Beyond the Fear Factor: Trade Union Responses to off Shoring in Australia (2011)

IntroductionIndia has been witnessing a rapid growth of information technology enabled services (ITES). According to India's peak body for IT software and services-The National Association of Service and Software Companies (NASSCOM), the value of ITES and business process outsourcing (BPO) exports has increased to forecasted SUSD59 billion for 2010/11. According to this forecast, the sector was responsible for the direct employment of 2.5 million people. Total revenue as a percentage of GDP has increased from 1.2 percent in 1997/98 to 6.4 percent for 2010/11 (NASSCOM, 2011).There is also no doubt that the Indian information technology and communication (ICT) sector is the global focal point for large-scale off shoring projects, having to-date outshone other important ICT off shoring destinations such as Canada, Israel and Ireland (Aspray et al, 2006). Less certain, however, is the causal link between off shoring and the growth of India's ICT sector. The notion that this sectoral growth is the result of international job migration has not been adequately explored. This is a significant issue for key stakeholders in both the developed and developing world, including policymakers, business strategists and trade unionists. Some of the more extreme claims suggest that the development of ICT has brought us to the cusp of a 'flattened' world in which work of a certain type can be shifted virtually anywhere (Friedman, 2005). For example, Ashish Gupta, the COO of Gurgaon-based knowledge process outsourcing company Evalueserve, claims that, anything which does not involve customer faceto-face relations can and will be off shored (cited in Riitiger, 2007, p4). Various studies have made some startling projections for potential job transfers. For example, market research and international consultancy firms have suggested that anywhere between three and six million American jobs could be lost as a result of off shoring (Aspray et al, 2006, p3 8; OECD:, 2005, p 10).This paper explores this issue by focusing on Australian trade union responses to off shoring mainly to India. It begins by discussing the work types affected by off shoring in ITES and provides a brief sketch of the Australian firms engaged in off shoring projects in India. It then explores the strategic response of trade unions, challenging the misconception that union-led opposition is necessarily backward-looking, parochial or nationalistic. It argues that campaigns against off shoring are a legitimate expression of basic trade union relations with employees in affected industries. It also poses the strategic response of unions to the tradability of services, the development of knowledge and skills and the conception of off shoring as an outcome of corporate-led globalisation. It argues that trade union responses to off shoring can be conceived as forward-looking, relevant and internationalist. In doing so, however, it suggests a contradiction in the strategic response of unions. On one hand, unions continue to organise employees affected by off shoring. On the other hand, they increasingly do so within a conceptual framework that gives too much intellectual ground to opponents of trade unionism. As such, this paper argues that there is little evidence to suggest that the transfer of knowledge work from developed to rapidly developing economies is a foregone conclusion or a linear historical process. It concludes that the off shoring phenomenon, while significant, offers only a partial explanation for wider capital formation and sectoral employment trends in Australia and that these trends are driven largely by internal and structural economic processes. On this basis, it proposes grounds for further social and economic research in this area.Background of Australian firms with off shoring projects in IndiaIt has been argued that the more ICT-intensive a job, the more exposed it is to off shoring because it is 'location independent' (FSU et al, 2006; OECD, 2005) . …