Outsourcing; Where To?
The world economy has always been international. Offshore outsourcing is not a new phenomenon. In our part of the world, outsourcing has been a prominent feature since at least the 18th century, when the British began to explore the Subcontinent in search of riches and power. Only the advent of IT has changed practices, as well as types and directions of economic flows.
In the old times, when Vasco da Gama landed on the shores of Southern Asia, it was for "spices and Christ"; later on, it was for "Made in Sialkot" sports goods for the USA and Europe; now it is for software, back office operations and call centres.
One of the most important issues in developing countries rich in human resources, like Pakistan, is to understand IT outsourcing. Developed countries are doing it to lower costs and to free scarce resources back home for high value-added work, and work concentrating on core competencies. On our end of the equation, outsourcing is important in order to boost the economy, reduce unemployment, and develop the local IT services industry. Both sides can mutually benifit.
Untill September 11, high tech companies in the developing world, including Pakistan, were admired extensively for the quality of work they produced and for their technological edge. But the economic slow down and increasing layoffs after the heinous events of September 11 changed things in more than one way. Moreover, the workforce in USA and Europe is seeing offshore outsourcing differently: they complain that jobs meant for them are moved outside their countries, for cost savings, to the extent that they have started influencing policy makers to check this practice. Their worries were confirmed by the US Bureau of Labour Statistics, which stated that in March 2003 alone 212,000 US computer and engineering professionals were unemployed.
Pakistan is one of the important destinations for outsourcing. The country has a good base of IT professionals, developed infrastructure, and friendly government policies and laws. The effect of "Pakistan's 60 fold rise in its budget for IT" has already started showing results. An employable workforce with good command of the English language is available at a very competitive cost. Pakistani universities and IT institutions in both public and private sectors have internationally standard curricula and are turning out many tens of thousands of IT graduates each year who are adept at turning their hands to anything from software development to running call centres.
The IT market has also matured, as local IT companies have been doing contract work for clients in developed countries for over a decade. But, sadly, the trend has not picked up as much as in neighbouring countries like India and China. Reasons are rather political and diplomatic than technological. Pakistan, relatively, is a smaller market. Pakistan has always been a frontline state to fight terrorism but ironically the image of the country in the world media is not very helpful either.
Clearly, Pakistan needs to catch and then hold the attention of big IT players. For that, we have to have a constant supply of skilled IT workers to meet the demand when it comes our way, now and in the future. Policymakers have to ensure sufficient planning is done to create the human/intellectual capital. This done, it will be difficult for anyone to ignore Pakistani talent that is untapped so far.
Outsourcing; Where To?
- » Published on August 01, 2006
- » Type: Opinion
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