Offshoring reaches "tipping point," says UN
The United Nations (UN) is central to "global efforts to solve problems that challenge humanity." The time has come for it to air its views on the global issue that is offshore outsourcing.
The UN Conference on Trade and Development (UNCTAD) warned that protectionism is a "short sighted" reaction to the trend.
The 2004 World Investment Report said that of the 1,000 largest companies in the world, some 70% have not outsourced to lower cost countries.
The report mentioned that 50% of telephone customer service work shifted overseas went to developing countries in 2002 and 2003.
The UNCTAD said that by contracting offshore labor, developed countries provide the foreign direct investment (FDI) badly needed by developing countries.
Another interesting thing pointed out in this article is that developed nations take on a lot of offshore outsourcing jobs as well.
However, UNCTAD estimated that investment in offshore "business processing" would expand from 1.3 billion dollars in 2002 to 24 billion dollars by 2007, although it would not necessarily all flow to developing countries.
"This is essentially a north-north phenomenon. There is a myth that essentially offshoring is done to developing countries, this is not true," said Carlos Fortin, the agency's deputy secretary general.
"Most of the offshoring in the world takes place among developed countries and privileged locations are Ireland, Canada and Israel," he told journalists.
UNCTAD emphasized that offshoring is still in its early stages. It countered the idea that offshoring was responsible for job losses in the United States and western Europe.
related stories, by category:
