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Tuesday, November 3, 2009
Captives in India: Is the Honeymoon Over?
Captives in India: Is the Honeymoon Over?
Captives across IT, BPO and KPO sectors have all been hit somewhat similarly; 62 percent of IT captives, 67 percent of BPO captives and 55 percent of KPO captives studied have had a difficult time in the past four years.
Read full article here
http://www.globalservicesmedia.com/Content/general200911027647.asp
Captives across IT, BPO and KPO sectors have all been hit somewhat similarly; 62 percent of IT captives, 67 percent of BPO captives and 55 percent of KPO captives studied have had a difficult time in the past four years.
Read full article here
http://www.globalservicesmedia.com/Content/general200911027647.asp
Will Outsourcing Stay Close To Home?
Monday, November 02, 2009
Will Outsourcing Stay Close To Home?
Obama's stance is supported further by recent U.S. international tax reforms proposed by the administration. The reforms, if passed, would have the effect of eliminating or significantly reducing tax benefits of offshore planning structures currently enjoyed by many U.S.-based multinational corporations
By Don Jones, BDO Seidman
The calls for domesticating outsourced labor have increased in recent years. In fact, many predict that now is the time when we begin to see U.S. companies bring their IT and business process outsourcing functions closer to home. Proponents identify several recent shifts in the economic and political landscapes that support this viewpoint.
The first factor is the recent layoffs in the technology and financial services sectors in the U.S. resulting from the downturn in the economy. There are significantly more people on the market as a result of these layoffs. It is expected that increased capacity for skilled talent will enable U.S. companies to tap into the U.S. labor market much more easily than in the past. Downward pressure on wages as a result of this dynamic will contribute to the attractiveness of the U.S. as an outsourcing destination.
It is worth noting that critics of this view point to the fact that certain skill sets needed for jobs currently outsourced outside the U.S. are not aligned with the talent pool within the U.S. Retooling of the talent pool will be necessary, which would need to start with revamping university curriculums and trade school programs. The degree to which the surge in capacity in the U.S. labor market will translate into a decrease in the cost of labor disparity with outsourcing destinations outside the U.S., however, remains to be seen.
Second, few people doubt that President Obama’s stance on keeping jobs in the US will be among the highest priorities on his administration’s agenda. This may result in some rather lucrative government incentives available for U.S. companies. One incentive that Obama promises to companies operating in the U.S. is the extension of the research and development tax credit. This credit is available to companies for research and development activities that are performed in the U.S. and can amount to as much as a two to three percentage point reduction in the company’s federal income tax rate. States such as California allow a research and development credit as well.
Obama’s stance is supported further by recent U.S. international tax reforms proposed by the administration. The reforms, if passed, would have the effect of eliminating or significantly reducing tax benefits of offshore planning structures currently enjoyed by many U.S.-based multinational corporations. For instance, U.S. multinational companies currently enjoy the benefits of having the majority of their income taxed outside the U.S. by shifting functions such as IT outsourcing, research and development and call centers outside the U.S. Obama plans to significantly erode these structures by taxing more of this income that has been moved offshore.
Finally, the rising costs of implementing and maintaining outsourcing relationships in geographically distant jurisdictions will cause business leaders to rethink their outsourcing strategies. Leaders of high technology companies have held that certain countries, such as India and China, historically were regarded as favorable countries to outsource skilled services such as manufacturing, IT, programming, R&D, distribution and call centers. The declining strength of the dollar, rising wages, labor turnover and bottlenecks in urban infrastructure no doubt will aggravate existing outsourcing arrangements.
Maturing tax laws and the increased aggressiveness of foreign tax authorities’ audit practices are additional factors contributing to the higher cost of outsourcing business functions overseas. For instance, recent legislation passed in India had a deep impact on U.S. technology companies operating in India. The provisions most likely to impact U.S. high technology companies are:
India will now tax gains on share transfers of offshore companies. The tax will be retroactive to transactions entered into from June, 2002, subjecting many prior year cross border transactions to Indian tax. This comes in the wake of the Indian Department of Revenue’s realization that it could collect millions of rupees in tax revenue from these transactions.
The new laws have not extended the tax holiday for units registered under the Software Technology Parks and Export Oriented Units regulations. As a result, high technology companies saw their tax holidays in India expire on March 31, 2009.
The short-term capital gains rate has been increased from 10% to 15%.
Packaged software will now be subject to the same 12% excise tax that has historically been assessed on customized software. It was previously taxed at 8%.
The new laws added a wider array of services subject to the 12.36% Service Tax.
The two main additional services impacting the high technology industry are services relating to information technology software for use in the course or furtherance of business or commerce, and Internet telecommunications services. This includes services provided in relation to Internet backbone services, carrier services, Internet traffic services, telecommunications services and access services.
The tax return filing deadline has been shortened. The due date was moved from October 31 to September 30.
As problems mount with the costs of maintaining foreign outsourcing arrangements, more U.S. multinational companies are testing ways to house these activities in the U.S. for the lowest possible cost. Factors such as flexible work environments, home office arrangements and the ongoing elimination of language and cultural barriers are promising attributes for retaining functions in the U.S. that were previously performed offshore. U.S. multinationals are increasingly seeing the benefits of low labor costs offshore outweighed by poor customer service, which may make retaining functions like IT and call centers in the U.S. more attractive in the long run.
Despite the fact that many believe we will see an increase of outsourcing IT and BPO functions to the U.S., there are still many attractive reasons to consider outsourcing these functions offshore. It is generally easier to find the appropriate talent in the major offshore jurisdictions. For example, China and India alone produce more than 10 times the engineering graduates per year than the U.S. does. Proponents of outsourcing offshore point out that the labor disparity is still wide enough to compensate for the shortfalls discussed above.
In the long run, the shifting global economy will probably dictate where these functions are performed. As business becomes more global and as emerging markets mature, the disparity of outsourcing destinations might eventually shrink enough not to matter.
Don Jones is a Partner in the Technology Practice of BDO Seidman, LLP, a national accounting firm providing assurance, tax, financial advisory and consulting services.
http://www.globalservicesmedia.com/Content/general200911027644.asp
Will Outsourcing Stay Close To Home?
Obama's stance is supported further by recent U.S. international tax reforms proposed by the administration. The reforms, if passed, would have the effect of eliminating or significantly reducing tax benefits of offshore planning structures currently enjoyed by many U.S.-based multinational corporations
By Don Jones, BDO Seidman
The calls for domesticating outsourced labor have increased in recent years. In fact, many predict that now is the time when we begin to see U.S. companies bring their IT and business process outsourcing functions closer to home. Proponents identify several recent shifts in the economic and political landscapes that support this viewpoint.
The first factor is the recent layoffs in the technology and financial services sectors in the U.S. resulting from the downturn in the economy. There are significantly more people on the market as a result of these layoffs. It is expected that increased capacity for skilled talent will enable U.S. companies to tap into the U.S. labor market much more easily than in the past. Downward pressure on wages as a result of this dynamic will contribute to the attractiveness of the U.S. as an outsourcing destination.
It is worth noting that critics of this view point to the fact that certain skill sets needed for jobs currently outsourced outside the U.S. are not aligned with the talent pool within the U.S. Retooling of the talent pool will be necessary, which would need to start with revamping university curriculums and trade school programs. The degree to which the surge in capacity in the U.S. labor market will translate into a decrease in the cost of labor disparity with outsourcing destinations outside the U.S., however, remains to be seen.
Second, few people doubt that President Obama’s stance on keeping jobs in the US will be among the highest priorities on his administration’s agenda. This may result in some rather lucrative government incentives available for U.S. companies. One incentive that Obama promises to companies operating in the U.S. is the extension of the research and development tax credit. This credit is available to companies for research and development activities that are performed in the U.S. and can amount to as much as a two to three percentage point reduction in the company’s federal income tax rate. States such as California allow a research and development credit as well.
Obama’s stance is supported further by recent U.S. international tax reforms proposed by the administration. The reforms, if passed, would have the effect of eliminating or significantly reducing tax benefits of offshore planning structures currently enjoyed by many U.S.-based multinational corporations. For instance, U.S. multinational companies currently enjoy the benefits of having the majority of their income taxed outside the U.S. by shifting functions such as IT outsourcing, research and development and call centers outside the U.S. Obama plans to significantly erode these structures by taxing more of this income that has been moved offshore.
Finally, the rising costs of implementing and maintaining outsourcing relationships in geographically distant jurisdictions will cause business leaders to rethink their outsourcing strategies. Leaders of high technology companies have held that certain countries, such as India and China, historically were regarded as favorable countries to outsource skilled services such as manufacturing, IT, programming, R&D, distribution and call centers. The declining strength of the dollar, rising wages, labor turnover and bottlenecks in urban infrastructure no doubt will aggravate existing outsourcing arrangements.
Maturing tax laws and the increased aggressiveness of foreign tax authorities’ audit practices are additional factors contributing to the higher cost of outsourcing business functions overseas. For instance, recent legislation passed in India had a deep impact on U.S. technology companies operating in India. The provisions most likely to impact U.S. high technology companies are:
India will now tax gains on share transfers of offshore companies. The tax will be retroactive to transactions entered into from June, 2002, subjecting many prior year cross border transactions to Indian tax. This comes in the wake of the Indian Department of Revenue’s realization that it could collect millions of rupees in tax revenue from these transactions.
The new laws have not extended the tax holiday for units registered under the Software Technology Parks and Export Oriented Units regulations. As a result, high technology companies saw their tax holidays in India expire on March 31, 2009.
The short-term capital gains rate has been increased from 10% to 15%.
Packaged software will now be subject to the same 12% excise tax that has historically been assessed on customized software. It was previously taxed at 8%.
The new laws added a wider array of services subject to the 12.36% Service Tax.
The two main additional services impacting the high technology industry are services relating to information technology software for use in the course or furtherance of business or commerce, and Internet telecommunications services. This includes services provided in relation to Internet backbone services, carrier services, Internet traffic services, telecommunications services and access services.
The tax return filing deadline has been shortened. The due date was moved from October 31 to September 30.
As problems mount with the costs of maintaining foreign outsourcing arrangements, more U.S. multinational companies are testing ways to house these activities in the U.S. for the lowest possible cost. Factors such as flexible work environments, home office arrangements and the ongoing elimination of language and cultural barriers are promising attributes for retaining functions in the U.S. that were previously performed offshore. U.S. multinationals are increasingly seeing the benefits of low labor costs offshore outweighed by poor customer service, which may make retaining functions like IT and call centers in the U.S. more attractive in the long run.
Despite the fact that many believe we will see an increase of outsourcing IT and BPO functions to the U.S., there are still many attractive reasons to consider outsourcing these functions offshore. It is generally easier to find the appropriate talent in the major offshore jurisdictions. For example, China and India alone produce more than 10 times the engineering graduates per year than the U.S. does. Proponents of outsourcing offshore point out that the labor disparity is still wide enough to compensate for the shortfalls discussed above.
In the long run, the shifting global economy will probably dictate where these functions are performed. As business becomes more global and as emerging markets mature, the disparity of outsourcing destinations might eventually shrink enough not to matter.
Don Jones is a Partner in the Technology Practice of BDO Seidman, LLP, a national accounting firm providing assurance, tax, financial advisory and consulting services.
http://www.globalservicesmedia.com/Content/general200911027644.asp
The H-1B Visa Lull Is Only Temporary
Tuesday, November 03, 2009
The H-1B Visa Lull Is Only Temporary
"Unless we are heading into a Great Depression, pressure on the H-1B visa program will increase as the economy rebounds," says Peter Bendor-Samuel, Founder of the Everest Group, an outsourcing consulting firm in Dallas. "It's almost impossible for me to believe demand [for H-1Bs] will lessen long term. I find it mildly surprising there are some extras left now."
Outsourcing companies that have been among the top users of the H-1B visa program for highly skilled workers say a dip in demand for the program won't last. As of Oct. 25, employers had filed about 72,800 H-1B visa petitions for 2009, leaving more than 12,000 still available some six months after the U.S. government started accepting applications. That's a marked contrast from recent years, when companies snapped up the 85,000 available visas within days of their Apr. 1 offer date.
But the rush for H-1B visas will return as the economy recovers, especially among outsourcing firms that are now the program's heaviest users, say tech industry experts.
"Unless we are heading into a Great Depression, pressure on the H-1B visa program will increase as the economy rebounds," says Peter Bendor-Samuel, Founder of the Everest Group, an outsourcing consulting firm in Dallas. "It's almost impossible for me to believe demand [for H-1Bs] will lessen long term. I find it mildly surprising there are some extras left now."
Part of the Business Model
Bendor-Samuel points to what he considers secular trends that will keep demand strong for H-1B visas: an increasing proportion of foreign nationals studying math and science in U.S. universities and the impending retirement of many skilled workers. "Also, while it's politically incorrect to say so, people with 10 to 30 years of [tech] experience are having trouble," he adds. "Employers are under financial pressure to hire cheaper workers coming out of college."
H-1B visas have become especially important to the business models of outsourcing firms, especially those based in India, including Tata Consultancy Services (TCS.NS), Infosys Technologies (INFY), and Wipro Technologies (WIT). In fiscal years 2007 and 2008, these firms dominated the list of the program's top users. These firms typically bring workers from overseas to the U.S. for a short period, often 18 months, and then employ them again in their home countries.
Som Mittal, president of the NASSCOM trade group, which represents India's software and services companies, says that H-1B visas remain important for the services industry. "We need for people to travel back and forth between the U.S. and India to consult on and complete projects," he says. "The reduction in [H-1B] applications is completely linked to the economic downturn. I think that as the economy turns around, the [H-1B visa] cap will again be reached quickly."
Lots of Unknowns
For several years the Indian government has encouraged the U.S. government to open up more avenues to rotate workers into and out of the U.S. more easily. On Oct. 26 in Delhi, Anand Sharma, India's commerce and industry minister, met with U.S. Trade Representative Ron Kirk to discuss U.S.-India trade relations. It's unclear what specific requests were made to Kirk, and Sharma's office did not respond to e-mail messages seeking comment. U.S. visa policy was part of the discussion, however. "The issue of H-1B visas was raised, but Ambassador Kirk noted at his press conference in Delhi that the issue falls under immigration policy that lies in the hands of Congress, and not under USTR jurisdiction," Kirk spokeswoman Carol Guthrie said in an e-mail. "He promised to share with the appropriate parties that Indian leaders raised concerns at the Trade Policy Forum."
It is yet unknown how many H-1B petitions employers have submitted for fiscal years 2009 and 2010; that information is expected to become available from the U.S. Citizenship & Immigration Services (USCIS) beginning in the spring. Cognizant (CTSH) and Infosys declined to comment on their use of the H-1B program. Representatives for Tata and Satyam Computer Services (SAY) did not return messages seeking comment.
Experts say outsourcers are increasingly using what are known as L-1 visas—short-term visas for intracompany transfers. These visas involve no annual cap and no requirement to pay employees the prevailing wage. Overall use of the H-1B program has been decreasing slowly while it has increased for L-1s. In 2008 a total of 129,464 H-1B visas were issued (which includes those given to employers exempt from the 85,000 cap, such as colleges and universities and nonprofit research organizations), 7% fewer than the 138,965 in 2004. L-1 use, meanwhile, increased 34% from 2004 (62,700) to 2008 (84,078). Outsourcers find the L-1 program easier to use and less politically sensitive than the H-1B program, says Ron Hira, an assistant professor of public policy at Rochester Institute of Technology.
Opening U.S. Centers
HCL America, part of Delhi-based HCL Technologies (HCLT.NS), is one company increasingly relying on the L-1 visa program. Last year, the company used just 85 H-1B visas but 2,935 L-1s. For fiscal year 2009, the company applied for slightly fewer L-1s and only 16 H-1B visas. Shami Khorana, president of HCL America, says the L-1 visa better suits his company's needs. "The intent is for [L-1 visa holders] to gain knowledge and training, and then to take that knowledge back so that work can be done from India," he says. L-1 visa workers typically stay in the U.S. for about two months, he said.
Khorana says that at the same time HCL America is establishing centers in the U.S. to help service clients who want work to be done locally and in the same time zone. The company opened one center in April in Cary, N.C. About 250 people now work in that space, which has capacity for 500 people.
HCL competitor Wipro has been a heavier user of the H-1B visa program in recent years. It used 2,678 H-1B visas in 2008, up from 2,567 in 2007. But spokesman Sridhar Ramasubbu says the company applied for far fewer this year. He says he's not certain whether the reduction in applications is more a result of the recession or the increasingly global nature of Wipro's workforce. "We're propagating a global delivery model," he says. "We're operating in about 54 countries, and the U.S. is [only] one of them."
Up to the Customers
Ramasubbu says local U.S. hires currently represent 23% of Wipro's U.S. workforce, and he expects that number to increase to more than 40% within a few years. "We are committed to training engineers in the U.S. and generating jobs," he says. At the same time, "we are not saying we'll use more or fewer visas. We leave that up to our customers."
By Moira Herbst Source: BusinessWeek
http://www.globalservicesmedia.com/Content/general200911037656.asp
The H-1B Visa Lull Is Only Temporary
"Unless we are heading into a Great Depression, pressure on the H-1B visa program will increase as the economy rebounds," says Peter Bendor-Samuel, Founder of the Everest Group, an outsourcing consulting firm in Dallas. "It's almost impossible for me to believe demand [for H-1Bs] will lessen long term. I find it mildly surprising there are some extras left now."
Outsourcing companies that have been among the top users of the H-1B visa program for highly skilled workers say a dip in demand for the program won't last. As of Oct. 25, employers had filed about 72,800 H-1B visa petitions for 2009, leaving more than 12,000 still available some six months after the U.S. government started accepting applications. That's a marked contrast from recent years, when companies snapped up the 85,000 available visas within days of their Apr. 1 offer date.
But the rush for H-1B visas will return as the economy recovers, especially among outsourcing firms that are now the program's heaviest users, say tech industry experts.
"Unless we are heading into a Great Depression, pressure on the H-1B visa program will increase as the economy rebounds," says Peter Bendor-Samuel, Founder of the Everest Group, an outsourcing consulting firm in Dallas. "It's almost impossible for me to believe demand [for H-1Bs] will lessen long term. I find it mildly surprising there are some extras left now."
Part of the Business Model
Bendor-Samuel points to what he considers secular trends that will keep demand strong for H-1B visas: an increasing proportion of foreign nationals studying math and science in U.S. universities and the impending retirement of many skilled workers. "Also, while it's politically incorrect to say so, people with 10 to 30 years of [tech] experience are having trouble," he adds. "Employers are under financial pressure to hire cheaper workers coming out of college."
H-1B visas have become especially important to the business models of outsourcing firms, especially those based in India, including Tata Consultancy Services (TCS.NS), Infosys Technologies (INFY), and Wipro Technologies (WIT). In fiscal years 2007 and 2008, these firms dominated the list of the program's top users. These firms typically bring workers from overseas to the U.S. for a short period, often 18 months, and then employ them again in their home countries.
Som Mittal, president of the NASSCOM trade group, which represents India's software and services companies, says that H-1B visas remain important for the services industry. "We need for people to travel back and forth between the U.S. and India to consult on and complete projects," he says. "The reduction in [H-1B] applications is completely linked to the economic downturn. I think that as the economy turns around, the [H-1B visa] cap will again be reached quickly."
Lots of Unknowns
For several years the Indian government has encouraged the U.S. government to open up more avenues to rotate workers into and out of the U.S. more easily. On Oct. 26 in Delhi, Anand Sharma, India's commerce and industry minister, met with U.S. Trade Representative Ron Kirk to discuss U.S.-India trade relations. It's unclear what specific requests were made to Kirk, and Sharma's office did not respond to e-mail messages seeking comment. U.S. visa policy was part of the discussion, however. "The issue of H-1B visas was raised, but Ambassador Kirk noted at his press conference in Delhi that the issue falls under immigration policy that lies in the hands of Congress, and not under USTR jurisdiction," Kirk spokeswoman Carol Guthrie said in an e-mail. "He promised to share with the appropriate parties that Indian leaders raised concerns at the Trade Policy Forum."
It is yet unknown how many H-1B petitions employers have submitted for fiscal years 2009 and 2010; that information is expected to become available from the U.S. Citizenship & Immigration Services (USCIS) beginning in the spring. Cognizant (CTSH) and Infosys declined to comment on their use of the H-1B program. Representatives for Tata and Satyam Computer Services (SAY) did not return messages seeking comment.
Experts say outsourcers are increasingly using what are known as L-1 visas—short-term visas for intracompany transfers. These visas involve no annual cap and no requirement to pay employees the prevailing wage. Overall use of the H-1B program has been decreasing slowly while it has increased for L-1s. In 2008 a total of 129,464 H-1B visas were issued (which includes those given to employers exempt from the 85,000 cap, such as colleges and universities and nonprofit research organizations), 7% fewer than the 138,965 in 2004. L-1 use, meanwhile, increased 34% from 2004 (62,700) to 2008 (84,078). Outsourcers find the L-1 program easier to use and less politically sensitive than the H-1B program, says Ron Hira, an assistant professor of public policy at Rochester Institute of Technology.
Opening U.S. Centers
HCL America, part of Delhi-based HCL Technologies (HCLT.NS), is one company increasingly relying on the L-1 visa program. Last year, the company used just 85 H-1B visas but 2,935 L-1s. For fiscal year 2009, the company applied for slightly fewer L-1s and only 16 H-1B visas. Shami Khorana, president of HCL America, says the L-1 visa better suits his company's needs. "The intent is for [L-1 visa holders] to gain knowledge and training, and then to take that knowledge back so that work can be done from India," he says. L-1 visa workers typically stay in the U.S. for about two months, he said.
Khorana says that at the same time HCL America is establishing centers in the U.S. to help service clients who want work to be done locally and in the same time zone. The company opened one center in April in Cary, N.C. About 250 people now work in that space, which has capacity for 500 people.
HCL competitor Wipro has been a heavier user of the H-1B visa program in recent years. It used 2,678 H-1B visas in 2008, up from 2,567 in 2007. But spokesman Sridhar Ramasubbu says the company applied for far fewer this year. He says he's not certain whether the reduction in applications is more a result of the recession or the increasingly global nature of Wipro's workforce. "We're propagating a global delivery model," he says. "We're operating in about 54 countries, and the U.S. is [only] one of them."
Up to the Customers
Ramasubbu says local U.S. hires currently represent 23% of Wipro's U.S. workforce, and he expects that number to increase to more than 40% within a few years. "We are committed to training engineers in the U.S. and generating jobs," he says. At the same time, "we are not saying we'll use more or fewer visas. We leave that up to our customers."
By Moira Herbst Source: BusinessWeek
http://www.globalservicesmedia.com/Content/general200911037656.asp
China Plans to Lure Outsourcing Industry
Tuesday, November 03, 2009 China Plans to Lure Outsourcing Industry
The city is expected to attract 30 to 40 billion dollars in service outsourcing business and help create jobs for one million people by 2020, equivalent to that of India as a whole in 2007
A picturesque city that lies along the Taihu Lake resort of the Jiangsu province, is planning to build a "little India" in years to come in order to become a major service outsourcing center. Wuxi is traditionally a manufacturing city, but with focus on environmental protection, and especially after a serious blue-green algae outbreak in Taihu Lake, city leaders started to study how to transform the city's development.
Wuxi decided to replace manufacturing with the service outsourcing industry, which has far less pollution and consumes much less energy, a China Daily reports.
The city is expected to attract 30 to 40 billion dollars in service outsourcing business and help create jobs for one million people by 2020, equivalent to that of India as a whole in 2007. The advancement of the service outsourcing industry cannot survive without a large talent pool. But the city three years ago learned that fewer than 2,000 students in the city were studying software and information technology fields.
As a result, Wuxi established a goal to build a total area of six million sq m for software service outsourcing within three years, and encouraged enterprises to cultivate and import skilled workers.
The local government joined India's National Institute of Information Technologies (NIIT), the world's second-largest educational institution, to establish the NIIT (China) Outsourcing College in Wuxi as a training base for the city's outsourcing businesses.
While the domestic macro-economy continues to be affected by the global financial crisis, outsourcing is maintaining robust growth in Wuxi. The city signed 1.14 billion dollars in contracts from January to July, up 110 percent year-on-year.
After India became world's largest service-outsourcing base, many East Asian countries including Philippines, Singapore and Vietnam have begun competing for more market share.
Source: ANI
http://www.globalservicesmedia.com/Content/general200911027648.asp
The city is expected to attract 30 to 40 billion dollars in service outsourcing business and help create jobs for one million people by 2020, equivalent to that of India as a whole in 2007
A picturesque city that lies along the Taihu Lake resort of the Jiangsu province, is planning to build a "little India" in years to come in order to become a major service outsourcing center. Wuxi is traditionally a manufacturing city, but with focus on environmental protection, and especially after a serious blue-green algae outbreak in Taihu Lake, city leaders started to study how to transform the city's development.
Wuxi decided to replace manufacturing with the service outsourcing industry, which has far less pollution and consumes much less energy, a China Daily reports.
The city is expected to attract 30 to 40 billion dollars in service outsourcing business and help create jobs for one million people by 2020, equivalent to that of India as a whole in 2007. The advancement of the service outsourcing industry cannot survive without a large talent pool. But the city three years ago learned that fewer than 2,000 students in the city were studying software and information technology fields.
As a result, Wuxi established a goal to build a total area of six million sq m for software service outsourcing within three years, and encouraged enterprises to cultivate and import skilled workers.
The local government joined India's National Institute of Information Technologies (NIIT), the world's second-largest educational institution, to establish the NIIT (China) Outsourcing College in Wuxi as a training base for the city's outsourcing businesses.
While the domestic macro-economy continues to be affected by the global financial crisis, outsourcing is maintaining robust growth in Wuxi. The city signed 1.14 billion dollars in contracts from January to July, up 110 percent year-on-year.
After India became world's largest service-outsourcing base, many East Asian countries including Philippines, Singapore and Vietnam have begun competing for more market share.
Source: ANI
http://www.globalservicesmedia.com/Content/general200911027648.asp
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