New Delhi, Oct. 9 (PTI): The US economy could lose growth opportunities worth $2 trillion due to a massive labour shortage by 2010, if it did not take appropriate measures like outsourcing and immigration to bridge this gap, a Nasscom report has said.
Cautioning the US market against ‘protectionism’, in the wake of an outcry over outsourcing to low-cost destinations like India, the Nasscom-eValueserve report forecasts a labour shortage of 5.6 million workers by 2010, a large chunk of which would be in high-tech areas.
This gap could be bridged through immigration of 3.2 million workers, and offshoring about 1.3 million jobs, the report said. India is strongly positioned to claim over 50 per cent of offshored work on the strength of its cost and language (English-speaking) advantages, it added.
“There will be a short-term impact on the US labour force. About 1.3 million jobs will move offshore between 2003-2010, impacting one million US workers,” said Marc Vollenweider, CEO of eValueserve, a business research and intellectual property service firm.
The remaining labour gap of 1.1 million workers would have to be bridged with temporary workers.
Forecasts for the US indicate an annual GDP growth of 3.20 per cent, which would lead to an increased demand for labour, the report said.
The report said that for every $100 of call centre work offshored by US firms, about $143 was invested back into the US economy in the form of repatriated profits, increased sales of telecom equipment and cost savings.
Similarly the amount invested back into the US economy was $133 for IT services and $142 for high-end knowledge services like equity research, underwriting, tax preparations and risk management.
“Offshoring of IT services has helped US workers move to specialised and creative roles while moving process-oriented programming to offshore locations. The proportion of specialists in the US infotech workforce increased to 74 per cent in 2002 from 38 per cent in 1983,” it said.
The report said that utilisation of offshore facilities resulted in the growth of the local economies and an increase in the disposable income leading to expansion of the global market for US goods and services.
“For instance, in India, the proportion of the consuming class in overall population expanded from 14 per cent to 30 per cent in 1990s and is set to reach 40 per cent in 2006-06. The Indian retail sector is expected to grow from $180 billion in 2003, to $300 billion in 2010,” it said.
The Nasscom report which highlights how the US economy would see significant benefits from global sourcing, is based on interviews of economists and offshoring experts world-wide.