Capitalising of the Potential of Global Services Outsourcing - a Knowledge Sector Perspective

Abstract

The contribution of the services sector to the Indian GDP is showing a consistentincrease and among the services, it is the IT and !Tes services which have fayed a primerole in winning global recognition for India 's prowess in delivering high quality servicesto global clients. The IT and BPO industry in India contributes to over 20 per cent ofexports, its contribution of GDP is 5.9 per cent, accounts for 10.5 per cent of th e revenueshare of the service sector. The country today is the prime destination ofglobal sourcingfor IT and !Tes accounting to 51 per cent of the global sourcing market of $94 billion in2008-09. India has a 62 per cent share of the global technology services market (ITservices, engineering services and R&D) of $58 billion and 32 per cent share of theGlobal Business Outsourcing market of $3 7 billion. The share of outsourcing to India hasincreased because customers derive great value from transformation ofprocesses, accessto critical resources, quality trained workforce and reduced reaction time apart fromlower costs. India would emerge as the services outsourcing destination of the world justlike how China has become the manufacturing destination of the globe. India has ampleopportunities to capitalize on the services outsourcing space due to its demographicadvantage and the emerging global reality of ageing population across continents. Thispaper discusses the key trends with regard to markets, employment, strengths andunhapped potential of India in IT and !Tes, the emerging potential KPOs, and the realpicture with regard to the future growth of India as a key palyer in the outsourcingservices sphere.