Contrary to the widespread fear of job loss due to offshoring to countries like India, globalisation of services has created trade surplus in IT services of the United States from $2.1 billion in 1995 to $4.2 billion in 2002, according to a US think-tank Cato.
US runs a trade surplus in the IT services, a sector directly affected by offshoring. The US exports rose from $2.4 billion in 1995 to $5.4 billion in 2002 in computers and data processing services while imports rose from $0.3 billion to $1.2 billion.
Thus the US trade surplus in these services has expanded from $2.1 billion to $4.2 billion, Cato Institute said in a trade briefing paper.
In recent years, many Americans have lost their jobs and thus suffered hardship. Many others worried that they would be next in the line. There is no point denying these hard realties, but just as surely there is no point in blowing them out of proportion, it said, adding the US economy was not running out of good jobs.
"Regardless of whether economic times are good or bad, some amount of turnover is inescapably a fact of life in a market economy and this fact can not be wished away by blaming foreigners and it can not be undone with restrictions," the paper noted.
There is no place for policies that seek to stifle the change in the name of preserving existing jobs. The innovation and productivity increases that render some jobs obsolete are also source of new wealth and rising living standards, the paper said.
US is a major exporter of services generally and runs a sizable trade surplus. In 2002, services exports accounted for 30 per cent of total exports and exports exceeded imports by $64.8 billion, the paper noted.
Accordingly, the increasing ability to provide services remotely is a commercial boon to many US service industries and though some jobs are doubtless at risk, the same trends that make offshoring possible are creating new opportunities -- new jobs throughout the US economy, it said.
Because of the recent recession, US economy has suffered a shortage of jobs and there is a natural temptation under these conditions to fear that this temporary setback is the beginning of some permanent reversal of fortune.
"But its useful to recall that similar anxieties have surfaced before and over many cyclical downturns in the economy have promoted predictions of permanent job shortages and each time those predictions were belied by the ensuing economic expansions," Cato Institute said.
