British firms have outsourced 400,000 jobs

British firms have outsourced 400,000 jobs

Tuesday, 09 November 2004, 08:00 Hrs
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BIRMINGHAM: With British companies having created about 400,000 jobs overseas over the last decade, the head of Britain's largest employers' organisation said the day would come "very shortly" when there "won't be work for unskilled people".

Digby Jones, director general of the Confederation of British Industry (CBI), said the British government urgently needed to boost skill levels to ensure the economy continued to create more jobs than it lost overseas.

Speaking before the CBI's national conference here, Jones made a robust defence of globalisation and outsourcing, saying it boosted productivity and profits, enabling companies to create better-paid highly skilled jobs.

According to a survey carried out by the CBI, firms were increasingly moving overseas service functions such as R&D, IT, financial services, accounts and human resources.

"The day will come very shortly when there won't be work for unskilled people, I would say within the next 10 years," Jones said. "This is coming down the track and certainly within a scholastic generation."

"Offshoring means greater productivity and more efficient goods and services. It also means UK jobs will be of higher quality, more skilled and in many cases more secure."

In the survey of 150 firms, more than half said the pressure to move jobs abroad had increased in the last two years.

The survey showed red tape was a growing reason for outsourcing. Jones said the rising cost of compliance with regulations was "starting to drive firms abroad".

But Jones conceded that bureaucracy in countries such as India was immensely more complex than in Britain.

A third of those surveyed said they had already moved some activities overseas and almost a quarter said they were considering doing so in the future. Of those who had taken the step, almost 90 percent said it had been successful.

The vast majority, more than 9 out of 10, said the move was designed to cut costs, with the bulk of the outsourcing involving manufacturing jobs.

Ian McCafferty, the CBI's chief economic adviser, said UK companies had created roughly 400,000 jobs overseas over the last decade. He said this had led to 250,000 job losses in Britain, but that half a million jobs had been created over the same period.

"It is short-sighted simply to see this as a bad thing," Jones said.

He said the 3.5 million people who were functionally illiterate in Britain would find it impossible to get work within 10 years.

"We have to equip these people," he said. "We need something done urgently at the secondary level and something urgent done for the workforce so that businesses can be socially inclusive."

Source: IANS
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