Is offshoring to blame for job losses?

perspective During the G20 economic summit earlier this month, thousands of protesters took to the streets of London, besieging the Bank of England and generally causing mayhem.

It's been a long time since we have seen such a passionate display of feelings about jobs and the perilous state of the economy.

One of the aspects of globalization that really bugs the protesters is offshoring. Offshoring has never been all that popular with the man on the street, even though economists have always explained that, in a growing economy, sending work offshore results in a greater flow of capital back to the source country--therefore enriching the country that offshores service-sector work, like IT and customer services.

Many believed the economists during the good times but in the present recession one can now hear the man on the street saying, "I told you so."

For companies involved in making decisions about whether or not--or whether to continue--to offshore, new risks are developing. It's not that the process of offshoring has become any more risky--in fact with the amount of experience possessed by some suppliers, it is anything but.

The shift is consumer-led and is likely to be a nationalistic backlash to the recession itself. 'British jobs for British workers' is becoming the aphorism of choice.

Consumers are well-organized and social networks allow single-issue campaigns against individual companies to be championed in a way that could never have happened in a pre-Twitter era. Expect some of the unrest from the streets of London to be transferred to a social network near you soon.

But is this hatred of offshoring justified?

It's understandable in a recession that most consumers would prefer companies to hire locally but the fact is that many companies are already global. What is offshoring if your company already operates in dozens of markets?

Progress within the IT industry is destroying more jobs than offshoring anyway. Should developments such as "the cloud" be the subject of protest? It's probably responsible for far more change in the way we do business than the offshoring of jobs across borders, yet I only ever seem to read about how wonderful and innovative this brave new cloud world is going to be.

IT systems are being automated and industrialized, resulting in the need for fewer operators and less support personnel.

Just take a look at some popular IT trends: virtualization, service-oriented architecture (SOA) and software-as-a-service (SaaS).

What connects these technologies?
They are all making the technology environment simpler for the customer. For example, by extensively using only browser-based tools a company will entirely change their requirements for application, desktop and infrastructure support. And the various virtualization architectures are reducing the need for companies to hire staff to support a spaghetti-junction of kit at their own office.

This industrialization of IT is great for the CIO. The total cost of ownership is reduced, as systems become easier to install, upgrade and maintain. New systems can be swapped in as needed, the only headache being data migration and familiarizing users.

This virtual world of cloud-based services, though it has many positive attributes, could be a far greater destroyer of jobs than offshoring ever has been. So why do we fear offshoring and embrace the cloud? Because the pragmatic debate has become distorted due to the nationalistic rhetoric of the recession.

In the IT industry of the 21st century, it's becoming more and more difficult to define where our jobs are based. Who can remember the days of the IT department and the support desk? How often today are these functions now provided by an IBM, Capita or EDS? People now work side by side in the same office, yet draw salaries from entirely separate companies.

For IT workers, the threat of finding your job has been offshored remains--but this has to be weighed against the constant technological innovation.

As technology becomes easier to maintain, there will naturally be fewer jobs for people to keep it all running. Those who believe offshoring is to blame for the demise of IT jobs need to look longer and harder at the problem.

Mark Kobayashi-Hillary is a director of the U.K. National Outsourcing Association and the author of Who Moved My Job? This article was first published on ZDNet Asia's sister site, Silicon.com.