Scotland urged to target growth in 'on shore' job opportunities

FOR more than a decade, jobs in the UK have been "outsourced" to India and the Far East – outraging trade unions in the process.

Lower wages and an eager, more pliable workforce were the big draw for industries keen to cut costs and take advantage of cheaper labour.

But now, especially in India, outsourcing has spawned a thriving multi-billion dollar industry, and the tide of jobs sent eastward is set to be reversed.

An expert in global outsourcing trends will tomorrow address Scottish ministers and tell them that unless the government acts fast, Scotland might miss out on an industry estimated to be worth $1.6 trillion in the next decade.

Andrew Rigby, head of outsourcing and partner at law firm Brodies, along with enterprise minister Jim Mather, will discuss how Scotland can attract its share of the global business process outsourcing (BPO) market.

Rigby insists the jobs becoming available in this new wave of outsourcing are high-end roles with average salaries in the region of 37,000 per year.

He said the government must establish a strategy and invest in infrastructure to attract investment from Indian and Chinese outsourcing companies.

"There is a small window of opportunity," said Rigby. "If we don't start to move, other centres, such as Singapore, or even Jamaica and Senegal, will become part of this."

In June, Rigby visited Bangalore to attend a summit for the National Association of Software and Services Companies, the body which represents the BPO industry worldwide. There he learned that as early as next year 20 per cent of the industry, currently estimated to be worth about $500 million (307m), is due to be put "on shore".

It will be located in western Europe, in an effort by Indian and Chinese companies to go multinational and get closer to European customers.

He is aware of the irony of jobs once sent to India coming back to the UK, although he cites evidence that outsourcing has not caused a net loss of UK jobs. Rather he argues the Indian government kick-started the industry by developing vast business parks where companies like Wipro and Tata establish massive outsourcing operations.

He said: "It is not for the private sector to do this, government needs to take active participation in developing this sector and highlighting the attractiveness of Scotland."

Scotland is already home to a number of high profile outsourcing operations in financial services, including major operations for custody services for State Street and Citibank. Also, JP Morgan has an internal back office operation in Glasgow.

But Rigby points out that outsourcing is applicable to most sectors, including those the Scottish Government has identified as key planks in its economic strategy, such as energy and pharmaceuticals.

He said Scotland's language skills and educational levels made it a right fit to attract skilled "top end" outsourcing operations.

Currently, however, Scotland does not even make lists of countries with significant BPO industries, although Germany and the Republic of Ireland do.

Rigby, who has been lobbying the government for the last two years on the subject, is frustrated. He wants to see it in the first instance conduct a study on the size of the existing BPO market in Scotland as well as develop an "elevator pitch" aimed at BPO companies worldwide. "We haven't really developed that. The government have an elevator pitch for other sectors but they don't have one for outsourcing. This needs to become part and parcel of the government's economic strategy."