Off-shoring to India boosts UK employment, claims vague research - Nothing clear, it's all a bit of a blur

By Subhankar Kundu @ Friday, July 11, 2008 9:41 AM

Section - Outsourcing/Outsourcing

Research by economists at the University of Nottingham says that the outsourcing to India does not affect the employment scenario in India. The report further suggested that it rather helps in boosting employment in the UK.

The research contains many ambiguities and none of the writers get round to mentioning the reason for reaching such a conclusion. 

Several publications, including the IT Examiner, have reported the protest demonstration by British members of parliament (MPs) opposing the BBC’s plans to outsource Urdu and Hindi to their respective origin countries as it may cut a good number of jobs in the UK. The unions are not only active in India but also in the UK and have been opposing major UK companies off-shoring the jobs to India.

The director of the University’s Globalisation and Economic Policy centre (GEP), David Greenaway, said the picture is far more complex and much more positive of people fearing jobs losses because of outsourcing to these countries with cheaper labour like India and China.

Greenaway further emphasized on the efficiency factor as he believes the firms in UK outsource only a part of their production because of the efficiency. As a result, the productivity and turnover increases that lead the companies to flourish and recruit more employees in the UK itself.

The co-author of the research, Richard Kneller, called the outsourcing episode a myth as he refuses to believe that the jobs are outsourced to the Asian nations only for cheaper labour and says it also explodes another myth about off-shoring.

The GEP research says there are losers when off-shoring takes place through higher job turnover and people are unable to adapt to new skills. X 

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