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Department for Business and Trade (DBT)Latest NewsEconomics, government & business

Unemployment and offshoring reportedly prompts DTI rethink on globalisation

by Michael Millar 25 Aug 2006
by Michael Millar 25 Aug 2006


The Department of Trade and Industry (DTI) is reportedly reconsidering the government’s position on globalisation as unemployment continues to rise and more industries become vulnerable to offshoring.



Sources at the DTI told the Daily Telegraph that civil servants were focusing on the growing number of service sector jobs being lost in Britain due to competition from low-wage economies in India and China.



Present government policy, formed only two years ago, dictates that offshoring leads to a better deal for consumers, competitive advantage for British companies who can then invest in employment at home, and greater profits for shareholders. This in turn should encourage more people to invest in British companies.



The World Bank and International Labour Organisation has estimated that up to 16% of jobs in the service sector could move to low-wage economies.



A DTI study of the IT industry in June found that in theory, at least 70% of its 249,000 jobs could go abroad. The fear is that this trend could spread to other skilled professions.



“If you have got thousands of Indian graduates in UK law and they are offering their services via high-speed links, it may have implications for the UK economy,” a source told the Daily Telegraph.



At a recent meeting at the CBI to discuss UK skills levels, Alan Wood, CEO of electronics giant Siemens, told Personnel Today that when it came to being competitive, British companies “can’t afford to allow loyalties to a particular country to drive us”.



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The DTI has denied that there is any such review of its policy towards globalisation.


Michael Millar

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