Offshoring is not a threat to hi-tech employment, rather it will create new jobs and boost economic growth, according to the US-based Cato Institute.

"The wild claims that offshoring will gut employment in the IT sector are totally at odds with reality," Centre for Trade Policy Studies, part of Cato Institute, specialising in free trade, said in a briefing paper.

Although offshoring does eliminate jobs, it also yields important benefits to the extent that companies could reduce costs by shifting certain operations overseas and increase productivity, it said.

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The process of competition ultimately passes the resulting cost savings on to consumers which then can spur demand for other goods and services.

In particular, offshoring facilitates the diffusion of IT throughout the American economy.

According to Catherine Mann at the Institute for International Economics, offshoring of computer-related manufacturing accounted for 10-30 per cent drop in hardware prices, the paper said.

The resulting increase in productivity encouraged the rapid spread of computer use and thereby added some $230 billion in cumulative additional GDP between 1995 and 2002, it pointed out.

Offshoring offers the potential to take similar bite out of the IT software and service prices. The resulting price falls will promote the further spread of IT that take advantage of cheap IT, it said.

The IT job loss projected by Forrester amount to fewer than 32,000 per year, a relatively modest attrition in the context of total IT-related employment of nearly 6 million, it said.

"These job losses meanwhile will be offset by new IT-related jobs as computer and mathematical occupations continue to boom. The doomsayers are thus confusing a cyclical downturn with a permanent trend," it added.

Despite the trend towards offshoring, IT-related employment is expected to see a healthy increase in the years to come.

According to the US Department of Labour Projections, the total number of computer and mathematical occupation will increase from 3.02 million in 2002 to 4.07 million in 2012 -- a 35 per cent increase over a decade, the paper said.

Of the 30 occupations projected to grow fast during the decade, seven are computer related, it said, adding that the recent downturn in IT-related employment is likely to be a  temporary break in a larger trend of robust job growth.

Call for new trade restrictions to preserve current jobs are misguided, it said.