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Mr Marc Vollenweider, CEO, Evalueserve, addressing a press conference in the Capital on Thursday. - Ramesh Sharma

New Delhi , Oct. 9

IT could well come as a bonanza for India's service industry. The huge labour shortage of 5.6 million workers in the US by 2010 is likely to result in 1.3 million jobs being outsourced. And India stands to gain.

According to a Nasscom-Evalueserve report on `Impact of Global Sourcing on the US Economy, 2003-2010', in the next seven years more than 50 per cent of the jobs would be outsourced to India. And some of the main areas include BPOs, health and some high-end knowledge services such as equity research, underwriting, tax preparation and risk management.

Mr Marc Vollenweider, CEO, Evalueserve, "Of the 1.3 million jobs that will be outsourced by US more than half of them can come to India. The country is well positioned to take advantage of the offshoring opportunity as compared to rivals like China, East Europe, South Africa and Philippines because it can offer entire range of BPO services, has a large base of English-speaking population and lower costs."

Elaborating on the issue, Mr Vollenweider said that of the 1.3-million jobs to be offshored, 0.97 million would be in the IT sector and of the remaining the health sector would form a major portion.

The report indicated that the demand for labour in the US would be 150.2 million, of which 144.6 million will come domestically, 3.2 million through immigration and 1.3 million demand will have to be filled by outsourcing. Despite all this there will still be a gap of 1.1 million between supply and demand. "Forecasts for the US indicate an annual GDP growth of 3.20 per cent, which could lead to an increased demand of labour. However, the US will face a domestic shortfall of 5.6 million by 2010 due to an aging population, which can potentially cost the US economy $2 trillion if appropriate measures are not taken," indicated the report.

The study also makes a strong case for outsourcing. It said that for every $100 offshored, the direct financial benefits could be between $130 and $145. "For every $100 of call centre work offshored by US firms, $143 is invested back into the US economy in the form of repatriated profits, increased sales of telecom equipment and cost-savings," it said.

Mr Vollenweider said that though offshoring could lead to lay-offs in the US economy, its effects are exaggerated. Of the 100 people rendered surplus by offshoring, 25 are re-employed in the same company and for every 100 jobs offshored 50 new ones are created in the US to maintain offshoring. Of the 69 per cent who go out of the job market find a new job within three months. Twenty-two per cent finds a job within three to 12 months and only nine per cent takes more than a year to find a new job.

"Those who take more than three months to find a new job need to be retrained and US economy has enough flexibility and capability to handle this retraining requirement. As it is between 1993 and 2002 the US economy has reallocated eight million jobs every quarter," Mr Vollenweider said.

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