Over the past few years, globalisation of markets, supply chains, and the formation of trading blocs have all resulted in high Interdependence and markets being intertwined. Governments, the world over, are grappling with what steps to take, forcing them to undertake unprecedented policy measures with high levels of intervention.
Normally, under such circumstances, emotional issues play up and expectations are pinned on governments to take very visible steps. These conditions are different from normal cyclic recessions that have been witnessed in the past. Part of the problem revolves around negative sentiments voiced by consumers, investors and other stakeholders, thus leading to liquidity crunch and unemployment.
Traditional measures of closing borders for trade and promoting protectionism is a potential risk that can surface. Most large corporations have more than 50 per cent of their business outside of the US and developed markets, which contributes substantially to overall growth of the economy. These companies need to remain competitive and ensure that these markets remain accessible.
All forecasts indicate that most developed economies will have negative GDP growth in 2009, whereas developing markets like India & China will still grow. Forecast in the year 2010, indicates that all economies will show positive trends. Nothing should therefore be done which seems very attractive in the short term but will have a long term negative impact. For example, foreign students form an integral part of all international university programs, but any message that they are not welcome or are discriminated against, will hamper globalisation of education and the workforce.
As we look at a longer horizon, the demographic changes and the dearth of people will drive a different economic order. Asian countries, excluding Japan are expected to grow more than twice as fast as developed economies of North America, Japan and Europe.
The share of Asian countries (again excluding Japan) in global GDP is likely to rise from 10 per cent in 1998 to 21 per cent in 2020. These trends will have far-reaching implications for the technology and business services industry. In a way, the economic downturn will reset mutual expectation between customers, partners, employers and employees.
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The Indian IT-BPO industry is expected to grow between 16–18 per cent and will be an integral part of the global value chain and play the role of a transformational partner, having a direct bearing on the industry. Clearly the resilience of the sector combined with robust business practices, service delivery excellence and strong fundamentals have enabled India to garner the largest share of the global sourcing pie and maintain its position as the world’s leading offshore destination.
The Nasscom India Leadership Forum 2009 is all about exploring new opportunities and planning ahead. Contemporary issues like Change Management, Emerging Markets, surviving the crisis, future of BPO, Green IT, Innovation and country specific sessions amongst a host of others have been designed to address, share and debate on the immediate issues, as well as keep our long-term initiatives still moving.