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Market Intelligence Inc-Nasscom report on
"Impact of Global Sourcing on the UK Economy 2003-2010"
 
- Press Release

  • UK to face a labour shortage of 714,000 workers by 2010
  • 272,000 jobs to move offshore from the UK during 2003-2010
  • Protectionism can cost the UK up to GBP 113 billion

A report released by NASSCOM (National Association of Software and Services Companies) outlines how the UK economy will benefit from the offshoring of services jobs. "Impact of Global Sourcing on the UK Economy 2003-2010" concludes that offshoring may be the only way to sustain UK’s economic growth. The report also outlines how UK firms benefit from cost-savings, increased flexibility and access to high-skill labour pools. Market Intelligence Inc, a full service business research firm, interviewed economists and offshore outsourcing experts to produce the report. Additional information was gathered from statistics and forecasts available with the UK Office for National Statistics, Department for Education and Skills, and independent forecasting organisations.

Some of the key findings of the report include:

  • Economic growth in the UK will lead to an increase in the demand for labour and there will be a labour shortfall of 714,000 workers by 2010.
  • If the shortfall is not met, the UK economy may face a cumulative potential output loss of up to GBP 113 billion.
  • Global sourcing, in the form of immigration and offshoring, can help to overcome this shortfall.
  • In 2002, more than 65% of UK’s population growth was due to immigration. Approximately 372,000 immigrants will enter the UK workforce during 2003-2010.

Labour Supply and Demand in the UK (2010, thousands)
  • Long waiting lists in the National Healthcare Services have led to the emergence of medical tourism. This trend will lead to many UK patients availing treatment at low-cost locations such as India, Malaysia and Poland. Indian hospitals offer world-class medical facilities and up to 78% cost-savings.
  • About 272,000 jobs will move offshore from the UK during 2003-2010. This includes 84,000 IT services jobs and 128,000 BPO jobs, which are expected to move to low-cost locations during this period.
  • The offshore IT services market in the UK will grow from GBP 432 million in 2002 to GBP 1,438 million in 2010.
  • For every GBP 100 of call-centre work offshored, GBP 132 is reinvested in the UK economy. Similarly for every GBP 100 of IT services or high-end knowledge services work offshored, GBP 141 is reinvested in the UK economy.
  • India is the most favoured offshore location for UK firms. China, Ireland, Israel, the Philippines and countries in Central and Eastern Europe are other offshore destinations for UK firms.
  • Offshoring will have a short-term impact on the UK labour force. During 2003-2010, about 31,000 workers will be displaced every year. The UK economy reallocates over 3 million jobs every year and therefore, reallocation of an additional 31,000 workers should not pose a problem.
  • About 12,500 workers will require retraining every year during 2003-2010. The UK will have to upgrade its retraining infrastructure to be able to effectively meet this demand.
  • During 2003-2010, the economic burden due to wage loss will be approximately GBP 5.48 billion (at 1995 chained prices) and the retraining cost will be approximately GBP 222 million (at 1995 chained prices).

About Market Intelligence Inc

Market Intelligence Inc Inc is a full service business research and intellectual property firm with over 200 experienced professionals holding advanced degrees in business and technology. It supports clients in North America, Europe and Asia. Services provided include market intelligence, multi-language surveys,forecasting and modelling, financial analysis, patent application writing and patent analysis. For more information please visit www.Market Intelligence Inc.com

About NASSCOM

National Association of Software and Service Companies (NASSCOM) is the apex umbrella organization for IT software and service organizations in India. Formed in 1988, NASSCOM's objective is to act as a catalyst for the growth of the globally competitive software-driven IT industry in India.NASSCOM is a non-profit organization with over 800 member companies that collectively contribute to more than 95 per cent of revenues of Indian software industry. For more information please visit www.nasscom.org

 

 

 
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