The study recommends the collection of more and better data on services trade and says more information should be extracted and published from current sources.

George Leopold, Contributor

October 9, 2006

2 Min Read

WASHINGTON — A report by a Massachusetts Institute of Technology study group reinforces the findings of previous studies that U.S. data collection on offshoring is flawed.

MIT's Industrial Performance Center concluded in a study released in September that the U.S. data system used to track offshoring in the services sector has "signficant gaps." The group recommended the collection of more and better data on services trade, which account for an estimated 85 percent of U.S. public sector gross domestic product and that more information should be extracted and published from current sources.

Overall, the offshoring of services has had little impact on U.S. employment. But the MIT study predicts that the effects of services offshoring will grow in specific industries and geographic areas. "This is why the collection and use of more detailed statistics are required," the study concluded.

Most government data on offshoring is collected by the Bureau of Labor Statistics and the Commerce Department's Bureau of Economic Analysis (BEA). The MIT study recommended that BEA collect more detailed data on international trade in services.

"The most severe defect in the United States' data collection system for services, by far, is in the realm of international trade," it warned.

It added that the bureau should expand its collection of data on occupational categories when surveying the activities of U.S.-based multinational companies.

The MIT study did not focus on specific industries like high-tech, but other studies have also concluded that U.S. data collection on the offshoring of technology services needs to be reviewed. The National Academy of Public Administration, which is following up on a July 2004 Commerce Department study on the offshoring of high-tech jobs, is expected to reach similar conclusions in a report to be released soon.

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