Indian IT outsourcing industry: Future threats and challenges

The Indian Information Technology-Business Process Outsourcing (IT-BPO) industry has often been a subject of envy among developing economies, for the rapid growth it has recorded in the past two decades. From being a destination of low-cost technical labour and a pioneer of ‘body shopping’ model, the industry has transformed itself into a USD 100 billion behemoth engaged in offering a wide range of services including high-end R&D. However, the growth engine appears to be slowing down as India begins to lose its competitive advantages. The future of Indian IT-BPO industry depends on three key factors – availability of quality manpower, capability of Indian industry to move up the value chain from customized development and maintenance services to innovation, R&D and product development, and the growth in domestic IT consumption in order to reduce dependence on export markets. On all the three counts, the future scenario is subject to uncertainties. The industry is also unprepared for disruptive technologies of future such as quantum computing and nano computing.