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Global Insight (USA), Inc. Lexington, Massachusetts Information Technology Association of America

ITAA and Global Insight Present:. The Comprehensive Economic Impact of Offshore IT Software and Services Outsourcing in the United States. Global Insight (USA), Inc. Lexington, Massachusetts Information Technology Association of America Arlington, Virginia The National Press Club

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Global Insight (USA), Inc. Lexington, Massachusetts Information Technology Association of America

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  1. ITAA and Global Insight Present: The Comprehensive Economic Impact of Offshore IT Software and Services Outsourcing in the United States Global Insight (USA), Inc. Lexington, Massachusetts Information Technology Association of America Arlington, Virginia The National Press Club March 30, 2004

  2. Global Sourcing Benefits U.S. Economy • Lower Costs Lower inflation • Resource Efficiency Higher productivity • Better competitive position in global markets • Lower interest rates • Higher real wages • Higher consumer spending • Higher business investment • More exports • More jobs • Wide distribution of benefits across industries and states

  3. Offshore ITO Yields Savings } $52.2 Billion Savings $31.3 Billion $16.7 B Estimated and Projected Offshore Spending Estimated and Projected Spending If Onshore Resources Were Used Instead $4.2 Billion $10.0 B $2.5 Billion 2003 2008 1998

  4. Offshore ITO Is a Small Share ofTotal U.S. IT Software and Services Spending (Billions of Dollars, Offshore ITO Percent Share)

  5. Total Employment Is Higher With Offshore ITO (Thousands of Jobs) Net Employment Change: 90,000 in 2003 317,000 in 2008

  6. IT Jobs Displaced in the U.S., 2000 to 2003(including jobs lost and jobs not created) • Total IT jobs lost due to: • Recession • Dot-com bubble burst • Productivity gains • Over-hiring in 1990s • Offshore ITO 372,000 IT jobs lost or not created due to offshore ITO 104,000

  7. Real GDP Is Higher With Offshore ITO (Billions of 2000 Dollars and Percent Difference)

  8. GDP Price Deflator Is Lower With Offshore ITO (Percent Difference)

  9. Consumer Price Index Is Lower With Offshore ITO (Percent Difference)

  10. Prime Interest Rate Is Lower With Offshore ITO (Difference)

  11. Labor Productivity Is Higher With Offshore ITO (Percent Difference)

  12. Average Real Wages Are Higher With Offshore ITO (Percent Difference)

  13. Real Personal Consumption Spending Is HigherWith Offshore ITO (Billions of 2000 Dollars and Percent Difference)

  14. Real Investment Is Higher With Offshore ITO (Billions of 2000 Dollars and Percent Difference)

  15. Real Exports Are Higher With Offshore ITO (Billions of 2000 Dollars and Percent Difference)

  16. Most Industries Gain Additional New Jobs (Number of Additional Jobs Gained Due to Offshore ITO)

  17. All States Gain Some Additional New Jobs (Number of Additional Jobs Gained Due to Offshore ITO)

  18. Offshore Service Providers Buy More ICT Equipment (Billions of Dollars) The U.S. share is typically 15% to 20%. The challenge for U.S. manufacturers is to increase their share.

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