China to overtake Indian IT Industry by 2011: Are you kidding ?


Outsourcing of work to low cost developing nations is growing rapidly even after constant challenges it faces from government and lawmakers of developed countries.
Last 6 years have seen India become the Outsourcing hub of the world and trend seem to be continuing for few years to come. The latest estimates released by National Association of Software and Services companies (Nasscom), projects revenues at $40 billion for this fiscal year. The report also says that, software and services sector should achieve $60bn in export revenue by 2009/2010. Having one of the youngest and largest English speaking well educated populations in the world is just a couple of reasons (of many) on why India is the front runner in this knowledge Industry.

However, some researches like the one prepared by IDC predict that China may overtake India in IT offshoring as early as 2011. Ofcourse, I do not buy that. Not because I am an Indian, but I sincerely think China does not have what it takes to overtake India in IT sector in next 4 years as put forth by the IDC Global Delivery Index.
Here is an excerpt from the IDC report.

IDC has developed a new Global Delivery Index (GDI),  which compares 35 cities in the Asia/Pacific as potential offshore delivery centers, based on a comprehensive set of criteria such as cost of labor, cost of rent, language skills and turnover rate. In its inaugural findings, Indian cities are highly ranked, while Chinese cities are on the rise and closely nipping at India’s heels. Examples of cities covered include Adelaide, Bangalore, Dalian, Hanoi, and Kuala Lumpur among many others.

Honestly speaking, Mumbai and Bangalore are not the cities that should be even considered now, as these places are completely saturated, but Tier I and II cities in India are having the biggest potential for growth. Cities like Pune, Ahmedabad, Cochin, Mysore, Chandigarh, Patna, Nagpur, and many more are the cities that need to be included in the Global Delivery Index. I bet they will rank much higher on this index than any of the other Asia-Pacific cities. Even if you consider the difference in cost of setting up delivery center in Between Bangalore and Pune/Ahmedabad, it would be less than a half. If you talk to most HR experts, they will tell you that you can find good people resources easily in Tier II cities as compared to Mumbai and Bangalore.

Yes, there are couple of things like wage inflation and infrastructure where Indian cities may not score too highly, but so many other positive factors make Indian Tier II cities a popular choice.

Here is the snapshot of top ten cities on GDI:
 Top 10 cities on Global Delivery Index

I have not seen the whole survey, these are just my initial reactions, however, I will try and get a copy of Global Delivery Index. It will be interesting to see the complete findings and basis on which they make their predictions.

  1. rohan says

    It’s not possible.

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