Can China catch India as an outsourcing center
Is India's software services industry light years ahead of China? Or are the
Indians about to lose their lead to the up-and-coming Chinese? Over the past few
days, two very different answers. According to a new report from IDC, the
Indians have reason to worry. The research firm, headquartered in suburban
Boston, has announced that its analysts have come up with a new "Global Delivery
Index" that, according to an IDC statement, "compares 35 cities in the
Asia/Pacific as potential offshore delivery centers, based on a comprehensive
set of criteria such as cost of labor, cost of rent, language skills and
turnover rate." This new index puts Bangalore No. 1, with Mumbai No. 3 and Delhi
No. 4. (The only non-Indian city among the top four is Manila, at No. 2) But
"Chinese cities are on the rise and closely nipping at India's heels," IDC adds.
"IDC forecasts that Chinese cities will overtake Indian cities by 2011 due to
massive investments made ( e.g. infrastructure, English language, Internet
connections, technical skills, etc) which are favorable towards offshoring."
But then there's this next-day story in India's the Business
Standard. "China outsourcing sector no match for India," the headline
declares. The writers call the idea of China challenging India a "myth" and cite
a recent Forrester report saying that the threat from China is "diminishing
gradually with issues like language, attrition and intellectual property (IP)
protection continuing to haunt multinationals." For years, China boosters have
been saying that just give them time and they'll catch up to the Indians, but as
the Business Standard reports, in 2006, the Chinese IT services industry had a
paltry $7.7 billion in revenue, compared to India's $39.6 billion industry.
"China has the potential but India has the edge" the newspaper quotes Nasscom
Vice-President Ameet Nivsarkar boasting.
Read full article at Business Week