Silicon Valley joins the offshoring trend

An estimated 5% US IT jobs have been offshored, says Diane Morello, vice president of research at analyst house Gartner Group. However, this is expected to rise steeply over the next five years, which means that by 2010, 25% of US IT jobs will be situated in emerging countries.

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By  Angela Prasad Published  May 12, 2005

According to the latest Bay Area Council survey, 31% of companies located in Silicon Valley want to move part of their businesses elsewhere— including 14%, which are considering moving their whole businesses. Of those contacted, 18% say they either plan to, or already have, moved some of their operations offshore to nations like the Middle East or Asia. In addition, WashTech believes that companies that specialise in offshore outsourcing have captured at least US$75 million in state contract work. Today, an estimated 5% or fewer US IT jobs have been offshored, says Diane Morello, vice president of research at analyst house Gartner Group. However, this is expected to rise steeply over the next five years, which means that by 2010, 25% of US IT jobs will be situated in emerging countries. The offshore market for US firms stands at US$6.9 billion in 2005, with an approximately 20% annual growth rate through 2008, when it will reach US$17 billion, according to IDC. By that time, most offshore spending by US companies will be on applications, particularly custom application development, application management and systems integration, the researchers state.

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