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IT Outlook 2004 Chapter 2: Globalisation of the ICT sector. Section on International Sourcing OECD-Eurostat Expert Meeting on Trade-in-Services Statistics OECD April 28 2004 Graham Vickery and Desir é e van Welsum. International Sourcing – Terminology.
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IT Outlook 2004Chapter 2: Globalisation of the ICT sector Section on International Sourcing OECD-Eurostat Expert Meeting on Trade-in-Services Statistics OECD April 28 2004 Graham Vickery and Desirée van Welsum
International Sourcing – Terminology • The international sourcing of IT and ICT-enabled services (often referred to as ‘offshoring’) is part of the globalisation of the ICT sector, and also of other services sectors • ‘Offshoring’ includes: • Insourcing: to foreign affiliates • Outsourcing: activities are contracted out to independent parties abroad • But: (in- and) outsourcing can also take place domestically
Illustration Onshoring, Offshoring, insourcing and outsourcing IT and business process services Approximate value of worldwide activity in 2001, USD
But: no official statistics on international services sourcing Look at: • Exports of services • if service activities are sourced internationally, the country receiving the international in- and/or outsourcing must export services back to the country of origin • Employment data • Input-output tables • Trade in intermediates
Growth of exports of other business services and computer and information services
This shows • Some of the countries often mentioned in the outsourcing debate have experienced strong export growth (e.g. India) • But, the exports of some of these countries are growing from a low base:
Share of reported total exports of other business services and computer and information services, 1995, 2002 (IMF BoP data)
However: • There are discrepancies in the reported data • A challenge for statisticians
Discrepancies: commercial services (excl. travel and transport)
Possible explanations • Reporting difficulties (definition of services and modes of delivery) • Lags in implementation of BPM5 methodology • Different data collection methods (difference between imports and exports surveys) and possibly recording criteria • Differences in treatment of certain categories (e.g. movement of temporary workers) • Operations of global firms
Questions • How can the discrepancies be explained? • Is the list of possible explanations exhaustive or are there other plausible explanations? • What can be done to improve the situation • In the short term? • In the long term?