India Outsources Outsourcing

From Business Today Egypt

April 2008
India Outsources Outsourcing
With worldwide technology spending expected to approach $2 trillion in the next few years, India’s IT titans are building nests outside their borders and Egypt is a prime destination

By Ali El Bahnasawy

For companies who want to outsource back-office operations, India has developed into the market model. But in a world where high-tech spending by both governments and the private sector exceeded $1.7 trillion (LE 9.35 trillion) in 2007, and the size of the global IT outsourcing industry reached $70 billion (LE 385 billion) with a growth of 30% in 2006, even a huge nation like India, which dominates international IT outsourcing with a 2/3 share of the industry, is facing a talent crunch. The solution? Outsource outsourcing.

India-based companies that were once notorious for seducing call centers and IT departments away from the West are now re-exporting their services outside India. Even with India’s massive population, the demand for IT services exceeds the supply of qualified labor in the country’s human resources market. Fueled by local successes, Indian IT companies are now buying companies in America, Europe and Asia to support their extended operations and cater to more than half of the globe’s high-tech needs.

Egypt has been ranked the thirteenth most attractive destination to set up an offshore service, according to a study by A.T. Kearney, a global management consulting firm. The study, which looked at 50 countries, was based on the evaluation of three main factors: financial structure, availability of skilled workers and overall business environment. As a result of reforms to Egypt’s business climate — such as lowering the cost of employment, the increased availability of attractive business properties like Smart Village and flexible income tax regulations — in addition to burgeoning language and computer skills on the part of the Egyptian population, Egypt is becoming a prime destination for India’s IT giants, who are coming to boost the industry as well as take advantage of Egypt’s underutilized workforce.

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