LONDON, July 6 /PRNewswire/ --



The fear of large numbers of high quality jobs being outsourced to 
rapidly developing countries such as India is overstated, says a new report
published today by The Work Foundation.

Despite the rhetoric of an abundance of Indian knowledge workers hungry
for British jobs there is little direct evidence so far of significant job
migration, while trade in information and communications services with
developed countries such as Germany dwarfs that with India.

The report finds:

- According to independent analysis just 5.5 percent of all jobs lost
across Europe were due to off-shoring activities in the first quarter of
2007(i). In 2005 the figure was 3.4 percent. Meanwhile jobs in sectors
theoretically vulnerable to outsourcing such as call centres have gone up
rather than down in the UK.

- Travel (GBP626 million) and transportation (GBP289 million) are the
largest services imported from India while computer and information
services (GBP122 million) are only the third largest import category(ii).

- The UK imports almost four times more computer and information
services and over sixteen times more business services from Germany than
from India. India ranks fifteenth on the list of countries from which the
UK imports services.

- The paper finds that labour costs are only one factor in decisions
regarding business location. Cultural contexts, in particular the
advantage for producers in being located near to key target markets,
remains critically important for successful organisations.

Katerina RÃŒdiger, author of the paper - 'Offshoring, a threat for the 
UK's knowledge jobs?' - said: 'If you go to an Indian business district you
could be forgiven for thinking the whole world is chucking work and jobs
at India because of it's magical high-skill, low-wage mix. India's high
tech sector is indeed booming, but is not 'coming for our lunch' as some
of the more apocalyptic commentators have suggested.

'The evidence suggests that while trade in services between the UK and
India is certainly rising, it is not happening nearly as fast as is
sometimes imagined - an increase from 0.4 per cent to 1.2 per cent between
1995 and 2004 - less of an explosion more of a slow evolution. Technology
has always led to people being displaced from some lines of work into
others, but what is not happening is a straightforward jobs migration from
North to South, West to East.'

Over recent years, the debate about offshore outsourcing has taken on an
alarmist tone amid anxiety that lawyers, medical professionals, software
designers, actuaries and chartered surveyors were all potential victims of
outsourcing. The report argues that self serving claims from consultancies
and aggressive PR from outsourcing companies themselves has tended to
drown out the careful analysis of data regarding off-shoring.

Rather than a clearly defined trend of western multinationals off-shoring
to save money on labour costs, the report argues that increasingly
companies are mixing business models, combining near-shoring, off-shoring
and retaining operations close to home. Cultural difference remains a
critical component of business models. Meanwhile, successful Indian
companies are beginning to set up offices and are targeting affluent
western consumers.

Countries that outsource most also tend to be the recipients of most
outsourcing. The top recipients of outsourcing are rich, industrialised
countries rather than poor, developing ones.

Notes to Editors

1.'Off-shoring, a threat for the UK's knowledge jobs?: Globalisation
and the extent and impact of off-shore outsourcing' is available from the
Work Foundation, Katerina RÃŒdiger and Ian Brinkley, director of the
knowledge economy programme are available for interview.

2.(i) During the first quarter in 2007, the European Restructuring
Monitor (a service set up by the European Foundation For The Improvement
of Living and Working Conditions) recorded 420 restructuring cases in
Europe. These cases announced 132,762 job losses and 184,511 job gains.
Only 5.5 percent of all jobs lost were lost due to off-shoring. For the
year 2005 the percentage of jobs lost due to off-shoring was 3.4 percent
of the total jobs lost.

3. (ii) According to figures for 2005 in the National Accounts 'Pink
Book'.

4. The Work Foundation is an independent research organisation and
consultancy.