Wednesday, November 10, 2004

Offshoring, Impact on US Jobs & Economy - Part I

posted by ShyK at 15:35

I have expressed my views on this topic in the past on other forums and this found this an easy subject to start of blogging on….

Any analysis of Offshoring’s Impact on US Economy necessitates analysis of

  • The Dollar Value of Off shoring IT
  • Job Availability in the US
  • Handling Job losses in the US
  • Impact of NOT Globalizing

Let’s visit these in detail over the next couple of days

The Numbers

  • US Software Spending (2004 forecast) - $234 Billion
  • US 'Applications' spending (2004 forecast) - $76 Billion
  • US 'Custom Software' spending (2004 forecast) - $17 Billion

India’s software revenues from US exports for the period Apr-03 to Mar-04 were a $6.3 Billion or less than 2% or total US software spending. In fact these revenues were way less than Walmart’s imports from China in 2003 ($12 billion).

So how big an impact on jobs can a 2% spending be?

I have conveniently ignored two factors

  • The outsourcing to other locations – China, East European countries and Canada.
  • The rapid rate of increase in outshoring.

But then, I believe that the former is yet in nascent state and the later may not lastg given the outcry against offshoring.

Additional Reading


- to be continued -

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