Fear of offshoring worse than the reality

2008

Emerging economies such as India, Singapore and the Philippines are not plundering thousands of high-quality European jobs through offshoring, despite what many workers tend to assume, new European research has suggested.

A study by the Ireland-based European Union agency the European Foundation for the Improvement of Living and Working Conditions (Eurofound) has concluded that between 2003 and 2006 just eight per cent of jobs lost were lost because they were moved overseas.

Workers in Portugal and Ireland had the most reason to grumble, with a quarter of jobs lost in the period being offshored.

But in the Netherlands and Belgium this figure fell to just five per cent, the survey added.

The research echoes a study by the British think-tank The Work Foundation in July last year that reached much the same conclusion.

It found fears that large numbers of high-quality Western jobs were being lost to rapidly developing offshoring sites were overstated, suggesting an average of 5.5 per cent of jobs had gone this way, little changed on the 3.4 per cent recorded in 2005.

The Eurofound survey also pointed out that it was in high- to medium-tech sectors rather than in low-tech sectors that offshoring had the biggest effect.

The sector accounting for the highest proportion of EU jobs lost through offshoring (one in four of the total) was banking and insurance, a service sector with a generally high-skill profile, it said.

Perhaps unsurprisingly, when it came to attitudes to offshoring, policymakers and business organisations tended to stress the positive effects of increased trade for consumers, in particular lower prices and more choice through increased competition.

But trade unions in general seemed to focus mainly on dealing with the consequences of globalisation on employment, in particular the relocation of jobs to other areas.

And when it asked EU workers whether for them globalisation had positive or negative connotations, just four out of 10 said it was a positive, compared with nearly two thirds in 2003.

In the same period, the proportion seeing globalisation as a threat to employment rose from 39 per cent in 2003 to 47 per cent in 2006, it added.

The Work Foundation study also suggested that the number of jobs in sectors popularly believed to be vulnerable to outsourcing, such as call centres, had actually gone up rather than down in the UK.

Travel (at £626 million) and transportation (£289 million) were the largest services imported from India, while computer and information services (£122 million) were only the third largest import category, it added.

Older Comments

The Portugal figure was interesting. I have spent about 8 months in Portugal since 2002. In conversations with university students in all areas of the country (Coimbra, Viana do Castelo, Lisbon, Faro) I found that the vast majority of them had THE career goal of working for the government. How relevant I do not know.

Art Stewart San Antonio, Texas