Study Finds Offshorings Impact Overstated

The risk of losing high-end IT jobs to offshoring is lower than widely believed, argues a report released June 2 by American Sentinel University.

“Studies from consulting groups during the stagnant job growth years of 2002 to 2004 stoked very pessimistic views of the future for IT professionals,” Jeremy Leonard, chief economist at American Sentinel University, in Englewood, Colo., and author of the study, said in a statement.

“Once the current economic expansion took hold, however, we found that the 2000-02 job losses had little, if anything, to do with jobs moving overseas. Software engineers in particular saw a phenomenal turnaround in job fortunes, swinging from 4 percent decline to 25 percent growth.”

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Upon examining post-recession technology employment trends, the study, “Offshoring of Information-Technology Jobs: Myths and Realities,” found that IT offshoring was limited to occupations that are labor-intensive, easy to codify or require little face-to-face contact.

Domestic opportunities in these so-called “low-end” jobs, which include database administration, coding and support, have declined since 2002, with computer programming showing the biggest job losses.

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“High-end” jobs showed no signs of decline, with the study finding them to have a growth rate comparable to that of the boom years of the late 1990s. This category includes jobs that require an advanced degree in computer science or information systems, as well as an understanding of management and business processes.

Of the high-end jobs that have grown in value, network systems and data communication analysts have seen the most IT employment growth since 2002, followed by computer software engineers, computer and information scientists, and computer systems analysts.

The study concluded that the choice to move activities offshore involves more than the search for cheap labor, although that is considered a primary rationale. Factors such as whether the job can be easily codified into simple instructions are also considered. As a result, according to the study, low-end, easily duplicated jobs will continue to migrate offshore, but there is little direct risk for those in the high-end IT fields.

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