Parliamentary committee to consider how offshoring affects IT
jobs.
Many IT staff in the UK who believe they have lost their
livelihoods because of IT work moving offshore to countries such as
India plan to make their voices heard in 2004.
One such activist is Maldwyn Palmer, an experienced IT professional
in his fifties who is struggling to find work. Palmer formed Stop
Offshore Outsourcing Now in the autumn of 2003. "Our aim is to
raise the issue and persuade some MPs to take up our case. Our
objective is to stop the outflow of IT and other jobs," he
said.
"The campaign is purely grass-roots, was started by myself and
involves a loose collection of like-minded IT professionals who see
their future under threat."
Palmer said he and his colleagues would build links with other
affected workers and relevant unions to take the issue forward.
Palmer has persuaded his local Bournemouth MPs Peter Lilley and
Robert Key to put his concerns to trade and industry secretary
Patricia Hewitt.
If action is not taken, "this country will lose its expertise in
software and hardware technology", he warned.
Where tomorrow's highly skilled jobs will come from is on the
agenda of the House of Commons Trade & Industry Select
Committee. It is due to meet later this year to consider this and
other related issues and has received submissions from IT groups
the Professional Contractors Group (PCG) and Shout99.
The select committee will respond to a December 1998 government
white paper "Building the Knowledge Driven Economy", which
contained 75 commitments by government designed to reduce the
performance gap between the UK and its competitors, and to measure
progress towards that goal.
Challenges identified in the white paper included increased
competition from low-cost economies using new technologies, highly
skilled workforces and mobile capital; and the development of
science and knowledge bases to underpin the new technologies
available to industry.
Losing skills
David Ramsden, who lobbies parliament on behalf of the PCG, said
the group's submission focused on the dangers to the UK economy of
losing IT skills and of a fall in IT skills training. It also
highlighted that offshoring is not necessarily an efficient,
low-cost option, backed by a case study.
"It is not about PCG members whingeing about outsourcing," said
Ramsden. "The government wants the UK to be a lead nation in IT.
But offshoring and a decline in training point to the government
being unlikely to meet those goals."
Ramsden said the PCG also believed consumer pressure would hinder
the growth of offshoring - a view shared by the UK's largest
manufacturing union, Amicus, and the Communication Workers
Union.
Shout99, an online IT contractors' pressure group, also submitted
its views to the select committee last November. It called on MPs
on the committee to focus on offshoring and fast-track visas.
"By exporting jobs and sectors of the knowledge-based economy the
UK is removing much of its ability to compete in a global economy
by exporting its requirements for a skills base and removing
incentives to train, work in and develop the UK's own technological
industry," said the Shout99 submission.
Shout99 also wants a crackdown on abuse of the work permit system.
It believes many employers bring in low-cost IT labour on
intra-company transfer schemes and breach work permit
regulations.
Protectionism
Last week, in a signal that offshoring is high on the political
agenda, Hewitt met representatives of organisations which have an
interest in outsourcing. The pro-outsourcing firms included HSBC
and Deloitte and Touche and the anti-outsourcing view was put
forward by six unions, including Amicus. Hewitt ruled out
protectionist measures, stressing that trade with India was worth
£2.5bn to the UK economy. Some of those present pressed for more
research into the impact of offshoring on the UK economy.
A government review into the impact of offshoring on the call
centre industry will be published this spring.
The prime minister is also anti-protectionism. Last November Tony
Blair told the CBI conference, "I cannot shield you from the world.
The economy out there will be decided by knowledge, skills and
education, by value-added goods and services."
This is why Amicus' anti-offshoring campaign "Leading Edge of the
Bleeding Edge" is not focused on lobbying MPs.
"The prime minister said we just have to live with it," said
campaign organiser Lee Whitehill. "It shows Tony Blair has lost the
common touch."
Amicus aims to bring offshoring to the public's attention and to
get the DTI to set up a forum to assess what the UK economy will
look like in 10 years' time, and the skills and training that will
be needed.
Consumer concern
Amicus said research into public attitudes to offshoring undertaken
last summer, indicated consumer concern. Some 63% of respondents
said they would take offshoring into account when making purchasing
decisions, and 85% said they were worried about the protection of
information which had been stored offshore.
"We recognise offshoring is inevitable," said Whitehill. "We want
to mitigate against its negative aspects by looking at developing
the skills we will need as the process unfolds."
It is hard to believe that, in a free trade environment, offshoring
can be stopped. But should the IT jobs outflow turn into a flood,
it is likely that opposition to offshoring will rise and be a force
to reckon with.
Ominously, environmental campaigner and writer George Monbiot
predicted, "If you live in a rich nation in the English-speaking
world and most of your work involves a computer or telephone, do
not expect to have a job in five years' time."
The state of the industry
- Amicus claims 1,000 UK jobs a week are lost to off-shoring and
believes 200,000 UK jobs, especially in IT support, are at risk l
Analyst firm Deloitte Research predicts two million jobs will be
outsourced from Western economies to India by 2008
- According to Gartner, India has 90% of total offshore revenues,
though China and Russia are making inroads
- The total number of IT jobs in the UK is rising. The Office of
National Statistics said there were 507,300 jobs in the computer
and related activities category in June 2003. The figures for 2002
and 2001 were 502,600 and 502,300 respectively
- Unemployment rates for the ONS' associated professional and
technical category was 2.3% in summer 2003, compared to a national
unemployment rate of 5%
- The unemployment rate for recent UK IT graduates is 14.6%,
according to the November 2003 What Do Graduates Do report - the
highest of all categories measured
- Annual salaries for Indian IT staff range from £1,200 to
£2,500.