Offshore outsourcing: Little effect on US jobs?

The U.S. IT industry will continue to thrive even with offshore outsourcing, because its IT industry continues to be the most innovative, said Jeff Lande, vice president of the IT Services Division at the Information Technology Association of America. Offshore outsourcing does not mean a "zero sum game," with every job created overseas equaling a lost U.S. job, he said.

"We're not going to win this battle over wages," Lande said. "This is going to be a battle over innovation and quality. The U.S. IT workers are the best in the world, and they're going to continue to be the best."

A study released by Forrester Research Inc. in November predicted 3.3 million U.S. jobs in the service industries would move overseas by 2015, but Lande noted that less than 1 million of those were predicted to be IT jobs. The IT industry should grow in 2004, meaning more U.S. jobs, he said. And with the baby boomer generation closing in on retirement, the U.S. should have a shortage, not a surplus, of skilled workers in the next 15 years, he said.

With pressure from stockholders to keep costs low, efforts to stall offshore outsourcing could harm U.S. businesses, said Rolf Lundberg, senior vice president of congressional affairs for the United States Chamber of Commerce. Efforts in eight states and among some members of the U.S. Congress to prohibit government contracts from being fulfilled by foreign workers will, in the long run, hurt the U.S. by driving up the cost of those government contracts and discouraging other countries from buying U.S. products, he said.

Instead of "protectionist" policies, the U.S. government should work on ways to cut health-care costs and limit the number of lawsuits against U.S. companies, Lundberg said.

Lundberg defended offshore outsourcing by saying the money savings will pump up the bottom lines of U.S. companies. "Savings are passed on to consumers," he said. "Dividends are passed on to shareholders."

But Robert Atkinson, senior vice president of the Progressive Policy Institute, disagreed with predictions of worker shortages, saying fewer U.S. workers will mean less demand for products produced in the U.S. "You know what happens when jobs level off -- demand levels off," he said.

Instead of worrying about numbers of workers, or trying to pass laws against offshore outsourcing, the U.S. government should develop a national policy to grow the IT sector by using it to improve the country's transportation, criminal justice or health-care systems, Atkinson said. The positive result of a national debate over offshore outsourcing, which he predicted would be a 2004 election issue, could be a change in the national attitude about priorities such as using IT to improve those services, he said.

"We need to grow the IT economy," he said. "We could really have some big national goals."