Calls for greater industry-government partnerships.
Even as the economic slowdown takes its toll on the primary markets, the industry faces multiple challenges, including decline in sourcing spends, price reductions, competition from other countries and protectionism. The industry must address these challenges by finding new avenues for growth and look at strategies to improve operational efficiency, said Pramod Bhasin, chairman of the National Association of Software and Service Companies (Nasscom).
Bhasin, who is also president and chief executive officer of Genpact, said at the Nasscom BPO Strategy Summit held in Bangalore on Tuesday, that tapping industries like manufacturing, healthcare and retail, besides expansion into new geographies and tapping the domestic market for growth opportunities, would be the right way forward for the ITPO industry.
Nasscom’s president Som Mittal said that support for the industry by the government through extension of fiscal benefits under Section 10A/10B would mitigate the impact of the recession and protectionist measures adopted by the US government. “This is very necessary and is important for SMEs as it will facilitate their continued growth, provide parity with incentives under the SEZ scheme and encourage industry to move into the smaller cities.”
Mittal said that it is necessary for government, industry and other stakeholders to collectively address infrastructure challenges like lack of public services, high cost of training and other issues fro the ITPO industry to achieve its true potential. “This is necessary in a situation, where our competitors in the global sourcing market are fast catching up with us by scaling up their support incentives and initiatives,” Mittal said.
The Nasscom-McKinsey Perspective 2020 study places the total addressable market for the BPO industry at $630 billion. “To achieve this potential, the industry has to gear up for challenges now,” Mittal noted.
He said that during its discussions with the government, Nasscom has called for specific outlays for e-governance initiatives by different government departments. “For example, one minister of state was keen to create an online database of all the approvals granted by his department. Such opportunities will always spring up, as the government continues to be a key customer for the industry. A stronger detente between the government, the industry and other stakeholders will help the industry play a major role in developing key sectors like education, healthcare, infrastructure, citizen services and financial inclusion initiatives. This wil help create significant employment opportunities across India, which in turn, will have a direct impact on economic growth,” Mittal said.
India’s BPO sector has grown at a compounded annual growth rate of over 37 per cent to aggregate revenues of $14.7 billion in fiscal 2009 from $1.6 billion in fiscal 2002. Direct employment during this period increased from 1.55 lakh to almost 1 million people. The BPO sector is expected to grow by 13-15 per cent in fiscal 2010.
