Outsourcing Will Reach $100 Billion By 2010

Outsourced services will earn $110 billion worldwide by 2010, according to report released by The National Association of Software and Service Companies, or NASSCOM, and consulting firm McKinsey and Co. on Dec. 12.

"India has the potential to capture more than 50% of this opportunity," said Noshir Kaka, a partner at McKinsey who helped prepare the report.

Software and customer services outsourced to India are forecast to grow 25% a year by the end of the decade to $60 billion. NASSCOM said India now gets 65% of the global offshore software market and 46% in services.

Software and services now add about $17 billion to the economy and directly employ 700,000 people, the report said. But to grow further, the report says, India will have to train more skilled workers and drastically improve its infrastructure.

Executives from McKinsey say that India needs to create 10 to 12 "knowledge cities" with housing, office space, good roads and airports to meet the needs of technology firms and their employees. "We can't take another 1.6 million workers and add them to our cities now. Our cities are at a choking point," said Jayant Sinha, a partner at the consulting firm. The report also said that the sector could employ about 2.3 million workers by 2010, but projects a shortfall of 500,000 skilled workers unless infrastructure and education is upgraded.

Copyright Agence France-Presse, 2005

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