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Offshoring It Will Double In Five Years But What About It Graduate Unemployment?

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Wow 17% graduate unemployment, visas for skills shortgages.

Talk about knifing your own population in the back.

http://www.computerweekly.com/blogs/inside-outsourcing/2010/09/offshorng-it-will-double-in-five-years-but-what-about-it-graduate-unemployment.html

Offshoring IT will double in five years but what about IT graduate unemployment?

By Karl Flinders on September 23, 2010 11:39 AM | 3 Comments | No TrackBacks

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I wrote a blog post last week about the fact that Computer Science graduates are the largest group of unemployed graduates in the UK with 17% of recent graduates unemployed.

There was a great debate about whether offshoring was the main cause of this. Not everyone thought so. One thought 17% might not be very good.

Well, if offshoring is the main cause of Computer Science graduate unemployment, there could be trouble ahead. I have spoken to Gartner's Ian Marriot today about the likely growth of the use of offshoring by UK businesses and he says it will probably double in the next five years. He says this is due to factors such as confidence in offshore services meaning businesses offshore a broader range of services. He also said the small, medium business sectors as well as the public sector are expected to offshore more work.

Also, according to Gartner, the recession has caused 38% of CIOs to offshore more work, 44% offshore the same amount and only 18% offshore less in 2009.

The figures from the Higher Education Statistics Agency (HESA) show that 17% of 2009 computer science graduates were unemployed. This is the highest and the average graduate unemployment is 10%.

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Offshoring is only one cause of I.T. or Computer Science unemployment, onshoring is a bigger problem IMHO.

Having said that, what's stopping you from getting away from the areas of huge competition and into the touchy-feely sh1te which is both well paid and in some demand.

I.e. like Risk management, change & configuration management. You know, away from the techie stuff.

Further, you gotta wonder at the mentality of anyone taking up a C.S. degree in recent times. :blink: Like this hasn't been coming for 30 years or so.

Personally, this onshoring/offshoring lark does hit me severely in terms of available work - but I'm well insulated to it ; it is very little to do with the recession however.

As for Graduate unemployment? Well I just don't know how the University/Poly ponzi scheme has kept going for so long. It really was a cynical ploy by the then Labour government to get youngsters to pay their own dole queue.

My sympathies go out to one poor schmuk who has one daughter graduated with a first in C.S. - working in a call centre, with two siblings doing C.S. still at uni !

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People talk on here about £25k,£35K, £50K like it is normal, it is actually grossly overpaid in the overall global situation, jobs will continue to leave while there is this disparity

We ain't that clever!

Trouble is that now it is the educated people are being swapped now for educated people abroad who'll work for a fraction of the salary.

Do you think the Chinese and Indians aren't after our software, finance, accounting and banking jobs? or do you think they are happy making trainers?

My son is 10, I won't be advising him to go to Uni

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All the chatter I am hearing at the minute is who is going to get the lions share of public sector work which is going to be outsourced/offshored.

Councils etc.. have resisted shared services / offshoring for a while but its about to hit. At the minute the discussions are focusing on shared services but it won't be long before someone says "hey wouldnt this be cheaper if we based it in romania?".

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The west off-shored the bulk of its manufacturing years ago. What not many people realise is that this damn near killed western economies but the impact was mitigated by expanding the state and government borrowing. We are only now hitting the wall with this strategy.

Outsourcing the white-collar jobs will be the final nail in the coffin, nicely timed with the post-manufacturing debt bubble.

Fasten your seatbelts.

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The west off-shored the bulk of its manufacturing years ago. What not many people realise is that this damn near killed western economies but the impact was mitigated by expanding the state and government borrowing. We are only now hitting the wall with this strategy.

Outsourcing the white-collar jobs will be the final nail in the coffin, nicely timed with the post-manufacturing debt bubble.

Fasten your seatbelts.

I think a lot of jobs went from Manufacturing to Sevrvices too.

The average wage in the world is $7K,we may well be 'developed' but we are no longer worth what we pay ourselves when these jobs can cross borders.

I am surprised we haven't seen more by now

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The most intelligent 5% of the population of China is greater in number than the population of the UK. Unless you think they are somehow racially inferior our privaleged position in the world is untennable.

We used to be richer because we had advanced technology and tools (capital) which lead the world during and after the industrial revolution while most of the planets people existed as subsistance farmers. But much of the "developing" world has no problem with access to capital now.

And what do we have? A sense of entitlement, a bloated public sector and an economy based on debt and asset inflation.

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The most intelligent 5% of the population of China is greater in number than the population of the UK. Unless you think they are somehow racially inferior our privaleged position in the world is untennable.

We used to be richer because we had advanced technology and tools (capital) which lead the world during and after the industrial revolution while most of the planets people existed as subsistance farmers. But much of the "developing" world has no problem with access to capital now.

And what do we have? A sense of entitlement, a bloated public sector and an economy based on debt and asset inflation.

Wage arbitrage is inevitable long term but it would be nice if our gov would at least fight our corner i.e. by ceasing economic immigration or work visas. A little bit of unofficial constructive protectionism (yes you can bring in you cheap ass products but you have to fill in these 50 forms and it will take us a year to vet them all) would be nice too.

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The most intelligent 5% of the population of China is greater in number than the population of the UK. Unless you think they are somehow racially inferior our privaleged position in the world is untennable.

We used to be richer because we had advanced technology and tools (capital) which lead the world during and after the industrial revolution while most of the planets people existed as subsistance farmers. But much of the "developing" world has no problem with access to capital now.

And what do we have? A sense of entitlement, a bloated public sector and an economy based on debt and asset inflation.

This time last year I was stood on the banks of the main river in Shanghai surrounded by tall office buildings and my guide told me that 15 years before the area was all fields for cattle.

There wasn't a factory in sight for miles, just offices, banks,financial companies etc....

Shanghai has the same population as Australia.... all of it! They aren't interested in how many cheap trainers and jeans we buy anymore that'll do for the industrialised areas,

Recruiting IT and finance more is bound to happen.

Having had a career in Engineering/manufacture atleast made this acute to me during the nineties, for some it'll be a sudden wake up call here

Edited by robo1968

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A little bit of unofficial constructive protectionism (yes you can bring in you cheap ass products but you have to fill in these 50 forms and it will take us a year to vet them all) would be nice too.

I am dealing with someone based in Argentina at the moment. he pays 70% on Chinese products! Israel charges 40-50% for Chinese/Taiwanese products..... we charge <8%

Protectionism is another subject but a fair level might be an idea, we get charged 3% on importing tooling to the UK and 33% when trying to get it into China, they got it right methinks

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Anyway my feeling that IT has already taken the big hit - the headlong dash for on/off shoring really kicked off after the dot com crash when all the easy money in IT dried up. Anecdotal what I am seeing is that its reached saturation point (indeed reached it maybe 5 years ago), and pretty much any vulnerable IT job has already gone. Also (again anecdotaly) there is a growing realization in some sectors that competitive advantage can be gained by using small highly skilled teams that are closely integrated into the business rather than using offshore sweatshops. Actually building such teams and establishing processes for them etc is one of my areas of specialty, and next month I start a new project at a 50% increase in fees ...

The real dangers to our economy are IMO:

** onshoring labour

** offshoring the core business

Offshoring labour isnt the big threat (and its something we cant prevent anyway).

Edited by goldbug9999

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The most intelligent 5% of the population of China is greater in number than the population of the UK. Unless you think they are somehow racially inferior our privaleged position in the world is untennable.

We used to be richer because we had advanced technology and tools (capital) which lead the world during and after the industrial revolution while most of the planets people existed as subsistance farmers. But much of the "developing" world has no problem with access to capital now.

And what do we have? A sense of entitlement, a bloated public sector and an economy based on debt and asset inflation.

Well, we have X Factor.

smile.gif

Seriously though, we are still streets ahead in terms of some high technology, arts/culture & management capability, which are all big business these days.

Basically, we are better at these things higher up the value chain - I think it's called comparative advantage, i.e. we have a comparative advantage in high technology, arts/culture & management capability so it makes sense for us to keep doing this and for developing nations to pay us for this.

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The most intelligent 5% of the population of China is greater in number than the population of the UK. Unless you think they are somehow racially inferior our privaleged position in the world is untennable.

Sorry but education is still much better in the UK than China. Their top 5% is comparable to our top 20% I would say.

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Anyway my feeling that IT has already taken the big hit - the headlong dash for on/off shoring really kicked off after the dot com crash when all the easy money in IT dried up. Anecdotal what I am seeing is that its reached saturation point (indeed reached it maybe 5 years ago), and pretty much any vulnerable IT job has already gone. Also (again anecdotaly) there is a growing realization in some sectors that competitive advantage can be gained by using small highly skilled teams that are closely integrated into the business rather than using offshore sweatshops. Actually building such teams and establishing processes for them etc is one of my areas of specialty, and next month I start a new project at a 50% increase in fees ...

The real dangers to our economy are IMO:

** onshoring labour

** offshoring the core business

Offshoring labour isnt the big threat (and its something we cant prevent anyway).

I think you are broadly right but you are focusing only on IT.

There is a whole world of transactional business process crud which could be just as easily be done by Sanjit in Bangalore as Tracey the obese AP clerk in somewhereshire county council. The oportunity for IT will be in the services and underpinning assets which facilitate this. That will all be done on a massive System integrator / comoditized cloud scale so as someone upthread ^^ said you will see more techies migrating to touchy feely, relationship manager, SLA management roles.

IT is going down a shared service route except dressing it up as SaaS/Cloud, its just buzzword bull-shizzle for the same process. Sure it drops your customisation and integration options but if your budget is being squeezed hard enough its will be the way people go.

It was always going to happen, you just have to roll with it and find the next niche.

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Our society is incredibly selfish. Unemployment will hit 20% at some point, but because the other 80% all have jobs they won't care all that much or will just be apathetic towards to problem like people are now.

For anyone wanting a job in the UK take a look at where the money is-

http://www.careerbuilder.co.uk/Article/CB-234-Job-Search-10-top-paying-careers-in-Britain/

That's finance and marketing. The other jobs listed are very niche and you are unlikely to get into those fields, same goes for the medical field which is here is very competitive not to mention difficult.

So everyone behold- the path to wealth is by being able to manipulate capital flows either directly through financing or indirectly through encouraging people to buy stuff. Ofcourse doing your own business would be even better than either of those fiellds.

Edited by Saberu

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People talk on here about £25k,£35K, £50K like it is normal, it is actually grossly overpaid in the overall global situation, jobs will continue to leave while there is this disparity

We ain't that clever!

Trouble is that now it is the educated people are being swapped now for educated people abroad who'll work for a fraction of the salary.

Do you think the Chinese and Indians aren't after our software, finance, accounting and banking jobs? or do you think they are happy making trainers?

My son is 10, I won't be advising him to go to Uni

Well someone has got to square the circle that the cost of running a median household in Europe is far in excess of 2 x $7,000.

No objection to free competition but it is unfair for corporations to take advantage of the fact that foreigners are willing to pack themselves into small flats & houses in the rougher parts of our cities to gain skills that will allow them to buy a house for cash back home in 2-3 years.

Unless the corporation is prepared to foot the bill for the social cost in the 'host' nation?

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The most intelligent 5% of the population of China is greater in number than the population of the UK. Unless you think they are somehow racially inferior our privaleged position in the world is untennable.

Similarly, the stupidest 5% of china's population is bigger than the population of the UK.

So all you're really saying is that China has a lot of people

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Well someone has got to square the circle that the cost of running a median household in Europe is far in excess of 2 x $7,000.

No objection to free competition but it is unfair for corporations to take advantage of the fact that foreigners are willing to pack themselves into small flats & houses in the rougher parts of our cities to gain skills that will allow them to buy a house for cash back home in 2-3 years.

Unless the corporation is prepared to foot the bill for the social cost in the 'host' nation?

You know, what always makes me chuckle about companies off-shoring their IT / closing their UK factories is that they aren't planning to offshore their customers...

Most are still planning to sell X amount of shit in the UK, and will use off-shoring to lower their costs. Guess what... as they employ fewer UK staff on lower salaries, their UK customers have less money to spend, and the people they employed at the off-shoring destination aren't interested in buying their products and/or services en masse. Demand drops by X-n and what's the answer? Yes, you guessed it! More off-shoring to cut costs and retain profitability!

Dooooooomed I tell ye, DOOOOOOMMMMMMED!!!!

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You know, what always makes me chuckle about companies off-shoring their IT / closing their UK factories is that they aren't planning to offshore their customers...

Most are still planning to sell X amount of shit in the UK, and will use off-shoring to lower their costs. Guess what... as they employ fewer UK staff on lower salaries, their UK customers have less money to spend, and the people they employed at the off-shoring destination aren't interested in buying their products and/or services en masse. Demand drops by X-n and what's the answer? Yes, you guessed it! More off-shoring to cut costs and retain profitability!

Dooooooomed I tell ye, DOOOOOOMMMMMMED!!!!

it's all downhill from here , the current form of society has peaked decades ago

im hoping the future is more based around growing and cooking your own produce , community based , how this would work in the uk though im not sure - what exactly would happen to the 20 million around london for example?

i think it will be war

Edited by Ruffneck

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Well, we have X Factor.

smile.gif

Seriously though, we are still streets ahead in terms of some high technology, arts/culture & management capability, which are all big business these days.

Basically, we are better at these things higher up the value chain - I think it's called comparative advantage, i.e. we have a comparative advantage in high technology, arts/culture & management capability so it makes sense for us to keep doing this and for developing nations to pay us for this.

Excluding high tech which I would dispute the reason arts/culture and management are big business is because someone else is doing the dirty work! Bar farming our consumption is massively dependant on the productive capabilities of the rest of the world. We can afford to pay sport/arts a lot of money 1) because of debt and 2) because our material needs are being supplied at minimal cost on the back of wage slaves elsewhere.

We might make some money off the back of some sports merchndising but the idea that this is a higher value activity

[ we used to be good at genuine higher value actions such as taking raw materials and processing them into higher order goods like cars and ships] is utter toss.

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Similarly, the stupidest 5% of china's population is bigger than the population of the UK.

So all you're really saying is that China has a lot of people

That is exactly my point.

And that given in a global labour market the whole population of the UK will have to compete with the whole of the population of China we can no longer expect the stupidest 5% of our population (of which I assume you are one) to earn more than the smartest 5% of theirs.

"Wages" are going to level out globaly, this disparity cannot be sustained.

If person A in one country is being paid more / enjoys a better standard of living than person B doing the same job in another country the market will correct this.

Your only option to avoid this is to make the Chinese your slaves and I'm afraid they've learnt the lessons of oppium and also have nukes now.

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Growing pains in China.....

http://speedingticketfine.com/the-longest-traffic-jam-ever-60-miles-long

A 62-mile-long traffic jam on a highway leading to Beijing has now entered its ninth day, with no relief in sight, according to Chinese state media.

The gridlock on the National Expressway 110, also referred to as the Beijing-Tibet expressway, began on August 14 due to a spike in truck traffic heading toward the capital, AFP reported. The problem was exacerbated by a construction project on the roadway that began five days later, a spokesman for the Beijing Traffic Management Bureau told the Global Times. Small accidents and broken-down cars have also been a factor since the congestion started.

The Longest Traffic Jam Ever? 60 Miles Long!

The Longest Traffic Jam Ever? 60 Miles Long!

While state media reports noted that Beijing drivers are accustomed to such delays, having suffered through similarly epic gridlock in July, they may have to be especially patient in this instance as the construction project is not scheduled to end until mid-September.

Residents in the area have reportedly sought to capitalize on the captive drivers by setting up food and drink stands along the roadway. However a number of the drivers complained about exorbitant prices.

“Instant noodles are sold at four times the original price while I wait in the congestion,” one trucker said, describing the inflated prices caused him to suffer “double blows.”

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Well, we have X Factor.

smile.gif

Seriously though, we are still streets ahead in terms of some high technology, arts/culture & management capability, which are all big business these days.

Basically, we are better at these things higher up the value chain - I think it's called comparative advantage, i.e. we have a comparative advantage in high technology, arts/culture & management capability so it makes sense for us to keep doing this and for developing nations to pay us for this.

My thoughts are that emerging coutnries are nibbling their way up the chain of industriesstarting with primary and secondary manufacturing and moving upward.

In the last decade many high end manufacturers in automotive and aerospace have moved to and are now busy making in China, these advantages we speak of are being studied and are going to be copied and learnt sooner rather than later IMHO

great footnote ! :)

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"Wages" are going to level out globaly, this disparity cannot be sustained.

If person A in one country is being paid more / enjoys a better standard of living than person B doing the same job in another country the market will correct this.

Your only option to avoid this is to make the Chinese your slaves and I'm afraid they've learnt the lessons of oppium and also have nukes now.

I agree, although opium has one ' p' :)

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