Growth opportunities
If in doubt, farm it out | Economist.com
There are two big trends. The first is demographic: despite the fears about “exporting jobs”, labour shortages in white-collar jobs are emerging in America and other rich countries. Second, the idea of the sort of work susceptible to outsourcing seems to expand every month. Genpact, for example, in March announced a joint venture with NDTV, a television channel, to offer services such as digitisation, video-editing and captioning. The biggest opportunities, however, are still in the banking and insurance industries, already the industry's largest clients. There is also great potential in the finance and personnel divisions of other big companies, and in law and pharmaceuticals, where India has particular strengths.
Worldwide spending on legal services amounts to about $250 billion a year, some two-thirds of it in America. India, with its English-language skills and common-law tradition, is well placed to secure a big share of the outsourced market in, for example, drafting patent filings and contract and loan documentation. Forrester, a research firm, forecasts this will involve 35,000 jobs by 2010.
In pharmaceuticals, the market in outsourced clinical trials, for example, is expected to reach $1 billion annually by 2010. Vasudeo Ginde, of iGATE Clinical Research, one of several dozen firms competing for a share of this cake, says that India has always had three essentials: doctors versed in Western ways, good (in places) hospital facilities, and huge numbers of patients. In addition, since the beginning of last year there has also been stronger patent protection for foreign medicines, so foreign firms are less nervous that conducting research in India will jeopardise their intellectual property.
Shortfall: Indian education is bad at teaching two skills of particular importance for both IT and BPO: teamwork, which in colleges tends to be seen as cheating, and communication. He jokes that oral skills are only really needed on entering education (kindergartens interview three-year-olds) and on leaving it (a doctorate might require a viva)
There are two big trends. The first is demographic: despite the fears about “exporting jobs”, labour shortages in white-collar jobs are emerging in America and other rich countries. Second, the idea of the sort of work susceptible to outsourcing seems to expand every month. Genpact, for example, in March announced a joint venture with NDTV, a television channel, to offer services such as digitisation, video-editing and captioning. The biggest opportunities, however, are still in the banking and insurance industries, already the industry's largest clients. There is also great potential in the finance and personnel divisions of other big companies, and in law and pharmaceuticals, where India has particular strengths.
Worldwide spending on legal services amounts to about $250 billion a year, some two-thirds of it in America. India, with its English-language skills and common-law tradition, is well placed to secure a big share of the outsourced market in, for example, drafting patent filings and contract and loan documentation. Forrester, a research firm, forecasts this will involve 35,000 jobs by 2010.
In pharmaceuticals, the market in outsourced clinical trials, for example, is expected to reach $1 billion annually by 2010. Vasudeo Ginde, of iGATE Clinical Research, one of several dozen firms competing for a share of this cake, says that India has always had three essentials: doctors versed in Western ways, good (in places) hospital facilities, and huge numbers of patients. In addition, since the beginning of last year there has also been stronger patent protection for foreign medicines, so foreign firms are less nervous that conducting research in India will jeopardise their intellectual property.
Shortfall: Indian education is bad at teaching two skills of particular importance for both IT and BPO: teamwork, which in colleges tends to be seen as cheating, and communication. He jokes that oral skills are only really needed on entering education (kindergartens interview three-year-olds) and on leaving it (a doctorate might require a viva)
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