Transcript Outsourcing `to earn India $60bn`

Outsourcing to India
Emerging Asia
This links with WJEC A2 Geography
Theme India.
1.2 How and why is the economy
changing ?
Outsourcing
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Outsourcing is when an element of the management of a
business is contracted out to a service provider.
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Examples of outsourced functions include web
development, web hosting, information management, call
centre management.
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This is often prompted by the need for business economy,
so outsourcing will go to low wage economies such as
India.
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India has a large English speaking population and can
therefore accept outsourcing from the UK and USA.
Outsourcing 'to earn India $60bn'
India could earn $60bn a year by
2010 from information technology
and outsourcing, an industry report
says.
 The report was prepared by
Nasscom, a lobby firm for Indian
software and service companies,
and international consulting firm
McKinsey and Company
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Outsourcing to India
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It is said business worth
$110bn would be
outsourced worldwide by
2010 and India is set to
capture more than half of
it.
But the report said more
investment was needed
in developing skills and
infrastructure to achieve
the goals
Outsourcing to India
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Most of the new business is expected to
be outsourced by insurance, retail,
banking and travel companies, the report
said.
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India's IT and outsourcing sector is
currently worth about $22bn and
expected to grow by 25% until the end of
the decade, it said.
Outsourcing to India
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The forecast also predicted the sector could
directly employ about 2.3m workers by 2010,
compared to 700,000 now, but projected a
shortfall of 500,000 skilled workers.
The report urged the creation of at least 10
"knowledge cities" with their own airports, roads,
office space and housing facilities to meet the
needs of technology firms. The report predicted
IT and outsourcing could more than double to
7% of India's GDP by 2010 and account for 44%
of export growth.
Discussion points
What are the advantages of
outsourcing for large companies?
 Why are firms attracted to India?
 What impact is outsourcing having
on the Indian economy?
 What impact is outsourcing having
on industrial areas of nations such
as the UK and USA?
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