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U.K.'s Tony Blair Says 'Cheers' To Outsourcing

The United Kingdom's recent experience with outsourcing shows that the practice is just another form of trade between two countries and, in the long run, trade is always a good thing. Although a growing number of U.K. businesses are moving IT jobs offshore to the usual places--India, Eastern Europe, and Russia--IT employment in the country is increasing.
The United Kingdom's recent experience with outsourcing shows that the practice is just another form of trade between two countries and, in the long run, trade is always a good thing. Although a growing number of U.K. businesses are moving IT jobs offshore to the usual places--India, Eastern Europe, and Russia--IT employment in the country is increasing.Last week, the United Kingdom's Office of National Statistics said IT employment in the country is up 9% in the past year. Part of the reason: Even as U.K. firms move jobs offshore, the foreign vendors they hire are establishing operations in the United Kingdom. "The U.K. currently gains from the increasing trend in trade of IT-enabled services and hence offshore outsourcing. Its imports may have increased, but its exports have increased just as fast," says the Office of National Statistics report.

As offshore IT vendors grow and become global players in their own right, they're finding it increasingly necessary to hire in the West to better serve their foreign customers and provide the same level of on-site care as their Western competitors. Last week, India's HCL Technologies said it would hire 600 new help-desk workers in Northern Ireland. Last year, Tata Consultancy Services revealed plans to open offices in several U.S. locations.

HCL's announcement came as U.K. Prime Minister Tony Blair toured India on a trade mission. Blair believes outsourcing will ultimately help his country's economy. "Companies have used relocation of call centers and used outsourcing in order to build a more effective structure," Blair said. That benefits not just "the places to which the work is outsourced, but also the companies and people in the U.K. and Europe."

The United States similarly is benefiting from outsourcing. IT employment in the country is on the rise partly because offshore firms are setting up local offices for the same reason HCL opened space in Northern Ireland--to get closer to their customers. Additionally, U.S. companies that have offshored low-level IT jobs are now hiring higher-level workers as they're able to invest more in strategic IT projects and less on blocking and tackling.

As Blair put it, "If we manage to embrace globalization, if we manage its consequences, both sides will benefit." That's as true for the United States as it is for the United Kingdom.