| ore outsourcing of software and information | | | | challenge to the United States' technological leadership, |
| technology services tasks not only is boosting the U.S. | | | | economic vitality and military security. |
| gross domestic product but also helping to generate | | | | According to the new ITAA-sponsored report, 2.3 |
| U.S. jobs, including positions in the IT sector, according | | | | percent of total IT software and services spending by |
| to the report. Released Tuesday, it was prepared by | | | | U.S. corporations in 2003 was devoted to offshore |
| research firm Global Insight and sponsored by the | | | | outsourcing activities. That figure will rise to 6.2 percent |
| Information Technology Association of America trade | | | | in 2008, the study says. During that same time period, |
| group. | | | | total savings from offshoring are expected to climb |
| ITAA's members include tech giants IBM, Electronic | | | | from $6.7 billion to $20.9 billion. |
| Data Systems and Accenture. These companies are | | | | The cost savings and use of offshore resources |
| among those that are locating operations in | | | | "lower inflation, increase productivity, and lower interest |
| lower-wage countries such as India. | | | | rates. This boosts business and consumer spending |
| "While offshore IT software and services outsourcing | | | | and increases economic activity," the report states. |
| has displaced and will continue to displace workers in | | | | The study says the benefits of offshore IT outsourcing |
| IT software and services occupations, increased | | | | added $33.6 billion to real gross domestic product in |
| economic activity creates a wide range of new | | | | the United States last year. By 2008, real GDP is |
| jobs--both IT and non-IT," the report states. "As the | | | | expected to be $124.2 billion higher than it would be in |
| benefits compound over time, the U.S. economy | | | | an environment in which offshore IT software and |
| operates more efficiently, achieves a higher level of | | | | services outsourcing does not happen, according to |
| output, creates more than twice the number of jobs | | | | the report. |
| than are displaced, and increases the average real | | | | The "incremental economic activity" from offshore IT |
| wage." | | | | outsourcing created more than 90,000 net new jobs in |
| The study comes as the practice of farming out | | | | 2003, and is expected to create 317,000 net new jobs |
| high-skilled work to low-wage countries has become a | | | | in 2008, according to the report. |
| hot-button issue and part of the U.S. presidential | | | | Shipping software and IT services work abroad leads |
| campaign. So-called offshoring also is pitting companies | | | | to higher real wages for U.S. workers through lower |
| against workers. Technology professionals group | | | | inflation and higher productivity, according to the study. |
| IEEE-USA recently published a position paper with a | | | | Real wages were 0.13 percent higher in 2003 and are |
| dramatically different conclusion from that of the ITAA | | | | expected to be 0.44 percent higher in 2008, the study |
| study. IEEE-USA said the outsourcing of high-wage | | | | states. |
| jobs to low-wage countries poses a serious, long-term | | | | |