Offshoring Creates More IT Jobs in the US
Information technology jobs will continue to grow in the US because of globalisation and offshoring, according to a new report.
Belying the common belief that shifting IT jobs to countries like India is a threat to workers in the US, the report states that IT job opportunities will grow in America because cost savings achieved by outsourcing will help fuel new business opportunities.
This in turn will result in creating new jobs at those organisations, according to a study by Association for Computing Machinery, a professional development organisation that includes academic, government and industry officials from the information technology field.
The study titled 'Globalisation and Offshoring of Software' cites estimates that between two to three per cent of IT jobs will be lost annually to lower-wage developing countries through offshoring.
But it said the US IT sector's overall growth should outpace that loss of jobs, expanding opportunities for those trained in fields such as software architecture, product design, project management and IT consulting.
Citing US Bureau of Labour Statistics data, the study points out that despite a significant increase in offshoring in the past five years, more IT jobs are available today in the US than at the height of the dotcom boom.
In fact, IT employment in the US in 2004 was 17 per cent higher than in 1999, and IT jobs are predicted to be among the fastest-growing occupations over the next decade.
And even with greater globalization, the report notes that the lower wage scales in India and China are not pushing down pay for US IT workers.
Citing information from the US Bureau of Labour Statistics, the report said IT workers have seen steady gains in average annual wages for different fields in the sector of between two to five per cent a year.
Giving an example of the deeply interconnected software industries of the US and India, the report points out that India benefits from generating new revenue and creating high-value jobs.
The US, on the other hand, benefits from having US-based corporations achieve better financial performance as a result of cost savings associated with offshoring some jobs and investing increased profits in growing business opportunities that create new jobs.
The study is also critical of market research reports projecting widespread job losses to offshoring.
"The objectivity and quality of other data sources, especially the data in reports from consulting firms and trade associations, is open to question, as these organisations may be serving their own agendas. Projections are always more suspect than data on current employment levels," it said.
The study notes that globalisation trends in the software industry have been fuelled by rapid advances in information technology as well as government action and economic factors.
"We changed the world," said Moshe Y Vardi, co-chair of the study group, and director of Computer and Information Technology Institute at Rice University, "and now it is changing us."
The study cites the wide availability of low-cost, high-bandwidth telecommunications, standardised software platforms and applications, digitalisation of work processes as well as education and national policies as key driving factors.
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Outsourcing seen at $17.6 billion by 2010
As the world's software companies increase their reliance on offshoring for development, Indian IT industry stands a huge chance to share the pie, thanks to their technical capability, domain expertise and flexibility, says a report by IT research firm Sand Hill.
The report also names India as the ideal offshoring destination in the world.
Among all the independent software vendors surveyed in the US, it was found that over 83 per cent offshore their product development projects to India while a mere 5 per cent offshore their projects to Canada or China.
The report, commissioned by Pune-based Persistent Systems, showcases a rising maturity amongst ISVs in identifying and engaging the appropriate approach to ensure success in their offshoring initiatives
The study is a comparative analysis between the findings of the report on the offshoring industry in 2005 to those acquired from a similar study conducted in 2003.
Taking views from CEOs, CTOs, VPs of engineering and R&D departments of top US-based product development companies, the report sheds light on the offshoring industry at a time when software companies are getting more and more reliant on offshoring, making it an integral part of their business strategy.
Among the many aspects of the offshoring industry analysed in the report are trends and challenges in offshoring, augmentation in functions sent offshore, demand for outsourcing partners as compared to captive centres, and a comparison between the performance of both these models.
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Softura Application Wins Big for University of Michigan
Softura is pleased to announce that an application developed by Softura for The University of Michigan and University of Illinois Nursing Departments was awarded the Susan Coleman Memorial Scholarship-Most Influential to the Field Award. Of the 100 abstracts received, this application has been deemed of exceptionally high scholarly merit by a committee of reviewers and will be awarded the Highest Scholarships given by this committee.
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