So much for the scare stories: Economist

Jun 6th 2008
From The Economist print edition

Illustration by David Simonds

New evidence shows that the gains outweigh the losses

BRITONS have long been fairly sanguine about traditional forms of globalisation such as trade and international investment. But the outsourcing of work formerly done in Britain to foreign countries has aroused fears, not least because it opens up the protected underbelly of services to international competition. Until now hard evidence of its overall impact on the British economy has been elusive. New research* should dispel most of the anxiety for those who prefer crunchy facts to scary myths.

Economists at Nottingham University's Globalisation and Economic Policy Centre delved into the accounts of over 66,000 firms in order to trace the effects of offshoring. Big companies with overseas affiliates are the most assiduous offshorers. Accordingly, the study paid particular attention to 2,850 British multinationals with foreign subsidiaries.

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