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ABSTRACT

The use of information technology for development is the flavor of the season. The growing market for IT services and business process outsourcing offers developing countries an opportunity to grow. The paper examines the disparate evidence on the size, pace of growth and nature of this market to assess this statement. It briefly covers the findings in the BPO industry.
The objective is to identify how the BPO industry could prove to be a boon for the developing nations. It accesses the potential benefits for these countries from the use of information technology. Outsourcing to offshore vendors or "off sourcing" is expected to continue growing in the near future because competitive advantages and economic pressures encourage companies located in the United States and Europe to look for partners in developing countries like India, Philippines, China etc. to deliver quality business services. The pressure to outsource non-core operations and concentrate on core business functions has always been characteristic of large companies. Initially, this resulted in the hiving off of certain operations to be undertaken by specialized, local firms in the developed countries themselves.

The limited size and possible slowing of the process of outsourcing raises questions about the other premises underlying the `BPO as development opportunity' argument. One is that the Indian experience hitherto can be replicated on the same scale in other developing countries, if supported with governmental and international assistance. The other is that the Indian experience marks a significant development advance and is sustainable. The paper discusses the various segments like simple bulk transactions, broad shared services, where developing countries like India are entering. The paper gives a broad overview of how the BPO services would act as a growth engine for the developing nations, primarily concentrating on India.

1. INTRODUCTION

In today's information driven age, there exists a digital divide that separates developed economies from those that are less or under developed. This divide contributes to ongoing global wealth disparity since less developed countries lack the necessary tools to compete in the current IT driven business environment.

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* Contributed by: -
Priyanka Ghosh & Alvika Derhgawen,
PGDIM, IM-11,
NITIE, Mumbai.