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The flow of IT-related jobs offshore is accelerating beyond even the most bullish expectations, according to the latest estimates from Forrester Research.

The analyst group has upped its previous projections of the migration of jobs from the US by 40%, predicting that 830,000 services jobs will be moved to lower-cost countries by the end of 2005. Last year Forrester said that figure would be 588,000.

Forrester expects that 1.6% of jobs in the affected categories will be affected by offshore outsourcing by the end of 2005, up from 1% in 2003. It has also slightly raised its long-term prediction that 3.3 million US services jobs will be moved offshore by 2015 to 3.4 million.

As well as the well-documented savings to be made from using cheaper labour in countries like India for functions such as call centres, Forrester cites several new drivers of growth.

Leading Indian suppliers are offering broader services, thus affecting a wider workforce back in the US. Business process outsourcing is a prime example of this, as companies increasingly demand an offshore element from BPO vendors.

In fact, according to research by IDC, worldwide demand for IT-enabled BPO will rise at a compound annual growth rate of 11% to $682.5 billion in 2008, up from $405 billion in 2003.

Forrester says a hard core of 5% of Fortune 1000 companies are "full exploiters" of offshore outsourcing, while many more that have successfully experimented with small-scale projects are "ramping up" their use of the strategy.

Where specialist offshore suppliers are unable to provide services, some US companies are even bypassing them altogether to form "captive" operations abroad themselves, for functions such as accounting and claims processing.