The Hindu : Business : Tier-II cities to corner 40% of BPO jobs

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Tuesday, May 06, 2008
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Tier-II cities to corner 40% of BPO jobs

At present big cities call the shots

— PHOTO: KAMAL NARANG

PARADIGM SHIFT: (from left) Som Mittal, President; Ganesh Natarajan, Chairman, Nasscom, and Saurine Doshi, Partner, AT Kearney at a press conference in New Delhi on Monday.

MUMBAI: Second tier cities are likely to account for about 40 per cent of the total projected IT-BPO jobs by 2018 if the government in tandem with the industry provides a conducive environment, a NASSCOM-AT Kearney study on ‘Location Roadmap for IT-BPO Growth’ has said.

However, big cities — Mumbai, Chennai, Bangalore, Hyderabad, Kolkata, the National Capital Region (NCR) and Pune — are still the preferred destinations for setting up an IT or a BPO company, said the study.

These centres are closely followed by Ahmedabad, Kochi, Bhubaneswar, Chandigarh, Coimbatore, Indore, Jaipur, Lucknow, Madurai, Mangalore, Nagpur, Thiruvananthapuram, Vadodara, Tiruchirapalli and Visakhapatnam, it said.

“If the industry follows a balanced growth, these non-leading cities could provide three million direct jobs, 40 per cent of the projected employment by 2018,” it added.

At present, the leading locations account for over 85 per cent of IT sector employment and over 90 per cent of the BPO employment in the country, it said.

Infrastructure

“The development of only a few select set of cities has put severe pressure on the infrastructure, costs and also increased migration of resources,” National Association of Software and Service Companies (Nasscom) President Som Mittal said.

There is a lot of potential in the next set of locations if the government, IT-BPO companies and infrastructure providers pitch in to create a conducive environment, he said. With the maturing industry, it is imperative to expand the geographical spread of IT-BPO growth to enable more balanced economic development, lower migration across cities and reduce the burden on the stretched infrastructure in the current hubs, he added.

“The Indian IT- BPO sector has been a front-runner of economic development in select cities. We now see the time as being right to spread this development to a new set of locations, provided the requirements of the industry can be met,” Nasscom Chairman Ganesh Natarajan said.

The study, released here on Monday, provides a gap analysis along with advantages and shortcomings of these 50 locations. The locations are analysed on the basis of talent pool available, infrastructure, social environment, business enablers, government support and cost of operations. — PTI

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