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IT jobs contracted from far and wide

Globe and Mail Update

Having grown used to buying cars from Japan and South Korea and just about any imaginable consumer item from China, North Americans who work in computer-related fields are seeing some of their own jobs go to faraway places, notably India.

This has caused political rumblings in the United States but not yet in Canada, partly because Canada is at the top end of a cheap-labour pipe draining work from the world's biggest economy.

For the moment, Canada may be siphoning off as much from the United States as it loses to places such as India, where eager computer science graduates are available at a fraction of a Canadian salary.

The process has a name, offshoring, and two categories, nearshoring and farshoring. From the American point of view, anything beyond U.S. borders is offshore, but some locales, chiefly Canada and Ireland, are pitched to cautious clients as nearshore.

Others are farshore - India, China, the Philippines, Russia, even the beach-fringed island of Mauritius.

The work comes under the heading of information technology (everything from nurse-maiding old computer systems to writing code for new ones) and extends into business process outsourcing, in which contractors take over actual corporate functions such as tracking inventories, processing insurance claims and running customer call centres, all based on computers.

Like the Hollywood North film crews of Toronto and Vancouver, Canada's IT professionals look good to American companies because their pay is modest by U.S. standards (the figures are not much different but the dollars are Canadian), which does not mean they can't be replaced with cheaper workers elsewhere.

'We saw in the eighties and nineties the export of a significant amount of blue-collar work,' says Robert Fabian, a veteran Toronto outsourcing consultant. 'We're now seeing the export of a fair amount of white-collar work. As a white-collar worker I'm not very happy about that ..... and in some ways I'm thankful that I'm in my 60s and won't have to bear the full brunt of some of the changes. I'm not certain I would like to be in the shoes of some people just entering the labour market.'

The mood is no cheerier in the United States. Researchers at Gartner Inc. of Stamford, Conn., predicted 261/27 months ago that one in 10 jobs at U.S.-based IT service firms will go offshore by the end of next year. Forrester Research Inc. of Cambridge, Mass., last year projected a loss of 3.3 million U.S. service jobs of all types over 15 years.

An investigation by a U.S. congressional agency is under way and various state legislatures are considering bills to keep work at home, chiefly by blocking use of foreign workers on state contracts. (Politicians expressed shock to learn that help lines for welfare recipients in New Jersey, Missouri, North Carolina and elsewhere were answered in India.)

Although it has caught a lot of people off guard, offshoring is an extension of a well-known trend. Many companies and governments spent the late 20th century contracting out work to cut costs and shed employees - office cleaners, cafeteria staff, payroll clerks and computer programmers, to name a few.

Fortunes were made in computer services outsourcing, but the work generally stayed in the country. No longer. Now that fibre-optic cables gird the planet and satellites command the sky, anything that can be sent on a data link can be sourced almost anywhere, letting North American companies reach for the next level of savings.