UK, Economy, Evalueserve, Outsourcing
Outsourcing to give long term benefit to UK economy - Evalueserve
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According to a just published research report tilted ‘The Impact of Global Sourcing on the UK Economy 2003-2010’, by The Indian IT trade body National Association of Software and Service Companies (Nasscom) and Evalueserve, UK will face a massive skill shortage by the end of this decade. UK's ageing population and slow birth rate will leave the country short of 700,000 workers in health and social care, retailing and financial services by 2010.
The report predicts that around 272,000 jobs will be moved offshore by 2010, although around 19,000 consulting, legal and management jobs will be created as a result, leaving a net loss of approximately 253,000 jobs. Based on current UK unemployment trends 102,000 of those are likely to be out of work for more than six months and will require ‘substantial financial help, retraining and reallocation’.According to Evalueserve, IT, software development and call centre jobs will be hit the hardest, accounting for 213,000 of the jobs lost. But the report warns that the consequences of not following a ‘global sourcing’ policy will be much worse. It predicts that slow population growth and an ageing population will lead to a shortfall in the supply of domestic labour in the UK, with a demand-supply gap in the UK of 714,000 jobs by 2010, and IT will be one of the main sectors impacted. Immigration will fill around 372,000 of those positions but that would still leave a shortfall of 342,000.
The report further states that the total additional economic burden on the UK economy because of this unemployment and retraining cost will be GBP 5.7 billion. But the cost to UK by deciding not to offshore would be much higher at GBP 34 billion, due to a drop in output and a subsequent slowing of GDP growth.
Other benefits cited include increased competitiveness in the global economy of UK companies and an expansion of global markets for goods and services from the UK.
Marc Vollenweider, CEO, Evalueserve, said that offshoring will bring benefits to the UK economy through more profits for UK firms, and also to wider society in general. Vollenweider added that it would translate directly into more jobs for people and the long-term sustainability and competitiveness of the UK economy.
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