the U.S. Bureau of Labor Statistics and elsewhere, he found that in 2004 and 2005 slightly less than one million Americans were victims of mass layoffs in a labour force of roughly 150 million. And of those, offshoring accounted for just 4 per cent, or one in 25 laid-off workers.

"One cannot escape the conclusion that the heated public and political debate on the issue has been vastly overblown, at least in the United States, and that direct employment impacts are very limited," the study says.

To focus on offshoring alone also betrays the dynamic nature of the job market. The U.S. economy, like Canada's, is at once a job creation and job destruction machine. In the third quarter of 2006, for example, U.S. businesses created 7,364,000 jobs. Over the same period, 7,345,000 jobs vanished, for a net gain of 19,000.

Ben Bernanke, the U.S. Federal Reserve Board chairman, has lamented that too often the jobs debate is seen as a one-way street. And yet globalization and offshoring "work both ways."

The United States runs a significant trade surplus in services. It imports lower-skilled work from places such as India, but it exports a lot more high-value work.

Certain types of lower-skilled service functions have moved overseas to places where labour and office space is cheaper. And the trend is likely to continue for jobs that can be "routinized and sharply defined," Mr. Bernanke has said.

But that isn't necessarily a bad thing. The United States, like Canada, is still a magnet for higher-end work, which typically requires personal contact. "For some considerable time, outsourcing abroad will be uneconomical for many types of jobs, particularly high-value jobs," Mr. Bernanke said.

For example, computer programming jobs are disappearing in the United States, as are call centre jobs. But there are more computer engineering jobs than ever.

To focus on offshoring is to miss the real story. Technological change is wiping out far more jobs than offshoring, even in the information technology industry. And it's a trend that is also hitting India and China.

Yes, call centre jobs are moving to India, where a single transaction costs roughly $3 (U.S.), compared with $6 in the United States. But even $3 can't compete with the pennies it costs for that transaction to be handled by automated speech recognition software or Web-based self service.

So even as we fret about the call centre operators of Delhi and Bangalore, the real threat is the computer voice sweetly urging you to "press 1 for service."

But it can kill people !.

http://www.rediff.com/money/2007/may/24nri.htm

Your humble SNS !.

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Speech by Thomas Friedman of The New York Times....

"When we were young kids growing up in America, we were told to eat our
vegetables at dinner and not leave them. Mothers said, 'think of the
starving children in India and finish the dinner.' And now I tell my
children: 'Finish your maths homework. Think of the children in India
who would make you starve, if you don't.'"