David Ginn began reading about white-collar "off-shoring" in the late 1990s, when articles about the issue started appearing in economic development periodicals.

While the nation's technology

sector was still in overdrive, the reports warned companies were beginning to shift thousands of high-paid, "knowledge-based" jobs, from technical call-center operators to computer

FILE/AP Members of the Programmer's Guild hand out flyers during a demonstration in front of New York's Westin Hotel where a conference on "outsourcing" took place last month. The demonstration included workers from various professions, including the programmers who were protesting the fact that many computer programming and tech-support jobs have moved overseas.

programmers, out of the United States to India, China and other low-wage countries.

The trend has not let up. "It's going to be with us for a while," said Ginn, president and chief executive of the Charleston Regional Development Alliance, which promotes Berkeley, Charleston and Dorchester counties as a business destination. "That's where our challenge lies."

Off-shoring, sometimes called foreign outsourcing, is hardly new to South Carolina, which has lost thousands of textile and other manufacturing jobs to countries with cheaper labor costs. The rub this time around is that the trend seems to undercut the state's goal of broadening the economy and boosting income levels by attracting more higher paid, knowledge-based jobs.

Forrester Research projected last year 3.3 million jobs and $136 billion in wages will be lost to offshore outsourcing by 2015. The estimate includes nearly 473,000 computer-related positions.

South Carolina business recruiters say the extra competition from the likes of India and China won't make their jobs any easier. But they also say they aren't wringing their hands over the outsourcing boom.

"It comes down to doing what we do best in this country, and that is being on offense, not defense," said Sam Konduros, president of the Greenville-based Upstate South Carolina Alliance. "Some of these new wrinkles are putting people in more of a defensive posture. But look at China. It has a space program. Does that mean our space program is not worth pursuing?"

Democratic presidential candidates seized on the off-shoring issue this month after White House chief economist Gregory Mankiw said the practice could benefit the U.S. economy in the long run, partly by forcing displaced workers to learn new skills and by spurring innovation.

"It can be a painful adjustment, and it can go on for quite some time, but ultimately it can open up new opportunities," said Don Schunk, research economist at the University of South Carolina's Moore School of Business. "We've seen that in other periods of history as we shifted from agricultural to manufacturing to the service sector."

In the meantime, lawmakers from at least 15 states are taking steps to stem the flow of work to low-wage countries. In South Carolina, House Speaker David Wilkins, a Republican from Greenville, introduced a bill in the General Assembly last month that would block state agencies from using overseas call centers.

The backlash against foreign outsourcing has been heightened by grim employment figures at home. In South Carolina, the number of wage earners fell by almost 41,000 last year to 1.77 million, which marked the steepest decline in the country when measured on a percentage basis, according to the U.S. Bureau of Labor Statistics. The nation as a whole has lost 3 million manufacturing jobs, or one out of every six, over the last 3.5 years.

India, which has a large, well-educated, English-speaking labor pool, is the destination of choice for the scores of U.S. businesses that have sent white-collar, technical service-sector jobs abroad. Names include Delta Air Lines and BellSouth.

Last week, Charlotte-based Bank of America said it is setting up a company in India that will process some of its back-office operations. The new unit, Continuum Solutions Pvt. Ltd., will have about 500 staffers by the end of this year, with up to 1,000 employees by mid-2005. The bank already outsources software development work to Indian software companies.

"Talent, for better or worse, has become a commodity," said Ernest Andrade, director of the City of Charleston's Digital Corridor, an initiative to attract high-tech employers to the region.

"Short of legislative action or other protectionist measures, companies of all sizes, whether multinational or not, for competitive reasons will continue to migrate some of their ... functions overseas."

South Carolina has not lost many white-collar knowledge jobs as a result of off-shoring, namely because it has relatively few of those sorts of jobs compared to high-tech strongholds such as Washington state and California. The biggest impact to date has been indirect, said USC's Schunk.

"It's been more of a missed opportunity for us to compete for the ... jobs that have been moved," he said.

Commerce Department Secretary Bob Faith, South Carolina's top-ranking business recruiter, said off-shoring will not discourage or deter the state from grabbing its share of the knowledge-based economy under a new economic development strategy it adopted in December.

"It's true that some lower valued-added jobs can be outsourced," Faith said. "But it's certainly not true for the whole spectrum of knowledge-based or technology jobs."

The key for South Carolina, he said, is to concentrate on indus- tries and higher skilled jobs that are unlikely to be transferred to another country.

Despite its troubles, the battered textile business is included in this group. Japan-based Kawashima Textiles Ltd., for example, invest- ed $15 million to launch its first U.S. venture in Kershaw County last year, demonstrating "there are still viable textile business strategies in this state," Faith said. The company, which targets the automotive industry, expects its South Carolina payroll to grow to 100 workers from 30 by next year.

Developments at Siemens AG al- so suggest the state is moving in the right direction. The German industrial giant said last week a new subsidiary has picked Colum- bia for a $25 million corporate headquarters and automotive re- search facility that will create 70 jobs for Midlands residents. But days earlier, Siemens said the company will transfer as many as 15,000 software programming jobs from the United States and Western Europe to India, China and other low-wage locales.

The good news is the outsourcing trend may have peaked, said Robert Ady, a Mount Prospect, Ill.-based consultant who helps large corporations select sites for expansion projects.

"I don't see the more sophisticat- ed jobs that are up the food chain moving overseas ... and I'm not sure if we haven't reached the pin- nacle of the low-end technical jobs migrating overseas," Ady said.

Still, he said, South Carolina can't afford to sit still, especially when it comes to education, if it wants to become a player in the compet- itive knowledge-based economy. -----End Of Story-----