The movement of services jobs from the United States to places like India and China will accelerate faster than originally projected, according to new research from Forrester Research, Inc. (Nasdaq: FORR).

The company last week revealed in its report entitled, ‘Near-Term Growth Of Offshore Accelerating,’ that the number of U.S. services jobs moving offshore by the end of 2005 will grow to 830,000 compared with its original projection of 588,000 --- an increase of 40 percent. Two years ago, the company had said 3.3 million service jobs would move offshore by 2015, just slightly less than the latest prediction.

“The small increase in the long-term forecast is due to changes made in the base-level numbers updated in 2002 by the U.S. Bureau of Labor Statistics,” according to Forrester. By the end of 2003, 315,000 jobs had been shifted offshore which makes up not even 1 percent of the jobs in the affected categories. This number will grow to 1.6 percent by the end of 2005, the company’s report said.

Apart from the pressures on companies to show savings, the other factors pushing offshoring higher, Forrester said, was the fact that companies that have been outsourcing for quite a while, were ramping it up; and companies like Wipro and Satyam were offering additional services in addition to U.S. companies expanding their offshoring service capabilities.

Offshoring was almost becoming mandatory for Business Process Outsourcing (BPO) because it offered low-cost offshore labor, with even U.S. companies like IBM building or acquiring Indian and other companies for BPO work.

While 5 percent of Fortune 1,000 firms are full exploiters of offshoring (using it whenever possible), it is the firms that have experimented with small projects that will become more committed, fueling most of the growth, Forrester contends. These firms will increase spending during their migration offshore as they put processes in place to manage the remote IT and business operations, it said. Leading Indian suppliers, such as Satyam, Wipro, and Infosys, are expanding their services beyond application maintenance into business process outsourcing (BPO), packaged application implementation, and remote monitoring and administration of infrastructure, allowing them to capture a greater percentage of IT services’ spend, the report noted.

Competitive pressure has led U.S. companies like IBM and Accenture to expand operations in India, China, and the Philippines. “These two companies alone plan to add close to 9,000 jobs in India by the end of 2005,” according to the report.

Many U.S. firms are trying to achieve offshore cost savings themselves with “captive” operations in places like India, sending back-office jobs like accounting and claims processing offshore, in a bid to get near-term savings without going through vendors or retraining their own personnel.

Forrester predicts that new sectors like electronics and manufacturing that spend a high percentage of IT revenue, will be the next to make the move offshore. And that India will face competition as an outsource recipient from China, Vietnam and North Korea.

For its report, Forrester surveyed both user companies and business and IT leaders, made four trips to India to meet with offshore companies, as well as held vendor briefings.