The dominant role of outsourcing

By Samir Ahmed Purdue University, USA
8 December 2004, 18:00 PM
Recently India, China, Taiwan, even Sri Lanka have become big clients for large firms of US and UK in offshore outsourcing. This sort of a business is booming among our neighbours who are earning more foreign currency, providing service to the developed world. At the Gartner Inc. Outsourcing Summit 2003, Indian outsourcers dominated by showing videos and presenting their vast capabilities to the multinational companies who are potential offshore outsourcers. The main offshore outsource items are basically, service centres and application development. The four top firms of India earn about $3 billion a year and employ about 70, 000 people with two-thirds to three-quarters of their business with North American companies, with 80 per cent of that work in application development and maintenance. The Indian government is also helping this sector to develop by mounting a major campaign to coax North American outsourcers to India. India has become the second largest market for offshore outsourcing for the developed world.

This is really distressing, because our neighbouring countries are getting more influx of foreign currency while we are still laid back and being the typical Bangladeshis. I am sure that making a call centre or getting together some IT professionals to work on application development is not that hard. Last summer I was in Dhaka after a year abroad and was amazed to see the development in the IT sector. But this development is not enough. One of the main reasons for our slow progress, even after all the efforts is slow internet connection. We are not linked with the backbone optical connection, which has linked most of our neighbours. But, this is a problem for the application development, what about the call centres? Telecommunication in Bangladesh is not as bad as it used to be about 3 years back, but still entrepreneurs are overlooking the prospects of offshore outsourcing which US has started extensively. Dell, one of Americas largest computer manufacturers, has call centres located in Bangalore, and also other places in India. Why can't we do something like this? Manpower is definitely not the problem; the government should do something to attract more people to invest in this sector.

Outsourcing can actually save us from the bad trade deficit and improve our balance of payments. I urge all entrepreneurs to explore this sector of development that was being overlooked all this time, it's never too late. Bangladesh can also portray itself as an outsourcing service provider; all we have to do now is open our eyes.