Asian BPO sector to grow 14% says UNDP

BPO industry in Asia is expected to grow at the annual rate of nearly 14% to 2008, generating six million new jobs by 2015, according to United Nation Development Programme (UNDP)’s Asia-Pacific Human Development Report 2006, released in Phnom Penh.

The global outsourcing market has grown phenomenally from $570 billion in 2002 to an estimated $1.2 trillion in 2006.  India accounts for over 40% of the global BPO market.  India’s dominant position has meant that services account for nearly 26% of South Asia’s exports.  Within services-business, process outsourcing and short-term migration emerge as the most important segments.  Of the top 10 BPO destination in the world, five are in Asia.

While India leads the pack, other major Asian providers are China, Philippines, Malaysia, Thailand, and Vietnam.  Asia’s advantage lies in its growing pool of highly skilled, low cost workers.  The 3000-odd educational institutions in India train more than 200,000 software professionals and an equal number of non-engineering English Speaking graduates every year.  Add to this, labour shortages in Western Europe and the US on account of their ageing populations.  All this has turned out to provide Asia, particularly India an edge.

The employment possibilities from the BPO industry in the future seem immense.  An additional advantage that outsourcing has is that it “draws on a wider social spectrum” meaning it is age and gender-neutral.  It also has, according to the report, spill over employment effects due to higher demand generated for consumer durables and other services.  The Asian export of BPO services has also advanced in terms of technology.

The services provided include information technology functions, telemarketing, technical back office processing, financial analysis and risk management services.  Another growth area is services provided by short-term migrants.  Its key contribution is the foreign exchange it generates. The report states that while such movements to traditional destinations like the US and EU are slowing down, there has been a significant rise in inter-Asia migration.

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