Where America's white-collar jobs go: It's not just India

India may still be the world outsourcing king, the great global magnet that's attracting American and European service-industry work such as computer programming, insurance-claims processing, and call-center staffing.

But a growing host of countries aims to knock India off its throne.

From South Africa to Russia to Hungary to China, ambitious nations and companies are rushing to build call-center capacity and back-office processing units to claim their share of America's rich outsourcing pie.

So, even as US presidential candidates and labor unions bemoan the loss of jobs, there's growing global ability to attract American work. That means it may get even easier and cheaper for US firms to ship jobs overseas.

"This Kerry thing bothers us not one tiny jolt," says South African IT manager Ian McLuckie, referring to Sen. John Kerry, who has been sparring with Democratic presidential rival Sen. John Edwards - and President Bush - over how to respond. "Americans can fight this trend with customs fees or export duties or whatever," Mr. McLuckie adds, "but after a while, economics will prevail" - and jobs will continue to emigrate to cheaper places.

McLuckie leads a technology team at the headquarters of EDS Africa, a division of the Texas-based global outsourcing firm EDS. The Africa branch's modern building sits amid a sprawling office park with sleek buildings, manicured lawns, and bubbling fountains outside Johannesburg. Inside, charged-up programmers are, among other projects, building human-resources and payroll software for a big firm in Ohio, a state where the job-export debate rages.

In 2003, US firms struck $119 billion worth of million-dollar-plus outsourcing deals - up 44 percent from 2002, according to Gartner, a research firm based in Stamford, Conn. In 2004, Gartner projects there will be 30 percent more US firms doing outsourcing than last year.

South Africa is in the top echelon of India's IT competitors, according to Gartner. The group also includes Canada, China, Hungary, the Philippines, Poland, Russia, and others. A second tier includes Belarus, Costa Rica, Egypt, Estonia, and Venezuela. Promising rookies include Ghana, Mauritius, Morocco, Nepal, Senegal, and Vietnam.

"We're in a global market," says Richard Matlas, a Gartner research director. "Even though some politicians are trying to jump on the bandwagon of keeping jobs in the US, corporations have to look at global delivery of their services to stay competitive."

But it's still a controversial trend. Senators Kerry and Edwards propose various solutions, including corporate tax incentives to keep jobs in the US. A bill introduced this week by Sen. Christopher Dodd (D) of Connecticut would prevent federal agencies from awarding contracts to firms that employ overseas workers. At least 10 US states are considering similar legislation.

Page: 1 | 2