The IT boom in the subcontinent has boosted wages, so that some Western companies are turning to new outsourcing markets, according to industry analyst IDC.
At present, the US is the biggest investor in Indian IT-enabled services. According to Reuters, software engineers with two years experience in India are paid about one fifth of what the equivalent US employee would demand – around 25,000 rupees per month, or $533.
Needless to say, outsourcing is not popular among workers and unions in the US and Western Europe. And it seems that similar concerns may be growing in India.
Wired News cites IDC research as evidence that the major US players are now looking to outsource their outsourced services – to countries with even lower labour costs. If the trend continues, India may face its own employment crisis.
The beneficiaries of the change in focus are, according to Wired, Romania, Russia, Hungary, the Czech Republic, the Philippines, Singapore, Thailand and Vietnam.
Outsourcing in general seems to be in good health, however: a report published yesterday by IDC reveals that the 100 largest worldwide outsourcing contracts last year ranged in value from $80 million to $5 billion, with the highest-priced contracts covering the widest range of IT services.
Forty-three percent of the contracts were valued between $100 million and $249 million. This is a significant change from 2001, when contracts valued at less than $100 million represented the largest price grouping.
"Outsourcing vendors have a tremendous opportunity to expand their client base in these tough economic times by providing efficient, cost-effective outsourcing services," said David Tapper, program manager for IDC's IT Outsourcing and Utility Services research.
