Outsourcing pie to touch $50 bn by 2010: Nilekani

By : |February 7, 2007 0

Pratima Harigunani

MUMBAI: India’s outsourcing pie might increase to $50 billion by the turn of the decade from $20 billion today.

And to top that, the share of services in global GDP will vroom from a 71 per cent morsel to 80 per cent bite in the next 20 years. These are just some of the glimpses that emerged at a high-brow crystal ball gazing by industry doyens like Nandan M Nilekani, CEO, Infosys, B Ramalinga Raju, founder and chairman, Satyam Computer Services and Pramod Bhasin, CEO, Genpact.


The fortunetellers came together to mull upon Transformation through Services Globalization – Role of Emerging Markets at the Nasscom Leadership Forum here.

Before looking ahead, Nilekani glanced back and rejigged memories of the days when services were considered impregnable.

"The fundamental shift to a wired, boundary-less world where services are now tradable has made a huge impact on business and economics of development. As we see India’s GDP reaching trillions, share of outsourcing business in that can increase to five per cent by the turn of the decade. We expect it to be a $50 billion business by 2010," he opined, adding that globalisation of services is making companies go back to their drawing boards and rework their business models.

"It will continue to make an impact on both existing and potential companies besides a larger macro-economic impact." Nilekani added.

Raju from Satyam seemed to be all nods at these future bytes. The journey, in his opinion, has just started and each industry will witness unique challenges along with the opportunities that virtualisation unveils.

"Imagine a world where most things can be virtually delivered. It’s not a new or incremental issue, but a disruptive technology that is silent but exceedingly impactful."

He added that from a current figure of $42 trillion, global GDP would spike to $80 trillion in the next 20 years. "The share of services in overall GDP is increasing at a pace of one per cent every year. From 71 per cent today, it may touch 80 per cent."

Raju also cited chain management, leadership planning and building competencies for tomorrow as issues that service providers need to grapple with.

The most interesting points, however, surfaced on the socio-cultural impact that the boom in services has bred. Nilekani alluded to the sweeping consumer boom and two-way markets and job-creation that the outsourcing industry with its 1.5 million army of people has created.

Outsourcing, as Raju put it, is not about one country versus other in terms of social ripples. "It’s an issue between different stakeholders. For instance, if in US, a decision on a job being outsourced is made, no matter to whom, it is the investor who hinges upon the outcome."

Bhasin chipped in with another view by mentioning the small and big changes in daily lives of rural folks that the call centres in Gurgaon have led to.

A question from the audience inspired yet another thought: "How does regulation arbitrage fit in this whole scenario and is the impact of the State getting weakened?"

Raju responded, "Not only companies but even countries are becoming smarter with the advent of free markets as they learn the efficiencies of delivering goods get better."

Nilekani summed it: "We are witnessing just the early days of a big huge trend with services globalisation."

© CyberMedia News

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