Medium IT/ITES companies may move overseas ..

India evolved as a preferred destination and a strong hub for IT / ITES industries considering the easy and affordable availability of educated English speaking talent pool & skilled manpower.

Over a period of time cost of manpower, cost of doing business, rising infrastructure costs and availability of skilled manpower has emerged as pain areas for these business, and it seems that our countries prominence as an IT Hub is on decline path. India’s prominence as an IT/ITeS hub may be declining owing to diminishing employable talent pool, high cost of doing business due to inefficiencies of power, transport, security, concentration in metros due to inadequate infrastructure in other towns etc.

On manpower aspects – ITeS firms are finding the retention of the suitably trained employees a big problem. Apart from this, the deficient infrastructure, law & order issues, and shrinking margins in the light of increasing costs have forced the Indian firms, specially the medium enterprises in ITES  to explore emerging geographies – destination like Philippines, Philippines, Vietnam, China, Poland, Hungary, Mexico, Brazil, Egypt.

These concerns has came out as the findings from a just concluded survey by – ASSOCHAM (The Associated Chambers of Commerce and Industry of India ).

According to the ASSOCHAM Eco Pulse (AEP) Study titled “Sustaining India’s IT/ITeS Leadership”, the prevailing macroeconomic and sectoral conditions have been resulting in a shifting of ITeS/BPO industry away from India to Philippines-especially from Hyderabad and Bangalore. Such a trend is yet not being noticed in the National Capital Region and Pune.

Additional job creation in the Indian IT/ITeS sector was estimated as 2.4 lakhs during the 2010-11 fiscal. This was about ten percent of the present level of employment in the sector. Therefore, the flight of smaller software firms outside the country would affect the growth and employment prospectus enormously.

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