India Feels Backlash on Jobs

India's large, highly skilled labor force is attracting a growing amount of white-collar work from the U.S., along with an intensifying political reaction, especially during this national election year.

By next month, according to the National Association of Software and Services Companies in India, the nation's software and services sector will post total revenue of $15.57 billion, up from $5.54 billion in March 2000. Over the same period, the industry's employment has grown to 813,500 from 284,000.

The group estimates that exports of software and services--mostly to the U.S.--will rise to $12.20 billion in March from $3.96 billion in 2000, despite the sharp downturn in the U.S. economy. If growth trends hold, the association predicts that exports could reach $40 billion or more by 2009.

Indian executives point to a widely distributed piece of research by McKinsey Global Institute that shows that $1 spent on outsourcing may generate $1.14 in benefit for the U.S. economy. This comes from savings to the company plus goods and services, such as computers, bought by the Indian operations in order to provide the service.

The study also relies on an assumption that U.S. workers who lose their jobs eventually find productive new ones. The key word is eventually, said Steven Clemons, a conference speaker and executive vice president of the New America Foundation think tank. But there can be a long period of pain, as evidenced by the large number of people whose unemployment benefits are running out before they find a new job.

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