Fears that an exodus of white-collar jobs to India and other low-wage economies will lead to massive employment losses in rich countries are not backed up by the facts, according to new research.
In a working paper for the US National Bureau of Economic Research, two International Monetary Fund (IMF) staffers discover no evidence that job growth in Britain is slower in those sectors with a quicker pace of service outsourcing.
They also find no link between job losses and outsourcing in the United States because outsourcing, by boosting firms' efficiency, creates enough new jobs to offset the initial losses.
"The risk of service outsourcing dramatically reducing job growth in the advanced economies has been greatly exaggerated," IMF researchers Ms Mary Amiti and Mr Shang-Jin Wei write.
Their findings echo similarly positive assessments by analysts including Ms Diana Farrell of McKinsey Global Institute in San Francisco and Ms Catherine Mann of the Institute for International Economics in Washington.
Although outsourcing has been increasing steadily, Ms Amiti and Mr Wei say it is still at very low levels.
In balance-of-payments statistics, outsourced services count as imports. In the United States, such imports of computing and business services have roughly doubled since 1993 thanks to the growth of fast, cheap telecommunications but were still only 0.4 per cent of gross domestic product in 2003.
In Britain, the share was 1.2 per cent. Outsourcing as a share of GDP is much more important in smaller countries. Angola, Mozambique and Ireland all import business services exceeding 10 per cent of GDP.
Ironically, India also imports a larger share of business services (2.4 per cent of GDP) than the United States or Britain.
"In sum, the notion that large industrialised countries outsource more intensely than other economies is not supported by the trade data," Ms Amiti and Mr Wei write.