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Global Outsourcing Growth Weakens

by: Sarah Joson

Wednesday, July 20, 2011 |

According to the 2011 review of the global outsourcing sector done by Canadian-based ICT research and advisory committee XMG Global, the global outsourcing industry had a higher growth rate in 2010 compared to 2011. It brought in $374 billion in 2009, grew 13.9 percent at $425 billion last year, while it is predicted to post a 9.2 percent growth rate with $464 billion in 2011.

Arch rivals for the top offshoring destination title, China and India, continue to best each other in probing different markets, save for Europe and US.

XMG Global also predicts that the offshoring segment will bring in $144.8 billion in revenues, wherein the offshore market will be led by India with 42.5 percent ($61.5 billion) in revenues, followed by China with 31.5 percent ($45.7 billion), and Philippines at the third spot, with a revenue of $10.7 billion or 7.4 percent share.

Lauro Vives, XMG Global’s chief analyst, said “The US economy, which remains to be a large market for offshoring, is still on the road to recovery with a forecasted 2011 GDP growth rate of 2.6 percent, slowing down from last year’s 2.9 percent.”

The report also showed that the devaluation of the US dollar is affecting Philippine and Indian providers, which are dependent on the US market. Conversely, China is unscathed by the matter for it exports services to East Asian clients, even if Japan is at the wake of the 2011 earthquake.

XMG added that China is cashing in on the domestic BPO market to excel globally, and that major service providers in India that depended on high earnings from US and UK, namely Tata, Infosys, Wipro and Satyam, are looking into the growing domestic market.

The Philippines is also trying to increase its offshoring market shares by capitalizing on multilingual services. Proof of this is the Board of Investments partnership with IBM Philippines to improve programs locally for business process outsourcing.


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