30% Of Tech Jobs At Risk From Offshoring, Gartner Says

The number of I.T. jobs outsourced to low-cost countries such as India and China is a trickle compared with what's coming in the next 10 years, according to a report from research firm Gartner.

Less than 5% of IT jobs in the United States and other developed countries are sent offshore, the research firm says. That number will rise to 30% by 2015. "It's a tectonic shift," says Gartner analyst Frances Karamouzis, author of the report, which will be released this week at Gartner's outsourcing conference in Los Angeles.

Despite the magnitude of the shift, Karamouzis says she doesn't believe offshoring will result in a net loss of U.S. IT jobs. "There are a lot of people who are currently programmers who could transition to higher-level positions where you need to be close to the customer," she says.

Other observers see a similar shift occurring but believe the process will take longer. Cindy Shaw, an analyst at Moors & Cabot, says she believes 30% of IT jobs will ultimately move offshore, "but it's going to take 20 to 25 years, not 10," she says. Last year, Forrester Research analyst John McCarthy said 3.4 million U.S. services jobs--including a number of IT-related positions--would move offshore by 2015.

The rush to send IT work offshore also will result in an outflow of dollars from the United States and other Western countries over the next five years, Gartner says. Worldwide spending on offshore research and development and engineering will increase by a whopping 860%, from $1.25 billion in 2004 to as much as $12 billion in 2010, Gartner predicts. Offshore spending on infrastructure outsourcing will grow from between $100 million and $250 million to between $3 billion and $4 billion over the same period. Offshore spending on application-development services will more than double from $23 billion to as much as $50 billion.

Yet automation and productivity gains--not offshore outsourcing--are the greatest threat to IT jobs in the West, Karamouzis says. She predicts the effect of those factors on IT job displacement will be six times greater than the impact of offshoring by 2015.

And it's not just the rank-and-file technology workers who need to worry about their careers. Multinationals could soon be looking to emerging markets for CIOs and even CEOs, Karamouzis says. Gartner predicts that by 2015, 30% of the world's top CEOs will be from countries other than the United States.