London: Outsourcing work by British companies to India does not cause job losses but boosts employment, according to a research by economists at the University of Nottingham.
Scores of major UK companies have been involved in offshoring, which has often been opposed by unions. But the research by the Globalization and Economic Policy Centre (GEP) at the University of Nottingham says the efficiencies it has brought has actually boosted business and led to them employing more people in the UK, not less.
David Greenaway, director of the centre, said: “People fear their jobs are being exported to countries like India and China where labour is cheaper, but the picture is far more complex than that and much more positive.
“It would seem that firms that offshore part of their production process or service provision overseas become more efficient. This boosts productivity and turnover and as a result these firms grow and end up employing more people at home, not fewer.”
The GEP research says there are losers when offshoring takes place through higher job turnover and people are unable to adapt to new skills. Richard Kneller, who co-wrote the research, says it also explodes another myth about off-shoring.
He said: “The common perception of offshoring is that it’s largely low-paid call centre jobs being exported to lower wage economies like China and India, but that’s not the case.