US gets more BPO work, says US commerce dept

US commerce department data quoted in a news article in The Wall Street Journal show that a lot more work is being outsourced to the US in comparison with other countries like India.

The Journal said last Friday, the US commerce department released data saying "US exports of legal work, computer programming, telecommunications, banking, engineering, management consulting and other private services jumped to $131.01 billion in 2003 from $8.42 billion in the previous year."

In comparison, the value of work outsourced by the US to other countries was over 40 per cent less. In 2003, the US outsourced work worth $77.38 billion, $7.94 billion higher than that in 2002.

So, while US politicians are in favour of imposing restrictions on US jobs being exported overseas, the country is actually making a surplus of $53.64 billion on outsourcing.

However, while outsourcing to the US grew by under 7 per cent in 2003, outsourcing by the country grew 11.43 per cent. But as the Journal points out, if US efforts on curbing outsourcing provoke a retaliation, the country would lose more, both in terms of the surplus that it enjoys on outsourcing as well as the competitive edge its industries get by outsourcing to cheaper locations.

A McKinsey study for the National Association of Software and Service Companies had calculated a few months ago that for every dollar of work outsourced to India, the US gains more in terms of not just cost savings, but even in terms of telecom and other equipment bought from US firms by Indian development centres.

The Journal also quoted the commerce department as saying "in addition to hiring more US businesses to provide services, foreigners doubled last year the amount of money invested in US companies, plants, offices, stores and other facilities. Foreign direct investment swelled to $81.98 billion in 2003, from $39.63 billion in 2002".