[biztech-discussion] Flying jobs.....In case you missed it
- From: MzWord@xxxxxxx
- To: biztech-discussion@xxxxxxxxxxxxx
- Date: Tue, 18 May 2004 20:10:00 EDT
From today's Chronicle...... Lisa
Jobs flying faster from U.S.
Estimate for 2006 raised by 40% -- to 800,000
John Shinal, Chronicle Staff Writer
Tuesday, May 18, 2004
U.S. corporations are sending work overseas faster than previously thought,
according to Forrester Research Inc., whose controversial report 18 months ago
helped stoke the national controversy over offshoring American jobs.
In its latest study, Forrester predicts that by the end of next year, U.S.
firms will offshore more than 800,000 service jobs, 40 percent more than the
firm estimated previously. Forrester's overall estimate remains the same: The
firm predicts that about 3.3 million jobs will go overseas by 2015.
The Cambridge, Mass., researcher said the largest U.S. employers are
expanding the types of work they send overseas. Where telemarketers and
software
developers used to bear the brunt of the job loss, bank loan processors,
insurance
claims adjusters and even legal assistants now share the pain.
Critics of offshoring seized on the original Forrester report as evidence
that shipping jobs overseas would devastate service-sector employment and the
middle-class workers who fill those occupations. Yet the report itself was
criticized by economists, company executives and others who have defended
offshoring
as a painful but necessary result of a global economy.
The issue has become a political hot button, with some in Congress calling
for laws to limit the type of work that can besent abroad and privacy advocates
saying the practice puts sensitive data into the hands of overseas firms.
Despite the criticism, the largest U.S. companies are accelerating their
offshoring plans, and by 2008, more than half the Fortune 1000 will have
overseas
operations, according to the report.
Even companies that aren't prepared for the transition are choosing to export
jobs anyway, said Forrester analyst Stephanie Moore. "We're seeing crazy
interest in offshore outsourcing for the cost savings," said Moore, who spoke
at a
news conference in Orlando.
The aggregate number of jobs sent overseas to date will pass half a million
this year, and the figure will surpass 1 million by 2006, Forrester said.
In contrast to conventional wisdom, the majority of those jobs will not be
farmed out to large outsourcing firms in India and other countries. Rather,
they
will be located in foreign subsidiaries of Fortune 1000 companies, according
to Forrester.
That contention is similar to one reached by two UC Berkeley economics
professors in a book they published last year.
"People don't realize that when (U.S. firms) go abroad, for the most part
they use their own workers," said Ashok Bardhan, a senior research associate at
the Fisher Center for Real Estate and Urban Economics.
In fact, two-thirds of the U.S. companies that sent work offshore during the
1990s kept the work with their own units and affiliates, said Bardhan, who
co-authored the book "Globalization and High-Tech Industry: California and
Beyond."
Many in Silicon Valley have faulted Forrester's methodology and say its
conclusions amount to nothing more than fear-mongering. Speaking of the
previous
Forrester Report, Vinod Khosla, a partner with the Menlo Park venture capital
firm Kleiner Perkins Caufield & Byers, called the methodology suspect and its
conclusions misleading.
"The forecasts are wrong," Khosla said last week at a meeting of Silicom
Ventures LLC, a group of angel investors.
The Forrester team that assembled the report said they interviewed more than
300 of their corporate clients to learn which types of jobs they planned to
offshore. Then, they used statistics from the U.S. Bureau of Labor Statistics
to
calculate the total job loss.
Still, others have said that a debate about how many jobs American
corporations create overseas should include a discussion about the number of
jobs
created by foreign firms here.
"During a difficult economy, people look for scapegoats," said Carl Guardino,
chief executive of the Silicon Valley Manufacturing Group, whose member
companies employ more than 250,000 workers.
Rather than implementing protectionist measures, "let's focus on the right
problem, which is competitiveness," said Guardino, who added that his group
supports funds to retrain workers whose jobs have gone overseas.
Bardhan stopped short of criticizing the report but said he was skeptical
that anyone can identify exactly how many jobs will go within a specific time
frame.
"There's no way to do that with precision," said Bardhan. "I don't know how
anyone can say with precision that this (exact) number of jobs will go by this
(particular) year."
Even as they embrace the trend, U.S. companies worried about political
fallout from their employment moves are being more secretive about their
offshore
plans.
The offshoring moves aren't made in a vacuum, and the issue has been raised
by elected officials who decry the loss of U.S. jobs. As a result, many of
Forrester's clients who are offshoring are doing so "underground," said Moore.
"We have one client who refused to use the word offshore, she said.
E-mail John Shinal at jshinal@xxxxxxxxxxxxxxxx
U.S. service jobs predicted to be offshored by category
2003 2004 2005 2006 2007 2008 2010
2015
Management 3,500 15,000 34,000 42,000 48,000 67,000 106,000
259,000
Business 30,000 55,000 91,000 105,000 120,000 136,000 176,000
356,000
Computer 102,000 143,000 181,000 203,000 228,000 247,000 322,000
542,000
Architecture 14,000 27,000 46,000 54,000 61,000 70,000 93,000
191,000
Life sciences 300 2,000 4,000 5,500 6,500 9,000 16,000
39,000
Legal 6,000 12,000 20,000 23,000 26,000 29,000 39,000
79,000
Art, design 2,500 4,500 8,000 9,000 10,000 11,000 15,000
30,000
Sales 11,000 22,000 38,000 47,000 55,000 67,000 97,000
218,000
Office 146,000 256,000 410,000 475,000 541,000 616,000 815,000
1,600,000
TOTAL 315,300 536,500 832,000 963,500 1,095,500 1,252,000 1,679,000
3,314,000
Source: Bureau of Labor Statistics; Forrester Research Inc. Chronicle
Graphic
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