Urenio Watch Watch: Knowledge Economy

Globalisation and Offshoring

globalisation-and-relocalisation1.jpgFoundation Focus (May 2008) brings some interesting data on globalisation, offshoring  and job loses. Based on the European Restructuring Monitor (ERM) research on restructuring trends in Europe during 2003-06, the article argues that offshoring accounted for 10% of cases of restructuring involving job loss (356 out of 3,475 cases in 2003’“6) and 8% of announced job losses.

globalisation-and-relocalisation.jpg  Job loses: “Total jobs offshored and captured by the ERM amounted to just less than 200,000 jobs over the four-year period and there was no indication of an increase in offshoring over the period’.

 Geography: “There was considerable variation among countries. It accounted for around 25% of total job loss in Portugal and Ireland and less than 5% in the Netherlands and Belgium”.

Sectors: “The jobs offshored from EU15 are largely in the medium to high-tech sectors. The sector accounting for the highest proportion of EU jobs lost through offshoring (one in four of the total) was banking and insurance, a service sector with a generally high-skill profile. Relatively few of the jobs lost from offshoring were in more basic industries such as textiles and clothing’. “Around 50% of offshoring job losses are in the automobile sector in Germany and Portugal, over 30% of are in electrical machinery in Finland while 60% of UK offshoring job losses are in banking and insurance.’

Destination: “The main destination of offshored jobs from EU15 is either Asia or the new Member States with broadly equal numbers going to each area. However, there are, again, differences between Member States. 85% of UK jobs   offshored were relocated to Asia, mainly to India, while a similar percentage of German jobs offshored were relocated to the new Member States. A majority of service sector jobs have been offshored to Asia while manufacturing jobs are overwhelmingly offshored to the new Member States’.

Source: Small world, Foundation Focus,Issue 5, May 2008