BT’s plans for a research base in China are the latest evidence that the trend for offshoring is affecting high-level skills, say experts.

The telecoms giant announced last week that it is to open a facility in Shanghai, expected to employ up to 20 staff by the end of the year.

IBM, Microsoft and Cisco already have high-end research and development centres in emerging economies.

China is particularly attractive because of the supply of quality graduates, said Philip Virgo, strategic adviser to skills group the Institute for the Management of Information Systems.

‘We have not paid enough attention to the top level skills so the
offshore market is moving right up the food chain into areas which we thought were ours,’ said Virgo.

‘Global rating tables show the UK still has four universities in the top 20, but China already has 20 or 30 institutions producing quality candidates in much larger quantities.’

Technical qualifications in the UK are suffering from a huge reduction in numbers,
according to Mark Kobayashi-Hillary, director of the National Outsourcing Association.

‘Offshoring is not just cheap and cheerful low-cost IT labour. If a company of BT’s stature is investing in China, that will filter into the rest of UK industry,’ he said.