Houston: The outburst of politicians and the workers over loss of high tech jobs to India and other low-wage countries due to outsourcing is really a distraction from the real threat.

Smart applications that automate jobs in areas such as customer service, Help Desk and directory assistance will cause more job cuts than outsourcing, according to a new report by the research firm Strategy Analytics.

So-called "smart applications" will soon cause more job losses than outsourcing, and policymakers will need to tread cautiously to minimize the effect of this new trend, the report warns.

"Looking forward, we don't really see the big threat in the long run being outsourcing to India. We see the real threat from outsourcing to intelligent capital," said Harvey Cohen, president of the research firm.

"In the last decade, about 10 million manufacturing jobs involving physical labour and repetitive activities worldwide were lost due to machines replacing humans, creating a $ 100 billion opportunity.

"In the next wave, there will be an employment threat involving the substitution of emerging systems with embedded intelligence for many first-level jobs in service industries, resulting in a net loss of customer service, help desk, directory assistance, and related support function positions," the report said.