Emerging nations in South-east Asia and central Europe could eat up 45 per cent of India’s share of the booming outsourcing market as the sector failed to draft a long-term strategy to stay ahead, a top global IT consultancy says.

Offshore business process outsourcing (BPO) earned India an estimated US$2.3 billion in 2003, representing a more than 80 per cent share of the global market, according to US-based Gartner.

‘We’re saying India would stand to lose 45 per cent of that 80 per cent share by 2007. India will have a 55 per cent market share while other countries will have about 45 per cent,’ Gartner research director Sujoy Chohan said.

The government and the industry had ’suffered from the erroneous belief’ the sector could match booming growth of its software and other mainstream information technology (IT) activities without devising a long-term roadmap to do so, he said. ‘India as a nation has been complacent,’ he told AFP.

Revenues at India’s outsourcing firms, which provide such services as call centres, insurance processing and credit card billing, have rocketed in recent years.

US and other firms have made a beeline for India, drawn by its vast educated English-speaking workforce and labour costs that are much lower than in the West.

But what India has failed to realise is that outsourcing ‘can be delivered by any graduate without the technical skills needed for IT,’ Mr Chohan said. ‘A lot of emerging countries have English-speaking graduates.’

Unlike other emerging nations such as Thailand, Malaysia, Fiji, Mauritius, the Czech Republic, Poland and South Africa, India has failed to draft a long-term plan to train workers for the industry.

‘Philippines has put into place a strategic roadmap for attracting foreign direct investment in BPO. Does India have one? It needs a long-term strategy like that,’ he said.

Mr Chohan said the Indian government needed to ensure schools and colleges offered skills that would allow them to be employed in the outsourcing industry, while other smaller countries were taking huge strides.

He said New Delhi needed to sit down with outsourcing corporate leaders to identify specific skills required for the industry and design curriculums accordingly. ‘It could be language skills or whatever the industry needs. The government of India needs a strategy and a roadmap for the sector,’ Mr Chohan said.

Mr Chohan said India’s IT services raced ahead because few emerging nations could match students trained at Indian technical institutes who were comparable to leading industrial nations such as Britain and the United States.

‘On the other hand in BPO, all English speakers are potential challengers for India. Look at the countries who have them - Thailand, Malaysia, Fiji, Mauritius, New Zealand, the Czech Republic, Poland and South Africa,’ he said.

The number of people employed by the Philippines in their call centres now stands at 50,000, while smaller countries such as Mauritius had outlined a roadmap of employing 10,000 people in the industry over the next five years.

‘No single country is going to challenge India, but the competition from a number of countries together will put pressure. Even small countries are going to chip away. At the end of the day, India will lose the jobs,’ he said.

India had a tremendous advantage because of the ‘mindshare’ it enjoys with overseas clients for mainstream IT services, but needed to wake up to long-term planning to maintain its dominance. - AFP

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http://business-times.asia1.com.sg/story/0,4567,126760,00.html