India's IT-BPO market to touch USD 285 billion by 2020: Report

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The IT-BPO industry in India has achieved impressive growth rates over the past decade which currently stands at USD 71.6 billion in 2009, as per an estimate of the IT-BPO market in 2009. However, NASSCOM in its latest announcement has pegged the IT-BPO sector at USD 64 billion as on 2009.

The report reveled that India the current market leader in global sourcing supply, serving approximately 51 percent of overall global sourcing demand is expected to retain its leadership position by 2020.

Speaking at the global launch of the report, Kumar Parakala, Global Head of Sourcing Advisory; COO, Advisory, KPMG in India, said, "India is expected to achieve double digit growth rates in the IT-BPO industry, with a focus on innovation. However, the country needs to sustain its cost competitiveness and develop the requisite skills of its large workforce. India could also develop complementary skills in hardware, so that it can showcase a more diversified portfolio of products and services. "

The report also highlighted that the composition of demand will undergo a change from 2008 to 2020. The contribution of some of the developed countries like Japan, Australia and New Zealand in the regional demand for IT-BPO service is likely to decrease.

However, the contribution of developing countries like India and Thailand is expected to increase in the coming years. Newer countries such as Sri Lanka, Pakistan and Bangladesh are also expected to make their mark on the global sourcing supply landscape by 2020.

One of the focus areas of the KPMG- ASOCIO report was to identify the potential for effective collaboration among countries of the Asia-Oceania region.

The report emphasizes that if diversity within the region is effectively leveraged it could lead to collaborative growth.

Collaboration is likely to act as a facilitator for nations to address common challenges, leverage each others' competitive advantage and thereby aim for a much larger target market in the Information, Communication and Technology (ICT) industry by 2020.

"ICT based transformation would be a major enabler of socio-economic transformation of Asia .We foresee an emergence of a diverse set of globally competitive IT organizations in the region, which would be the key-enablers of this IT-based transformation," said Ashank Desai, President, Asian-Oceanian Computing Industry Organization (ASOCIO).

"To accelerate the pace of this transformation there is an urgent necessity of collaboration amongst all the players - Industry, Academia and Government and others - in the regional IT eco-system," Desai added.

Even as total demand for global sourcing services is expected to grow by 4.9 percent every year from 2008 to 2020, demand from Asia-Oceania countries is expected to grow by around 7 percent every year in the same period.

This will take the contribution of Asia-Oceania countries in the total global sourcing demand from 20 percent in 2008 to around 26 percent by 2020.

On the supply side too, Asia-Oceania is expected to dominate the global services sourcing industry. The share of countries in the region is likely to reach around 74.5 percent in 2020, from around 73.1 percent in 2008.

"While most economies are struggling with recessionary times, Asia-Oceania nations have already started experiencing an upturn. ICT is being used as a key enabler for growth, which is helping these economies move out of the downturn at a faster pace. ICT led growth is expected to push Asia-Oceania to greater heights, with some economies of the region achieving super-power status by 2020," added Kumar Parakala.

KPMG is the global network of professional services firms of KPMG International.