What you should know

Six key findings from the Association for Computing Machinery's "Globalization and Offshoring of Software" report:

1. Globalization of and offshoring within the software industry are deeply connected, and both will continue to grow. Key enablers of this growth are IT itself, the evolution of work and business processes, education and national policies.

2. Both anecdotal evidence and economic theory indicate that offshoring between developed and developing countries can, as a whole, benefit both, but competition between them is intensifying.

3. While offshoring will increase, determining the specifics of this increase is difficult, given the current quantity, quality and objectivity of data available. Skepticism is warranted regarding claims about the number of jobs to be offshored and the projected growth of software industries in developing nations.

4. Standardized jobs are more easily moved from developed to developing countries than are higher-skill jobs. These standardized jobs were the initial focus of offshoring. Today, global competition in higher-end professions, such as research, is increasing. These trends have implications for individuals, companies and countries.

5. Offshoring magnifies existing risks and creates new and often poorly understood or addressed threats to national security, business property and processes, and individuals' privacy. Although it is unlikely that these risks will deter the growth of offshoring, businesses and nations should employ strategies to mitigate them.

6. To stay competitive in a global IT environment and industry, countries must adopt policies that foster innovation. Toward this end, policies that improve a country's ability to attract, educate and retain the best IT talent are critical. Educational policy and investment are at the core.

Predictions

IT professionals in India will be the highest-paid occupation in the country, within 15 percent of U.S. compensation. The luster of outsourcing will dull, reducing the amount of work sent to India from developed countries. Indian firms will be caught in the trap of higher wages and less work, causing serious IT unemployment in Asia.

A new center of computer programming will emerge in Costa Rica as well-educated and well-trained young people put their skills to work. Without a large domestic market for their services, these competent professionals will sell their services on the global market for a fraction of the fees charged by competitors.