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Last Updated: Monday, 17 May, 2004, 17:52 GMT 18:52 UK
US outsourcing is 'accelerating'
Indian call centre
India has won a great many contracts from the UK and US
By the end of next year some 830,000 US service jobs will have been exported overseas, according to a survey on the growing trend of outsourcing.

The latest figure from research firm Forrester marks a 40% increase on its previous estimate, as more companies look for cheaper foreign labour.

By 2015 it predicts that a total of 3.4 million previously US-based positions will have been relocated overseas.

The growth in outsourcing has become a hot US political issue.

Vote winner

With US presidential elections in the autumn, both President George W Bush and his Democrat opponent John Kerry have had to say they will work to protect US jobs.

Yet supporters of outsourcing say that shifting jobs such as call centre positions to India actually benefits developed economies like the US because it enables firms to reduce costs and in turn the prices they charge domestic consumers.

Those in favour also claim that creating new jobs encourages a wider increase in trade between the two countries in question.

Forester analyst John McCarthy says more and more companies are choosing to jump on the outsourcing bandwagon because they have seen others do it successfully and because they want to remain as competitive.

Not convinced

Yet Mr McCarthy adds that 58% of those US firms questioned said they did not use any overseas facilities and did not have any plans to do so.

He also said that any major increase in global geopolitical concerns, such as the situation in the Middle East worsening or renewed tension between India and Pakistan, could slow offshoring.

"While no factor will put a crimp in the move offshore, Forrester can see a scenario where the combination of global tensions and more onerous legislation combine to curtail its growth," said Mr McCarthy in the report entitled Near-Term Growth of Offshoring Accelerating.

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05 Mar 04  |  Business

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