When it comes to offshoring, France is a newcomer compared with the United States, the United Kingdom, and even Germany.1 From 2002 to 2004, offshoring accounted for only 4 percent of all jobs lost in France, and most of them were in manufacturing rather than the office work that UK and US companies increasingly move to countries with low labor costs. But the offshoring of service jobs is bound to accelerate as French companies strive to match the efficiency of their foreign rivals. With French unemployment above 10 percent, offshoring has already created anxiety among workers in France and sparked protectionist sentiment there. The entry of ten lower-wage countries into the European Union in 2004 raised the level of angst, as did recent government-commissioned reports on the challenge France faces in restoring its competitive position in the global economy.2
Recent research by the McKinsey Global Institute (MGI), updated with 2005 figures, shows that the offshoring of service jobs, while wrenching for the people affected, can create wealth both for the country that exports jobs and for the one that receives them. (The full report, How Offshoring of Services Could Benefit France, is available free of charge online.)...