BPO work is not low-value: Karnik

BPO work is not low-value: Karnik

‘Do not underestimate wealth creation’
NEW DELHI, DEC 21: Nasscom president Kiran Karnik has hit out at a section of the media for dubbing ITeS and BPO work done in India as “low value” and said contribution of the booming sector in terms of employment and wealth creation among younger generation cannot be underestimated.

At a function in Bangalore on Tuesday, Mr Karnik said a section of the media kept asking him as to “when are we going to move up the value-chain” in this space. “The work being done in India might be of a high-volume-low-margin activity, but the country must not give up something, which is a huge employment generator,” he said.

He pointed out that India’s ITeS/BPO sector had already taken up high-end and cutting-edge work, particularly business analytics, modelling, forecasting and predictive analytics and knowledge process outsourcing.

According to McKinsey, the sector is projected to generate $60 billion in revenues and employ 2.7 million people by 2010. Together, the IT-ITeS sector is expected to account for 7% of GDP by 2010, as opposed to the current 2.1%.

Mr Karnik also likened the major part of the industry to “Udupi hotels” that serve the masses, creating jobs for the younger generation. Young graduates were finding it difficult to get jobs earlier, but the scenario has changed with the advent of this industry.

The sector employs around 4.7 lakh people currently, with most of them being fresh graduates. He also said countries that outsource work to India are beginning to realise the “special value” IT offers. It’s not losing jobs in their countries, but creating new jobs, a whole range of new work by outsourcing. The cost advantage that India has would remain so for many years to come. Quality of service, speed and time-to-market advantages in India are driving outsourcing growth in this country, Mr Karnik added.