Offshoring IT work benefits economy, report says
|
Bookmark and Share
Nov 26, 2014  |  Vote 0    0

Offshoring IT work benefits economy, report says

Canada’s economy benefitted by $15 billion from the controversial practice of offshoring IT work, a study by IDC Canada says.

OurWindsor.Ca

The controversial practice of contracting out information technology jobs to other countries has been a benefit to the Canadian economy, a report by the tech research firm IDC Canada has concluded.

IT offshoring has contributed $15 billion to the Canadian economy since the start of the millennium, mostly in the form of cost-savings for employers, IDC said in a report released Tuesday.

The practice has also cost Canadians 12,800 in lost jobs and $4 billion in wages during that time frame, the report found, a much lower than expected figure.

“This has been an overwhelmingly positive thing for the Canadian economy,” Mark Schrutt, research vice-president at IDC Canada, said in a telephone interview. “This doesn’t mean it hasn’t had a negative impact on workers. Obviously, nearly 13,000 displaced people were unable to find work or decided not to try to find work in the IT marketplace.”

The study, called The Economic Impact of IT Offshoring on Canada: An Executive Viewpoint, is the first to attempt to quantify the trend’s impact on the economy.

Compared to the figures some people were “throwing around” during the controversy over the Royal Bank of Canada’s use of temporary foreign workers as part of an offshoring plan in May 2013, the overall impact on Canadian IT jobs is relatively low, Schrutt said.

“Some people were talking about IT offshoring costing Canada 60,000 IT jobs, 80,000 jobs, 100,000 jobs,” he said. “We wanted to put some facts out there.”

The study also addressed concerns the migration of mainly entry level jobs to countries like India and the Ukraine was “hollowing out” the IT industry in Canada, he said.

It concluded that was not the case. “IT offshoring is a very, very small fraction of overall IT employment in Canada,” Schrutt said.

Some 580,000 people were employed in IT jobs in 2013, according to Statistics Canada.

The unemployment rate among IT workers in Canada is also low, at around 1-2 per cent, Schrutt said.

The move to offshore IT work will continue to grow, IDC predicts, though at a slower rate. It had been growing 20 to 30 per cent a year, but is now below 20 per cent, he said.

That’s partly because most of the work that can be offshored has already been moved out of the country, he said.

However, the report predicts the impact of IT offshoring on Canada’s economy will have grown to an estimated $24 billion by 2018.

An additional 4,450 jobs will be lost, the report estimates.

Toronto Star

|
Bookmark and Share

(2) Comment

By StatusQuoContinues | NOVEMBER 26, 2014 11:37 AM
It's a real simple solution boys and girl - If you want to sell in the Canadian market you must manufacture/assemble your product here. Those who choose NOT TO can pay an import duty of 30%. Those who employ workers outside Canada pay a 30% terriff/tax on their paid wages.
By StatusQuoContinues | NOVEMBER 26, 2014 10:59 AM
Let me rephrase the title so it's MORE accurate - "Offshore IT work benefits companies bottom line at the expense of Canadian jobs"
( Page 1 of 1 )
Join The Conversation Sign Up Login

In Your Neighbourhood Today

SPONSORED CONTENT View More