Globalisation must be closely watched

Opponents of globalisation come in all shapes and sizes. The media depict them as unwashed anarchists, defacing our treasured statues and smashing up our favourite coffee chains. Yet they can also be traditionalists, opposing the creeping Americanisation of our culture in the hope that we can be protected from Disney and CNN.

Alternatively, there are old-style socialists who refuse to accept that the UK can't still be a manufacturing-based economy, and sneer at the call centres and back-office business services that do so much for Gordon Brown's employment figures. But one thing unites all these groups. They believe that globalisation is something that can be opposed at all.

For the majority of us, including the government, globalisation is not something to defend or oppose, but a fact about the world. For this majority, two things are simply beyond dispute: that national economic success now depends upon helping companies move into the UK, which includes giving them the right to depart again should they wish, and that IT has transformed the choices available to companies when choosing where to locate.

The recent phenomenon of service sector offshoring encapsulates contemporary globalisation better than any other. When production of cars and electronics shifted eastwards through the 1970s and 1980s, people could argue that this was nothing especially new. After all, the global economy was highly integrated prior to the First World War, and goods have long been produced thousands of miles from where they are consumed. Besides, if the West spent less of its energies making things, that would simply mean it could specialise further in producing ideas, services, and scientific discoveries.

Digital technology and telecommunications networks are responsible for an altogether new type of globalisation. Current offshoring practices threaten those very service jobs which once promised to bolster our economy after the flight of manufacturing, and this is largely thanks to IT. The influx of service industries into skilled, English-speaking regions such as Bangalore may require sophisticated management practices and training programmes, but it wouldn't be happening in the first place if it weren't for the hardware.

So does globalisation take with one hand what it gives with the other? Is the 'knowledge economy' - once the great white hope of western labour markets - actually a passing fad, as ever greater numbers of white collar jobs get sucked east? Experts suggest that around 200,000 UK jobs look set to move off-shore over the next decade, but could this be a conservative estimate?

Last month, the Institute for Public Policy Research held a seminar on this topic, as part of its new project, 'A Manifesto for a Digital Britain'. One of the problems identified was that economists are broadly in favour of offshoring practices, and policy-makers relatively neutral on the issue, but that this provides very little with which to reassure the communities and families where jobs are at risk. Economists may be correct in claiming that 'only' two to three per cent of jobs in Europe and the US are liable to be offshored, but this sort of abstract figure doesn't speak very meaningfully to the people directly involved. So how should we be analysing the issue?

Economics needs complementing with a thorough understanding of the role of IT in contemporary working life. We need to know what sorts of work can be done in their entirety via a PC, a telephone and a cable, and what sorts can't. Obviously a waiter in a London restaurant can't be based in Bangalore, no matter how good the IT. Equally, we know that many call centre operatives can be. But what about an accountant? What about those working for the Citizens Advice Bureau? Or the receptionist of your local GP?

It is getting a grasp on these sorts of questions that could provide the best clue about future offshoring practices. We need common sense assurances, that are neither as abstract as macroeconomic statistics, nor as emotive as opponents of globalisation tend to be. Better bridges between mainstream policy debates and currently quite marginal studies of computer-mediated work may be just the thing.

William Davies is a Senior Research Fellow in Digital Society at the Institute for Public Policy Research. The ippr's 'Manifesto for a Digital Britain' programme was launched last month.