Meanwhile, the offshore component in the delivery of U.S. IT services may rise to as much as 23% by 2007, up dramatically from 5% in 2003, according to a survey of IT services vendors, in a new report from IDC.

However, while many reports, including the one from UC Berkeley are predicting that outsourcing will doom U.S. jobs, the IDC report finds that such a dramatic shift may not necessarily translate into a gloomy outlook for U.S. IT services jobs or U.S.-based services firms.

IDC concludes that U.S. services firms will continue to use offshore resources to lower costs while the majority of U.S. workers at risk will leverage their current expertise into new skills that will remain in demand.

“Several facts have been lost in the debate about offshore sourcing,” said Ned May, program manager of IDC's Worldwide Services research. “One is that much of the spending to date has focused on only a few activities, which limits the impact of offshore on the broader market. Another is that much of the offshore spending will be captured by locally-based vendors, who are currently building up their own offshore delivery resources. But the most important fact being overlooked is that, while there will be a migration of some jobs overseas, it will be coupled with steady growth in a number of service activities on U.S. soil.”

To obtain an estimate of the impact that offshore sourcing may have, IDC applied a supply-side survey to the U.S. IT services market from two perspectives: “macro markets,” which are representative of how IT services contracts are bought and sold, and “activity groups,” which are based on the underlying tasks that are performed.

According to IDC, all three macro markets — project-oriented services, outsourcing, and support/training — will be impacted about equally by offshore sourcing, though additional market factors will cause project-oriented services to experience a net decline. When examined by activity group, however, IDC found the impact to be focused on maintenance and support, implementation, and operations, while planning and IT education and training will remain relatively resilient against the offshore trend.

“The activities that will migrate offshore are predominantly those that can be viewed as requiring low skill since process and repeatability are key underpinnings of the work. Innovation and deep business expertise will continue to be delivered predominantly from onshore,” added May.