The study comes amid a searing political debate on the effect of outsourcing on the U.S. labor market.
The study echoed other surveys that show a sharp rise in moving high-tech service jobs overseas. It projected that offshore spending for computer software and services will grow at a compound annual rate of almost 26 percent from about $10 billion in 2003 to $31 billion in 2008. The savings from the use of offshore resources are estimated to grow from $6.7 billion to $20.9 billion.
On the issue of jobs, the study suggested that there is a net gain in the United States, even as many functions are moved offshore.
While 104,000 jobs in IT sector were moved offshore last year, the study found that the incremental economic activity that follows offshore IT outsourcing created more than 90,000 net new jobs in the U.S. in 2003, and is expected to create 317,000 net new jobs in 2008.
“While global IT software and service outsourcing displaces some IT workers, total employment in the United States increases as the benefits ripple through the economy,” according to the study.
The findings also fly in the face of critics who argue moving jobs offshore cuts wages for U.S. workers.
“Offshore outsourcing actually increases average real wages of U.S. workers,” the study said. “With lower inflation and higher productivity, real wages were 0.13 percent higher in 2003 and are expected to be 0.44 percent higher in 2008.”
Workers are Confused Over Their Employers’ Strategic Direction
Most organizations suffer from major “execution gaps,” which undermine the achievement of their most critical, strategic goals, according to a survey conducted by FranklinCovey.
Less than half (48 percent) of workers said their organization has a clear strategic direction and only 37 percent said they understand the reason for that strategic direction. Fifty-four percent of workers said they clearly understand what they are supposed to do to help achieve their organization’s goals.
“The most fundamental business issue facing organizations today is execution — whether an organization achieves its goals,” said Stephen Covey, vice chairman of FranklinCovey. “There is serious misalignment between the daily activities of the frontline worker and the organizational strategy. The top priority of every executive should be to clarify, communicate and assist workers in achieving their organization’s critical goals.”
More than 12,000 workers, representing executives, managers and frontline workers across 18 industries, were surveyed for the report.
Corporate America Strengthens Security
American companies are better prepared to deal with security threats, according to a survey released by the Business Roundtable.
Nearly every company in the survey reported that it has increased physical security, and all have strengthened cyber security since the September 2001 terrorist attacks. About 97 percent said they have updated their emergency response plans since that date.
“Companies are strengthening the resiliency of the nation’s critical infrastructures, increasing investments in physical and cyber security, improving crisis communications and developing more extensive emergency response plans,” said C. Michael Armstrong, chairman of the Roundtable’s security task force and chairman of Comcast.
In other findings:
* Forty percent of the respondents said they test their emergency response plan at least twice a year and nearly 90 percent test it at least annually.
* Nearly 90 percent of CEO respondents said they devote more time and attention to security since September 2001.
The survey was sent to the 150 CEOs who comprise the Washington, D.C.,-based business organization. One hundred responded.
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